SCB rating stable despite fine

Fitch Ratings Lanka has said that Standard Chartered Bank, Sri Lanka Branch’s (SCBSL) ‘AAA(lka)’ National Long-term rating will not be affected by the Rs 27 billion fine imposed by the Exchange Control Department of the Central Bank of Sri Lanka on March 16, 2011 for alleged violation of Exchange Control laws.

The outlook on the rating is stable.

As SCBSL is a branch and part of the same legal entity as Standard Chartered Bank (SCB;’AA-’ /Stable) in London, there is no ‘ring fencing’ of the liabilities of the local branch.

Therefore, SCBSL’s rating reflects the financial strength of SCB, which is rated higher than Sri Lanka’s Sovereign Foreign Currency Issuer Default Rating of ‘B+’ with a positive outlook, Fitch said.