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Fitch reviews Sri Lanka’s HDFC Bank
Fitch Ratings said it placed Housing Development Finance Corp. Bank of Sri Lanka's (HDFC Bank) national long-term rating of BBB(lka) on rating watch negative.
The agency also placed the bank's senior secured and senior unsecured debentures, rated at BBB(lka), on negative watch.
Fitch said the watch reflects the risk that the state (B+/stable), as major shareholder, will not raise the bank's capital to meet the minimum 5 billion Sri Lankan rupee capital requirement by Jan. 1, 2018, in which case the agency will downgrade the rating to reflect the bank's weaker intrinsic strength.
The requirement has been in force since 2016 and Fitch said it would see a further delay as an indication that creditors may no longer be able to rely on sovereign support in a timely manner, notwithstanding HDFC Bank's unchanged linkages with the state.
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