Moody's Investors Service has downgraded the long-term local currency deposit and foreign currency issuer ratings of Bank of Ceylon (BOC), Hatton National Bank Ltd. (HNB) and Sampath Bank PLC (Sampath) to B2 from B1.
At the same time, Moody's has downgraded the long-term foreign currency deposit ratings of the same three banks to B3 from B2.
Moody's has affirmed the short-term local and foreign currency deposit ratings of the banks at NP.
They have also downgraded the Baseline Credit Assessments (BCAs) and adjusted BCAs of the three banks to b2 from b1.
As a result, Moody's has downgraded the banks' long-term local and foreign currency Counterparty Risk Ratings (CRRs) to B1 from Ba3, and their long-term Counterparty Risk Assessments (CRAs) to B1(cr) from Ba3(cr).
The rating actions follow the downgrade of Sri Lanka's sovereign rating to B2 from B1 on 20 November 2018, and the change in the sovereign's rating outlook to stable from negative on the same date. To reflect the deterioration in the operating environment, Moody's has also lowered Sri Lanka's Macro Profile to "Weak" from "Weak+". The rating action on Sri Lanka's sovereign rating is discussed in greater detail in Moody's press release dated 20 November 2018: