Fitch affirms and withdraws HSBC SL at ‘AAA’(lka) over commercial reasons

Fitch Ratings Lanka has affirmed and simultaneously withdrawn the rating of HSBC Sri Lanka branch’s (HSBCSL) national long-term rating at ‘AAA(lka)’ with a stable outlook due to commercial reasons.

HSBCSL’s rating is at the highest end of the national rating scale and reflects the credit profile and financial strength of The Hongkong and Shanghai Banking Corporation Limited (HKSB; long-term issuer default rating (IDR): AA-/Stable).

The rating is tied to HKSB’s IDR because of HSBCSL’s legal status as a branch of HKSB, making HSBCSL an extension of the same legal entity as HKSB. HKSB’s rating is higher than Sri Lanka’s long-term local- and foreign-currency IDRs of ‘B+’ with a negative outlook. As a result, HSBCSL’s rating on the national rating scale is mapped to ‘AAA(lka)’. Fitch believes support from HKSB would be forthcoming if required, subject to regulatory constraints on remitting money into Sri Lanka.