NDB IDRs given ‘stable outlook’ status by Fitch
View(s):Fitch Ratings has assigned Sri Lanka-based National Development Bank PLC (NDB) Long-term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of ‘B+’ with Stable Outlooks.
Fitch has also assigned NDB a ‘b+’ Viability Rating (VR), a Support Rating (SR) of ’4′, and Support Rating Floor (SRF) of ‘B’.
“NDB’s long term IDR reflects its standalone risk profile and satisfactory track record as a project financing institution with historically stronger capitalisation, asset quality and profitability compared with other major financial institutions in Sri Lanka. However, these strengths are counter-balanced by potential risks from NDB’s aggressive loan growth in recent years, and its expansion into other areas of commercial lending, as it seeks to become a full-service universal bank,” Fitch said in a statement on its rating.
In funding, Fitch believes that it will take several years before NDB’s share of deposits, and particularly low-cost current and savings accounts, become comparable to its well-established domestic peers. This is because of widespread competition in the industry where loan growth has far outstripped deposits in the past two to three years.
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