Tag: Fitch Ratings

Sri Lanka’s Banks are unlikly to return to Pre-covid proftiability levels in 2021
Banking and Insurance, Business, Finance and Leasing, Investments

Sri Lanka’s Banks are unlikly to return to Pre-covid proftiability levels in 2021

Sri Lanka's Banks are unlikly to return to Pre-covid proftiability levels next year, Fitch Ratings said in a special report. "We expect this trend to continue in to 2021, albeit at a slower pace. Deteriorating asset quality and the associated higher credit costs are expected to keep banks' profitability lower in 2021 than pre-2019 levels, despite improvement from 2020 profitability," the Rating Agency said. It expects that sluggish economic activity, external and domestic vulnerabilities, muted private credit growth and the sovereign's weakened credit profile to pose significant downside risks to the operating environment for Sri Lankan banks. The rating Agency lowered its assessment of the operating environment score for Sri Lankan banks to 'ccc' with negative outlook from 'b-' ...
Sri Lanka’s banks to show reluctance to absorb their subsidiary Finance Firms – Fitch Ratings
Banking and Insurance, Business, Economy, Finance and Leasing, International Business

Sri Lanka’s banks to show reluctance to absorb their subsidiary Finance Firms – Fitch Ratings

Sri Lanka's banks would be reluctant to absorb their financeĀ and leasing companies (FLC) due to the significant difference between their risk profiles and underwriting practices which could lead to elevated challenges in achieving effective management, According to Fitch Ratings. The government's budget speech, presented on 17 November 2020, reiterated the importance of consolidation in the FLC sector, which has been on the cards since 2014 when the Central Bank (CB) announced its 'Master Plan for the Consolidation of the Financial Sector'. It led to several banks acquiring FLC subsidiaries in 2014 and 2015, including the acquisition of HNB Finance (then Prime Grameen Micro Finance Limited) by Hatton National Bank and Serendib Finance (then Indra Finance Limited) by Commercial Bank of ...