Sri Lanka's NDB ends S&P ratings
Mar 21, 2017 08:32 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Standard and Poor's said it was confirming the 'B' long-term rating of Sri Lanka's National Development Bank and withdrawing at the lender's request.
"In our view, the bank has an adequate risk position for its size and business scale. However, the bank's aggressive growth and small branch network have resulted in a below-average - albeit improved - funding profile, and its capital and earnings profile remains weak," the rating agency said.
The full statement is reproduced below:
National Development Bank PLC 'B' Rating Affirmed; Rating Then Withdrawn At The Bank's Request
SINGAPORE (S&P Global Ratings) March 20, 2017--S&P Global Ratings said today that it affirmed its 'B' long-term and 'B' short-term issuer credit ratings on National Development Bank PLC (NDB). We then withdrew all the ratings at the bank's request.
The affirmed rating at the time of withdrawal reflected our expectation that NDB would maintain its satisfactory business and revenue diversification over the next 12 months. In our view, the bank has an adequate risk position for its size and business scale. However, the bank's aggressive growth and small branch network have resulted in a below-average--albeit improved--funding profile, and its capital and earnings profile remains weak.
The outlook on the long-term issuer credit rating was stable at the time of the withdrawal. The stable outlook reflected our view that NDB is relatively insulated over the next 12 months compared to peers from potential heightening of economic risks facing all financial institutions operating in Sri Lanka.
Although we expected no rating movement in the next one year, rating upside would have outweighed downside risks over the longer term, given that the bank plans to raise capital.