Savings Rating

July 19, 2013 (LBO) - Sri Lanka's state-run National Savings Bank has been given a 'BB-' international rating by Fitch, ahead of a planned bond sale.





"NSB's ratings reflect Fitch's expectation of the government of Sri Lanka's high propensity but moderate ability to provide support to the bank in case of need," Fitch said.

"The state's high propensity to support NSB stems from the bank's full state ownership, systemic importance and its policy mandate of mobilising retail savings and investing them in government securities.

"The state's moderate ability to provide timely support to NSB at times of distress is reflected in the 'BB-'/Stable sovereign rating.

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The bank's exposure to the state and state owned enterprises were 71 percent of assets at end 2012.

"Such high exposure has supported NSB's local regulatory capital adequacy ratios although absolute capitalisation remains thin," the rating agency said.

Loans were accounted for 27 percent of NSB's assets at end-2012.

Its loan book was mad eup of pawning (gold-backed) advances (36 percent), housing loans (30 percent), and loans granted against deposits (12 percent).