Sept 23, 2011 (LBO) – Sri Lanka’s Seylan Bank was upgraded by one notch to ‘A-(lka) from ‘BBB+(lka) with a stable outlook on state support, improved credit profile and capital injections, Fitch, a rating agency said. By June 2011, the state had a 30 percent effective control of the lender’s voting stock.

By the first half of 2011 bad loans were down by a third from its peak and was 18.29 percent, Fitch said. It was higher than 3.53 percent average among Fitch rated banks, but were mostly due to past loans.

The full statement is reproduce below.

Fitch Ratings-Colombo/Singapore-22 September 2011: Fitch Ratings has upgraded Seylan Bank
PLC’s National Long-Term rating to ‘A-(lka)’ from ‘BBB+(lka)’. The Outlook is Stable. A full list of rating actions is provided at the end of this commentary.

The upgrade is driven by the Government of Sri Lanka’s improved ability to provide support to
Seylan if required, as evidenced by Fitch’s upgrade of the Sri Lanka Sovereign rating to ‘BB-‘ on
18 July 2011. The potential support is based on Seylan’s status as one of six systemically
important domestic commercial banks as identified by the country’s regulator. State support
has been forthcoming to Seylan since