Business
Sri Lanka financial institution ratings not affected by sovereign downgrade: Fitch Ratings
Broader economic conditions ‘ remain challenging’ amid expected contraction of economy Near-term ‘downside risks’ to credit profiles from spill-over effects of remainder of DDO ‘Uncertainties’ prevail over the completion of foreign-currency sovereign debt restructuring
Sri Lanka bank ratings are unaffected by the downgrade of Sri Lanka’s Long-Term Local-Currency Issuer Default Rating to ‘RD’ from ‘C’, says Fitch Ratings.On 14 September 2023, Fitch downgraded the sovereign’s Long-Term Local Currency Issuer Default Rating following the completion of an exchange of treasury bonds for longer-dated ones, which forms a part of the broader domestic debt optimisation program. The exchange of treasury bills held by the Central Bank of Sri Lanka (CBSL) has yet to be completed.
“We do not believe the completion of the first phase of the restructuring of the sovereign’s local-currency obligations is likely to trigger a loss of depositor confidence in the banking system, leading to a widespread default within the financial system, including for non-bank financial institutions (NBFIs). Therefore, we expect the banks to continue to service their local-currency obligations, given their better funding and liquidity profiles relative to that of the sovereign”, Fitch says.
Fitch continues to maintain the Rating Watch Negative (RWN) on Sri Lanka banks and NBFI’s ratings to reflect the potential for deterioration in their creditworthiness relative to other entities on the Sri Lankan national ratings scale.
This reflects near-term downside risks to credit profiles from spill-over effects from the remainder of the sovereign’s debt restructuring, while access to wholesale foreign-currency funding remains constrained. Further clarity around the sovereign debt restructuring process, particularly on the foreign-currency debt, that points to a reduction in stresses that have affected the banking sector in the past several quarters, would result in a resolution of the RWN with affirmation of the bank ratings.
While the local banks have been spared from the rupee debt restructuring, we believe that the broader economic conditions remain challenging as reflected in the expected contraction of the economy and high volatility of economic variables. This may still place downward pressure on individual credit profiles, particularly for NBFIs, which tend to be more exposed to cyclically sensitive segments. We believe that the re-assessment of the sovereign credit profile following the completion of the debt exchange with CBSL will influence the ratings of the banks and NBFIs, given the high interconnectedness.
While the domestic debt optimisation programme is nearing completion, uncertainties prevail over the completion of the foreign-currency sovereign debt restructuring. Any doubts over this could weigh on the banking sector with spillover effects to the NBFIs, given the banks’ exposure to defaulted foreign currency sovereign bonds, albeit they make up a small share of sector assets (3.6% of assets at end-1H23).
The Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka) proudly facilitated the first-ever Sri Lankan delegation’s participation at Drupa 2024, the world’s largest trade fair for the printing industry and technology. Held after an eight-year hiatus, Drupa 2024 was a landmark event, marking significant advancements and opportunities in the global printing industry.
AHK Sri Lanka played a pivotal role in organising and supporting the delegation, which comprised 17 members from the Sri Lanka Association for Printers (SLAP), representing eight companies from the commercial, newspaper, stationery printing, and packaging industries. This pioneering effort by AHK Sri Lanka not only showcased the diverse capabilities of Sri Lanka’s printing sector but also facilitated vital bilateral discussions with key stakeholders from the German printing industry.
Business
Unveiling Ayugiri: Browns Hotels & Resorts sets the stage for a new era in luxury Ayurveda Wellness
In a captivating reimagining of luxury wellness tourism, Browns Hotels & Resorts proudly unveiled the exquisite Ayugiri Ayurveda Wellness Resort Sigiriya. This momentous occasion, celebrated amidst a vibrant and serene grand opening on the 6th of June, heralds a new chapter in the Ayurveda wellness tourism landscape in Sri Lanka. Nestled amidst 54 acres of unspoiled natural splendour, Ayugiri features 22 exclusive suites and stands out as the only luxury Ayurveda wellness resort in the country offering plunge pools in every room, rendering it truly one-of-a-kind.
The grand opening of Ayugiri Ayurveda Wellness Resort was an enchanting event, where guests were captivated by the melodies of flutists and violinists resonating through Sigiriya’s lush landscapes. As traditional drummers and dancers infused the air with vibrant energy, Browns Hotels & Resorts’ CEO, Eksath Wijeratne, Kotaro Katsuki, Acting Ambassador for the Embassy of Japan and General Manager, Buwaneka Bandara, unveiled the resort’s new logo, marking a significant moment witnessed by distinguished guests from the French Embassy, Ayurveda and wellness enthusiasts along with officials from the Sigiriya area, LOLC Holdings and Browns Group.
“Our strategic expansion into wellness tourism with Ayugiri Ayurveda Wellness Resort Sigiriya symbolises a significant milestone for Browns Hotels & Resorts. Wellness tourism has consistently outperformed the overall tourism industry for over a decade, reflecting a growing global interest in travel that goes beyond leisure to offer rejuvenation and holistic well-being. By integrating the timeless wisdom of Ayurveda with modern luxury, we aim to set a new standard in luxury wellness tourism in Sri Lanka. Whether your goal is prevention, healing, or a deeper connection to inner harmony, Ayugiri offers a sanctuary for holistic well-being” stated Eksath Wijeratne.
Ayugiri encapsulates the essence of life, inspired by the lotus flower held by the graceful queens of the infamous Sigiriya frescoes. Just as the lotus emerges from the murky depths, untainted and serene,
Ayugiri invites guests on a journey of purity and rejuvenation, harmonised with a balance of mind, body and spirit, the essence of nature, echoes of culture and the wisdom of ancient Ayurvedic healing.
HNB General Insurance, one of Sri Lanka’s leading general insurance providers, has been honored as the Best General Bancassurance Provider in Sri Lanka 2024 by the prestigious Global Banking and Finance Review – UK.
The esteemed accolade underscores HNB General Insurance’s unwavering commitment to excellence and its outstanding performance in the field of bancassurance. Through dedication and hard work, the HNB General Insurance team has continuously endeavored to deliver innovative insurance solutions, cultivate strong relationships with banking partners, and provide unparalleled service to customers nationwide. This recognition is a testament to the team’s dedication and relentless pursuit of excellence in the bancassurance business.
“We are honored to receive this prestigious award, which reflects our team’s tireless efforts and dedication to delivering value-added insurance solutions and exceptional service through our bancassurance partnerships,” said Sithumina Jayasundara, CEO of HNB General Insurance. “This recognition reaffirms our position as a trusted insurance provider in Sri Lanka and motivates us to continue striving for excellence in serving our customers and communities.”
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