Hats Off

SL A+ long term rating denotes a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. rn

rnldblquote This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings,
dblquote says Fitch in a statement on Friday. rn

rnSMIBs rating reflects its state ownership, relatively low inherent risk in the housing mortgage business, strong capital base and the healthy profitability.rn

rnThe rating also reflects the future challenges facing SMIBs business model and the relatively high interest rate and liquidity risk of the bank due to the concentrated nature of its funding base. rn

rnSMIBs non-performing loans are also relatively high, partly due to the customer portfolio of the bank, with high exposure to the self employed segment. rn

rnPresently, around 30 percent of SMIBs borrowers are engaged in primary industries such as farming, which are subject to seasonal income