Fitch affirms NSB at ‘AAA(lka)’
Fitch Ratings Lanka has affirmed National Savings Bank’s (NSB)
National Long-Term rating at ‘AAA(lka)’. The outlook is stable. NSB’s
rating reflects its full state ownership and importance to the
government in terms of its stipulated policy role under the NSB Act No.
30 of 1971 of mobilising retail savings and investing in government
securities (GS).
The bank is bound by the Act to invest a minimum of 60% of its
deposits in government issued and guaranteed securities. NSB’s deposits
have an explicit guarantee from the Government of Sri Lanka.
Its policy role and full state ownership further underpin the rating
by way of potential government support in case of need. A substantial
change in NSB’s policy role indicating its reduced significance to the
government could put downward pressure on NSB’s rating.
NSB’s exposure to the state (excluding GS under resale agreements)
accounted for 68% of its assets at end-2010, comprising GS held to
maturity (89%), GS held for trading (4.5%), rupee loans (4.3%) and other
loans (2.1%). |