Fitch said NDB's capitalisation could get diluted if equity grew slower than asset growth.
NDB's net non performing loan (NPL) to equity ratio (excluding discretionary provisions on performing loans) remained low at 2 percent at end-2010.
NDB's gross NPL ratio remained among the lowest in the sector and decreased to 1.9 percent at end-2010 (2.6 percent at end-2009), reflecting its cautious approach to lending.
The full Fitch statement is reproduced below.
Fitch Rates National Development Bank's Sub Debt 'AA-(lka)'; Affirms 'AA(lka)' National LT Rating
Fitch Ratings-Colombo/Singapore-27 May 2011: Fitch Ratings Lanka has assigned National Development Bank PLC's (NDB) proposed subordinated debentures of up to LKR1bn a National rating of