COLOMBO – Fitch Ratings has revised the National Long-Term Ratings of Sri Lankan financial institutions following the recalibration of the agency’s Sri Lankan national rating scale. The recalibration is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of the sovereign rating to ‘CCC’ from ‘B-‘/Negative on November 27, 2020.
Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC’ or below.
The National Ratings of the Sri Lankan financial institutions consider their creditworthiness relative to other issuers in the country. The recalibration of the Sri Lankan National Rating scale has resulted in the revision of the National Long-Term Ratings of the following Sri Lankan financial institutions:
Commercial Bank of Ceylon PLC (CB) to ‘AA-(lka)’/Stable from ‘AA+(lka)’/Negative
Hatton National Bank PLC (HNB) to ‘AA-(lka)’/Stable from ‘AA+(lka)’/Negative
Cargills Bank Limited to ‘AA-(lka)’/Stable from ‘A+(lka)’/Stable
Non-Bank Financial Institutions
CBC Finance LTD to ‘A(lka)’/Stable from ‘AA-(lka)’/Negative
HNB Finance PLC to ‘A(lka)’/Stable from ‘AA-(lka)’/Negative
Richard Pieris Finance Limited to ‘AA-(lka)’/Stable from ‘A-(lka)’/Stable
Singer Finance (Lanka) PLC to ‘A+(lka)’/Stable from ‘BBB(lka)’/Stable
Abans Finance PLC to ‘A(lka)’/Rating Watch Evolving (RWE) from ‘BB+(lka)’/RWE
AMW Capital Leasing And Finance PLC to ‘AA-(lka)’/Negative from ‘BBB-(lka)’/Negative
At the same time, Fitch has downgraded the National Ratings of Bank of Ceylon (BOC) and People’s Bank (Sri Lanka) (PB) to ‘AA-(lka)’ from ‘AA+(lka)’. The Outlook is Stable.
The revision of the National Ratings of CB and HNB and the revision of the Outlooks to Stable from Negative are driven by the recalibration of the national rating scale. The recalibration also reflects the differing levels of constraint placed on Sri Lankan issuers due to the sovereign’s credit profile. The revision of the National Ratings of CBC Finance and HNB Finance stems from the recalibration of the National Ratings of their parents, CB and HNB. The Stable Outlooks on CBC Finance and HNB Finance mirror the Stable Outlook on CB and HNB.
The revision of the National Ratings and the Outlooks of Cargillls Bank, Richard Pieris Finance, Singer Finance (Lanka), Abans Finance and AMW Capital Leasing and Finance stem from the change in the relativity of their corporate parents due to the recalibration of the corporate parents’ National Ratings.
Fitch has taken corresponding rating action on the financial institutions’ national scale debt ratings, where assigned. The senior debt ratings are at the same level as the National Long-Term Ratings. National Ratings assigned to Tier 2 issues are two notches below the National Rating anchor ratings.