Outlook Revision

(L-R) : Jeevith Senaratne, Director Operations - Star Garment Group; Shanaka Rabel, Group Chief Digital and Transformation Officer - Stretchline Holdings Ltd; Janaka Botejue, Chairman – Bernard Botejue Industries; Sanjeewa Kodikara, Chief Information Officer- Hirdaramani Group

Aug 23, 2012 (LBO) – Fitch Ratings has confirmed an ‘AA(lka)’ rating of Sri Lanka’s Sampath Bank but cut its outlook to stable from positive, saying its core capital build-up was weaker than expected though still above the regulatory minimum. “The Outlook revision reflects the weaker-than-expected build-up of SB’s core capitalisation relative to higher rated peers and the need to achieve a sustainable improvement in the bank’s core profitability by improving its funding structure and operating scale,” the rating agency said.

“The ratings reflect SB’s strong asset quality supported by structural improvements initiated in 2009, its high loan loss reserves in a local context, and its growing franchise in terms of its market share of banking sector assets, loans and deposits.”

The full statement is reproduced below:

Fitch Revises Sampath Bank’s Outlook to Stable; Affirms ‘AA-(lka)’

Fitch Ratings-Colombo/Mumbai/Singapore-23 August 2012: Fitch Ratings Lanka has revised Sampath Bank PLC’s (SB) Outlook to Stable from Positive. Its National Long-Term rating has been affirmed at ‘AA-(lka)’. Fitch has also affirmed SB’s subordinated debentures at ‘A+(lka)’.

The Outlook revision reflects the weaker-than-expected build-up

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