ICRA Lanka Limited has reaffirmed the issuer rating of Merchant Bank of Sri Lanka & Finance PLC at [SL]BBB+ (Pronounced as S L Triple B plus) while revising the outlook to Stable from Negative.
ICRA Lanka has also reaffirmed the issue rating of Rs. 2,000 million Subordinated Unsecured Redeemable Debenture Programme at [SL]BBB (Pronounced as S L Triple B) while revising the outlook to stable from negative.
The outlook revision factors in the improvement of the capital profile, improved profitability and improvement in the solvency (Net NPA/Networth) of the Company. MBSL raised Rs. 2,152 million through a rights issue on September 16, 2021.
Subsequently, on October 18, 2021, the Central Bank of Sri Lanka (“CBSL”) removed the lending cap of Rs. 35 billion (imposed on March 2019) and deposit cap of Rs. 23 billion (imposed on May 2019).
ICRA Lanka also noted the improvement in the profitability in CY2021 amid improvement in the core margins of the Company. MBSL reported a Profit After Tax (PAT) of Rs. 140 million for H1CY2021 vis-à-vis loss of Rs. 460 million for H1CY2020.
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