Fitch Ratings has affirmed the support-driven National Long-Term Ratings of four Sri Lankan bank subsidiary finance and leasing companies (FLCs). The Outlooks are Stable. The four FLCs are:
- CBC Finance LTD (CBCF) at 'BBB+(lka)';
- HNB Finance PLC (HNBF) at 'BBB+(lka)';
- Siyapatha Finance PLC at 'BBB+(lka)'; and
- UB Finance PLC (UBF) at 'BB(lka)'.
At the same time, Fitch has removed the Rating Watch Negative (RWN) on the four FLCs' National Long-Term Ratings as well as HNBF's and Siyapatha's subordinated debt ratings.
A full list of rating actions is below.
KEY RATING DRIVERS
Parents Drive RWN Resolution: The rating action on the four FLCs stems from similar action on their respective parent banks' ratings. On 5 October 2023, Fitch affirmed the National Long-Term Ratings of Commercial Bank of Ceylon PLC, Hatton National Bank PLC and Sampath Bank PLC at 'A(lka)' and Union Bank of Colombo PLC at 'BBB-(lka)', with Stable Outlooks, and removed the banks from RWN.
Shareholder Support Underpins Ratings: The National Long-Term Ratings of CBCF, HNBF, Siyapatha and UBF are driven by our view that their respective parent banks would provide extraordinary support to their finance subsidiaries, if required. The parents' ability to extend support to these FLCs is reflected in their credit profile, which is underpinned by their standalone strength. The key rating drivers are those outlined in our previous published RACs for these four entities as follows:
- CBCF: Fitch Maintains CBC Finance's National Long-Term Rating of 'BBB+(lka)' on Watch Negative, dated 10 April 2023;
- HNBF: Fitch Maintains HNB Finance's National Rating of 'BBB+(lka)' on Watch Negative, dated 10 April 2023;
- Siyapatha: Fitch Maintains Siyapatha Finance's National Rating of 'BBB+(lka)' on Watch Negative, dated 10 April 2023; and
- UBF: Fitch Assigns UB Finance First-Time 'BB(lka)' Rating; on RWN, dated 18 May 2023.