NDB’s financial outlook revised upwards to ‘Stable’ by Fitch
View(s):National Development Bank PLC’s credit rating was affirmed at A+ (lka) by Fitch Ratings Lanka in its latest rating actions on Sri Lankan banking institutions. The ‘Outlook’ for the bank was revised to ‘Stable’ from previous ‘Negative’, reflecting Fitch’s expectation of reduced pressure on the bank’s capitalisation relative to its risk appetite.
NDB said in a media release that the rating announcement comes at a time when the country’s credit rating was revised downwards to ‘B-/Negative following the severe economic downturn in the aftermath of the COVID-19 pandemic.
The bank said its rapid response with the onset of the pandemic to enable the smooth functioning of the financial services sector of the country and enable customers to carry out their day to day financial requirements set a precedent in this sector.
The bank introduced mobile ATM’s and Banking on Wheels taking the bank to the customers whilst adding to its digital presence with the introduction of its Online Banking portal for added customer convenience during the lock down period.
The bank’s balance sheet, well diversified into different sectors with an equitable exposure in multiple segments ranging from retail, SME, corporate and project financing has proven its strength at times of acute stresses. Almost a quarter of the Balance Sheet is in long term project financing facilities which reflects the bank’s expertise in this segment, an attribute which benefits the bank at times of turbulences, given the long tenures of these loans, the release said.
“The quality of the bank’s loan book, which is well preserved over the long term, is yet another strength of the bank. The bank’s non-performing loan ratio was 4.78 per cent as of Q1 2020 and is below the industry average levels. The quality of the bank’s loan book will ensure that potential losses arising from the impact of the COVID-19 pandemic is well managed and measures deployed such as rescheduling of loans will be
indeed effective,” it said.