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S&P revises outlook on Sri Lanka's DFCC Bank to stable

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S&P revises outlook on Sri Lanka's DFCC Bank to stable

S&P Global Ratings revised its outlook on Sri Lanka-based DFCC Bank Plc to stable from negative, and affirmed the bank's long- and short-term issuer credit ratings at B.

At the same time, the rating agency on Dec. 12 removed the under criteria observation designation it had previously assigned to the bank's long-term ratings. The bank's stand-alone credit profile stands at "b."

In addition, S&P lowered the bank's capital and earnings assessment to weak from moderate, and its risk position to adequate from moderate.

The outlook revision reflects S&P's view that the bank will navigate operating conditions in the country and retain its financial profile over the next 12 to 18 months.

DFCC Bank could see a rating downgrade if its asset quality falls substantially. Conversely, the ratings could be upgraded if the systemic risks that the country's lenders are facing subside while DFCC Bank increases its capital to maintain its prediversification risk-adjusted capital ratio above 5%.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.