Fitch rates Sampath Bank bonds A+(lka)

Fitch Ratings said it assigned an A+(lka) national long-term rating to Sampath Bank plc's proposed subordinated debenture issue of up to 3 billion Sri Lankan rupees and affirmed the bank's AA-(lka) national long-term rating, D/E individual rating, 5 support rating and the A+(lka) national long-term rating on its outstanding subordinated debentures.

The outlook is stable.

The agency said the affirmations reflect Sampath Bank's sound liquidity and capital adequacy and good franchise among local commercial banks.

Asset quality continued to decline over the five months ending in May, which is in line with the current sector trend and was driven by the preceding highly inflationary and high interest rate environment, Fitch said. However, the agency expects the bank to broadly manage the sector-wide deterioration in asset quality over the short- to medium-term, given its redoubled efforts in this respect coupled with expectations of easing inflation and interest rates, and maintain healthy profitability.

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