Foreign Ratings

Dec 29, 2008 (LBO) – The ‘AAA(lka)’ ratings of Sri Lanka branches of Citibank and Standard Chartered are not affected following a court order that halted payments on oil derivatives with a state-run oil firm, Fitch Ratings said. The findings are expected to be presented at court hearings in February 2009.

“As per regulatory requirements, both branches were signatories to the transactions and have covered their positions through back to back transactions with their respective head offices,” Fitch said.

“The local branches are however exposed to counterparty settlement risk.”

Fitch said in its view timely support would be made available to Citi and Standard Chartered Sri Lanka branches from head offices to meet depositor and credit liabilities if such support was needed.

Both branches were part of the same legal entities as Citibank N.A. and Standard Chartered Bank.

“This support is, however, dependent on any regulatory restrictions or delays in remitting money into Sri Lanka, none of which is envisaged at the moment,” Fitch said.

The Outlook on CITISL and SCBSL’s National ratings is Stable.

“Given that CITISL and SCBSL are both branches and part of the same legal entities as Citibank N.A. and