S&P Global Ratings lowered National Development Bank Plc's long-term issuer credit rating to B from B+ to reflect the bank's weakened capital position.

The rating agency also affirmed the bank's short-term issuer credit rating at B. The bank's stand-alone credit profile was lowered to "b" from "b+."

The long-term outlook is stable.

The downgrade reflects S&P's view that the bank's weakened capital position is unlikely to improve over the next 12 months. The Sri Lankan lender is unlikely to raise capital in the next six months given recent changes in top management.

S&P could upgrade the bank to B+ if it believes that National Development Bank's funding profile has improved or if the bank can maintain its risk adjusted capital ratio above 5%. However, S&P considers both scenarios unlikely in the next year.

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