Fitch Places 12 Sri Lankan NBFIs on Rating Watch Negative

Release time:2022-04-27 Publisher:South Asia Development

Fitch Ratings has placed the National Long-Term Ratings of 12 Sri Lankan non-bank financial institutions (NBFIs) on Rating Watch Negative.

The RWN reflects heightened downside risks to the non-bank financial institutions’ credit profiles amid increased economic and financial-market volatility in Sri Lanka.

This risk is increased by the deteriorating sovereign credit profile with the Long-Term Foreign-Currency Issuer Default Rating C, the Long-Term Local-Currency Rating CCC and also the ensuing risks to the stability of the financial system.

Fitch Ratings said the non-bank financial institutions’ credit profiles are being pressured by Sri Lanka’s challenging operating environment, with significant near- to medium-term downside risk presented by the weakening sovereign credit profile.

It said this could further impair the economy and weigh on financial market performance, raising downside risks to institutions’ asset quality and earnings.