State support for Seylan Bank PLC has kept the bank’s ratings with Fitch stable as the ratings agency affirmed its National Long-term rating at 'BBB+(lka)' while also affirming the ‘BBB(lka)’ rating on Seylan’s outstanding subordinated debentures.
The state owns 28% of Seylan's voting equity at present, consequent to an equity infusion of over Rs.1.1 billion in October 2009 (37% of a total new-share issue of Rs.3 billion). Furthermore, Fitch noted that the state replaced the bank's board with state appointees to restore depositor confidence and stem the bank's failure in December 2008.
The rating also factors in the considerable re-structuring measures taken by the bank's present board of directors, in terms of re-organizing Seylan's risk management processes and controls. |
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