Sampath Bank at ‘A(lka)’;

Fitch Ratings has affirmed Sri Lanka-based Sampath Bank PLC’s (Sampath) National Long-Term Rating at ‘A(lka)’. The Outlook is Stable. Fitch also affirmed Sampath’s outstanding Sri Lankan rupee-denominated subordinated debt at ‘BBB+(lka)’.

Intrinsic Profile Drives Rating: Sampath’s National Long-Term Rating reflects its own financial strength, which is highly influenced by its exposure to the sovereign’s weak credit profile (Long-Term Foreign-Currency Issuer Default Rating (IDR): RD; Long- Term Local-Currency IDR: CCC-) and the ongoing sovereign debt restructuring, which had been putting pressure on Sampath’s credit profile.

The rating also reflects Sampath’s modest domestic franchise as Sri Lanka’s fifth-largest commercial bank.

Fitch says: “Sri Lankan banks’ operating environment (OE) continues to show signs of stabilisation, as evident in sustained improvements in reported headline macroeconomic indicators, supporting the recovery in banks’ operational flexibility.”

Further improvement to the bank’s OE remains contingent on successful execution of the sovereign’s external debt-restructuring exercise alongside the restoration of the sovereign’s creditworthiness, given the strong link between sovereign financial health and banks’ operating conditions.

National Development Bank at A-(lka)

Fitch Ratings has affirmed Sri Lanka-based National Development Bank PLC (NDB) National Long-Term Rating at ‘A-(lka)’. The Outlook is Stable.

At the same time, Fitch has affirmed NDB’s Sri Lankan rupee- denominated proposed and outstanding subordinated debt at ‘BBB(EXP)(lka)’ and ‘BBB(lka)’, respectively.

NDB’s National Long-Term Rating reflects its own financial strength, which is highly influenced by its exposure to the sovereign’s weak credit profile (Long-Term Foreign-Currency Issuer Default Rating (IDR): RD; Long- Term Local-Currency IDR: CCC-) and the ongoing sovereign debt restructuring, which had been putting pressure on NDB’s credit profile. The rating also reflects NDB’s modest domestic franchise as Sri Lanka’s sixth-largest commercial bank.

Seylan Bank at A-(lka)

Fitch Ratings has affirmed Sri Lanka-based Seylan Bank PLC’s (Seylan) National Long-Term Rating at ‘A-(lka)’. The Outlook is Stable. Fitch also affirmed Seylan’s Sri Lankan rupee-denominated outstanding subordinated debt at ‘BBB(lka)’.

Seylan’s National Long-Term Rating reflects its own financial strength, which is influenced by the bank’s exposure to the sovereign’s weak credit profile (Long-Term Foreign-Currency Issuer Default Rating (IDR): RD; Long- Term Local-Currency IDR: CCC-) and the ongoing sovereign debt restructuring, which had been putting pressure on Seylan’s credit profile. The rating also reflects Seylan’s modest domestic franchise as Sri Lanka’s seventh-largest commercial bank.

DFCC Bank at A-(lka)

Fitch Ratings has affirmed Sri Lanka-based DFCC Bank PLC’s (DFCC) National Long-Term Rating at ‘A-(lka)’. The Outlook is Stable. Fitch has also affirmed DFCC’s senior and subordinated debt ratings of ‘A-(lka)’ and ‘BBB(lka)’, respectively.

Intrinsic Profile Drives Rating: DFCC’s National Long-Term Rating reflects its own financial strength, which is highly influenced by exposure to the sovereign’s weak credit profile (Long-Term Foreign-Currency Issuer Default Rating (IDR): RD; Long-Term Local-Currency IDR: CCC-) and the ongoing sovereign debt restructuring, which had been putting pressure on the bank’s credit profile. The rating also reflects DFCC’s modest domestic franchise as Sri Lanka’s eighth-largest commercial bank.

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