Fitch confirms Standard Chartered Sri Lanka Branch at ‘AAA(lka)’

ECONOMYNEXT – Fitch Ratings Lanka has confirmed Standard Chartered Bank, Sri Lanka Branch’s (SCBSL) National Long-Term Rating at ‘AAA(lka)’ with a stable outlook.

The branch is the second-largest among the Fitch-rated foreign bank branches in Sri Lanka, with an asset base of 127 billion rupees at end-1H15, accounting for 1.7 percent of total banking sector assets.

The confirmation of SCBSL’s rating follows the downgrade of Standard Chartered Bank’s (SCB) Issuer Default Rating to ‘A+’ with Negative Outlook, from ‘AA-‘ with Negative Outlook on 5 November 2015.

A statement said SCBSL’s rating is at the highest end of the National Rating scale and reflects the credit profile and financial strength of the branch relative to domestic peers.

SCB’s rating is higher than Sri Lanka’s Long-Term Local- and Foreign-Currency Issuer Default Ratings of ‘BB-‘, and as a result, SCBSL’s rating is consistent with ‘AAA(lka)’.

The rating is linked to SCB’s IDR because of SCBSL’s legal status as a branch of SCB, making it a part of the same legal entity.

Fitch said it believes that support from SCB would be forthcoming if required, subject to any regulatory constraints on remitting money into Sri Lanka.

Fitch said a downgrade of SCBSL’s national rating could result if SCB’s IDRs were to fall below those of Sri Lanka.

Any changes to Fitch’s expectations of parental support could also be negative for the rating. (Colombo/November 13 2015)
 

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