Outlook Cut

Nov 02, 2013 (LBO) – Fitch Ratings has lowered the outlook on Sanasa Development Bank’s ‘BB+(lka)’ rating from ‘positive’ to ‘stable’. “The revision of the Outlook on SDB reflects an unexpected deterioration in its credit profile,” Fitch Ratings said.

“SDB has failed to sustain the improvement in its capitalisation and to maintain its asset quality relative to its higher-rated peers.”

Fitch said SDB capitalisation was moderate, but it had high net interest margins due to higher-risk microfinance business, which the bank managed “reasonably well.”

The full statement is reproduced below:-

Fitch Revises Sanasa Development Bank’s Outlook to Stable; Affirms at ‘BB+(lka)’
31 Oct 2013 8:22 AM (EDT) Fitch Ratings-Colombo/Singapore-31 October 2013: Fitch Ratings Lanka has revised Sanasa Development Bank’s (SDB) rating Outlook to Stable from Positive and affirmed the bank’s National Long-Term Rating at ‘BB+(lka)’.

KEY RATING DRIVERS

The revision of the Outlook on SDB reflects an unexpected deterioration in its credit profile. SDB has failed to sustain the improvement in its capitalisation and to main