Fitch Ratings Lanka this week affirmed National Savings Bank's (NSB) National Long-term rating at 'AAA(lka)', stating in a press release that the rating reflects NSB's state ownership, systemic importance, the low risk nature of most of its asset base and explicit guarantee from the government of Sri Lanka on its deposits. The Outlook is Stable.
Fitch stated that NSB is bound by the NSB Act No 30 of 1971 to invest a minimum of 60% of its deposits in government issued/guaranteed securities. At FYE08, exposure to these securities amounted to 75% of deposits. The total government exposure (tradable securities and direct loans to the state and state owned entities) accounted for 67% of assets at FYE08.
Fitch stated that NSB's loans grew by 11% in H109, compared to 7% for the year 2008, but accounted for just 23% of assets at FYE08, but up from 19% of assets at 2006. Housing loans, pawn-broking loans (gold-backed loans), loans backed by fixed deposits and loans to financial institutions accounted for 39%, 15%, 16% and 17%, respectively, of loans at FYE08; the balance is from the personal finance segment. |
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