Debt Rating

Oct 31, 2013 (LBO) – Fitch Ratings said a 3.0 billion rupees subordinated debt offer of Sri Lanka’s Nations Trust Bank has been given an expected ‘A-(lka)’ rating. The rating agency also confirmed a ‘A(lka)’ long term rating of the bank, which is a notch higher, with a stable outlook.’

“The ratings reflect NTB’s broadly stable credit profile, its evolving franchise and on-going process improvements, which are counterbalanced by its increasing exposure to segments that are more susceptible to economic cycles,” Fitch said.

“They also capture Fitch’s view that the bank’s medium-term strategic plan can be successfully implemented and that it will help the bank to improve its franchise despite the weak and volatile macroeconomic environment.

“Aggressive implementation of the strategic plan may, however, increase the bank’s risk profile.”

NTB’s loans grew 5 percent in the first six months, from 20 percent in 2012, amid a slowdown in the overall sector growth.

NTB’s Gross non-performing loan (NPL) ratio (including suspended interest) had increased to 5.1 percent by the first half from 3.9 percent driven mainly by leasing.

Its regulatory NPL