Sept 26, 2008 (LBO) – Fitch Ratings Lanka said it is maintaining the Rating Watch on the National Long-term ratings of six Sri Lankan state-owned Regional Development Banks (RDBs) which are being merged.
The required amendments to the RDB Act to enable the merger of the six banks have been approved by the Cabinet sub-committee, and are expected to be submitted to Parliament in late 2008, Fitch said in a statement.
“The merger will create an entity with nationwide presence and exposure, as well as mitigate the regional specific risks faced by individual RDBs, whilst consolidating and centralising administrative functions,” it said.
“Although challenges exist, such as the rationalisation of products and services, Fitch believes that the merger would help make the combined entity a more sustainable and competitive enterprise.”
The banks are Rajarata Development Bank, ‘BBB+(lka)’, Rating Watch Evolving (RWE); Ruhuna Development Bank, ‘BBB+(lka)’, RWE; Wayamba Development Bank, ‘BBB+(lka)’, RWE; Kandurata Development Bank, ‘BBB(lka)’, RWE; Uva Development Bank, ‘BBB(lka)’, RW