Sri Lanka's State Mortgage & Investment Bank (SMIB) was downgraded by Fitch Ratings Lanka to A (sri) from A+ (sri) on deteriorating asset quality and high exposure to interest rate risks, Fitch said Thursday. Sri Lanka's State Mortgage & Investment Bank (SMIB) was downgraded by Fitch Ratings Lanka to A (sri) from A+ (sri) on deteriorating asset quality and high exposure to interest rate risks, Fitch said Thursday. While an 'A (sri)' rating indicates a low expectation of credit risk, SMIB is still exposed to economic and market changes.
Fitch says the downgrade reflects SMIB's weak and deteriorating competitive position among peers, poor asset quality and relatively high exposure to interest rate risk.
"In addition, SMIB's liquidity is somewhat low aggravated by deposit concentrations amongst a few institutional depositors. However, SMIB's rating takes comfort from its state ownership, strong capital base and high profitability," the statement said.
More to follow…………
