Ploughing On

September 01, 2007 (LBO) – Fitch Ratings Lanka has confirmed the AAA (lka) rating of HSBC’s Sri Lanka branch with a ‘stable’ outlook, the rating agency said.

HSBCSL is the largest foreign bank in Sri Lanka in term of assets and operates 14 branches in Sri Lanka, primarily in the Colombo district.

HSBC Sri Lanka (HSBCSL) is part of the The Hongkong & Shanghai Banking Corporation Limited (HSBC), which is a fully-owned subsidiary of HSBC Holdings plc and the local branch’s rating is linked to the AA ‘positive’ foreign currency Issuer Default Rating of HSBC and its financial strength, Fitch said.

In 2006 HSBC’s loan growth was strong at 33.4 percent, which was above the growth rate of 28.3 percent recorded by the banking industry.

The bank’s loan portfolio was evenly split between corporate and retail loans, which respectively accounted for 51.5 percent and 48.5 percent of its portfolio at financial year end 2006.

Fitch said its asset quality, although still very strong by Sri Lankan norms, is showing signs of weakening with the gross non-performing loan (NPL)/loans ratio of 2.2 percent in the first half of 2007 up from 0.97 percent at the en