ICRA Lanka Limited has assigned a rating of [SL]AA(hyb) with Stable outlook for the proposed LKR 5,000 Mn Basel III Compliant, Unlisted, Rated, Unsecured, Subordinated, Perpetual, Additional Tier I Capital Bond Programme of National Savings Bank (NSB or the Bank).
The letters ‘hyb’ in parenthesis suffixed to a rating symbol stand for ‘hybrid’, indicating that the rated instrument is a hybrid subordinated instrument with equity-like loss-absorption features, which may translate into higher levels of rating transition and loss severity vis-à-vis conventional debt instruments.
ICRA Lanka has an issuer rating outstanding of [SL]AAA (pronounced SL triple A) with Stable outlook for the Bank. ICRA Lanka also has an issue rating of [SL]AAA (pronounced SL triple A) with Stable outlook outstanding for the LKR 20,000 Mn senior, unlisted, unsecured, redeemable debenture programme and an issue rating of [SL]AA+ (pronounced SL double A plus) with Stable outlook for the LKR 6,000 Mn subordinated, unsecured, redeemable debenture programme of NSB.
NSB’s asset quality remains better as compared to Licensed Specialised Bank (LSB) average with a GNPA ratio of 2.34% as on Jun-20 lower than the LSB segment’s GNPA ratio of 7.08% and system average of 5.43% for the same period. NSB’s BASEL III complied capital adequacy ratio (CAR) stood at 13.25% (Common Equity Tier I and Tier-I capital ratios at 10.96%) as compared to regulatory requirement of 12.00% (Common Equity Tier I ratio at 4.00% and Tier-I capital ratio at 8.00%) as of Jun-20.
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