Fitch Ratings has maintained Housing Development Finance Corporation Bank of Sri Lanka’s (HDFC Bank) National Long-Term Rating of ‘BBB-(lka)’ on Rating Watch Negative (RWN). The agency has also maintained the RWN on the ‘BBB-(lka)’ rating of HDFC Bank’s senior secured and senior unsecured debentures.
The RWN, first placed in August 2017, has been maintained pending a capital infusion from the Sri Lankan State (B+/Stable) to help HDFC Bank meet the Rs. 5 billion minimum regulatory capital requirement. We expect the State, the bank’s major shareholder, to extend its support but the timing of the capital infusion depends on regulatory clearance. The minimum capital requirement has been in force since 2016. Fitch downgraded HDFC Bank on January 29, 2018 after the State failed to provide the capital to the bank in a timely manner.
HDFC Bank’s rating reflects Fitch’s expectation that the bank will receive extraordinary support from the sover