Business Times

Fitch revises NDB outlook to ‘Negative’

Fitch Ratings has revised National Development Bank PLC's (NDB) Outlook to ‘Negative from Stable’.
Its National Long-Term rating has been affirmed at 'AA(lka)'. Fitch has also affirmed NDB's subordinated debentures at 'AA-(lka)', the agency said in a statement. “The Outlook revision reflects NDB's increased risk profile in terms of its decreasing capitalisation alongside aggressive loan expansion and potential pressure on its asset quality and profitability through portfolio seasoning and higher credit costs,” it said.

Thus, Fitch said, a sustained deterioration of NDB's profile in terms of these credit metrics could result in a rating downgrade, while its ability to stem such deterioration could revise the Outlook back to Stable. Notwithstanding the deterioration, the ratings continue to reflect NDB's strong credit metrics in terms of its capitalisation, asset quality, and profitability. NDB's strong loan expansion of 41.8% in 2011 (28.8% in 2010) led to a decline in its equity/assets to 12.7% from 14.7%. Fitch expects lending momentum to remain high alongside its expanding operations, as part of the repositioning of the bank to target the mass market.

NDB's gross non-performing loan (NPL) ratio remained among the lowest in the sector at 1.3% during the first quarter of 2012. However, Fitch believes that the bank's high loan growth and the shift in its loan book composition towards mid-sized corporates and SMEs among others could test its credit risk management.

Top to the page  |  E-mail  |  views[1]
SocialTwist Tell-a-Friend
Other Business Times Articles
Chaos at Sri Lanka Tourism
Raffles chain coming to Sri Lanka
Second hand vehicles call at H'tota port
President praises action of former NSB Working Director
CB says still probing NSB-TFC deal
BT to facilitate formation of minority shareholders body
No ordinary hotel visit!
Comment - Hurrah for justice and SEC courage
Political spin of the economic growth in the North
“End of the road for the apparel industry?”
Dialog brings tuition to your computer screen in the living room
Intelligent Investor column takes a break
NSB-TFC share deal cannot be justified whatsoever, says former NSB chairman
Fitch affirms Sri Lanka Insurance at 'AA(lka)'/Stable
Conglomerate Hayleys reports best year ever in group history
Firstsource Dialog Solutions completes one year of BPO operations
Internet pioneer Gigi Wang of MIT/Stanford Venture Lab to speak in Sri Lanka
Commercial Credit posts massive Rs. 1.2 bln pre-tax profit
LOLC Group bullish on the Northeast- opens 3 new branches there
Adding a spark to the ‘Atlas’ colour range
Chamber discussion on bilateral trade between Sri Lanka and the EU
Kandana students win big-time in Intel competition in the US
Nestlé Lanka revenues up but 2012 a ‘challenging’ year
Fitch revises NDB outlook to ‘Negative’
Leisure sector largest contributor to JKH growth
Fraud on the rise - KPMG study shows
WSO2 accelerates business in Sri Lanka
Even the Southwest monsoon will bring natural disasters
Unique opportunity for young Lankan visionaries on IT creations
Commercial Bank reports robust deposit growth in 1Q 2012
Expolanka Freight secures carbon neutral certification
Sri Lanka's first satellite company launched
Small shareholders association idea draws huge support in BT poll
First pesticide-free termite protection system in Sri Lanka from Hayleys
Dandugam Oya float plane aerodrome opens
NSB's flawed stock market deal prompts the government to tighten screws
ST Business Club meets on Wednesday
Brandix helps Colombo University in 4th campus initiative


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 1996 - 2012 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved | Site best viewed in IE ver 8.0 @ 1024 x 768 resolution