The branch also benefits from the implementation of the head

The branch also benefits from the implementation of the head

Fitch Affirms HSBC Sri Lanka at ‘AAAlka’

(The following statement was released by the rating agency)

Aug 29 Fitch Ratings Lanka has affirmed HSBC Sri Lanka (HSBCSL) National Long Term rating at The Outlook is canada goose Stable.

The rating reflects the financial canada goose coats on sale strength of the Hong uk canada goose outlet Kong Shanghai cheap Canada Goose Banking Corporation canada goose uk black friday Limited (HKB; given that HSBCSL is a branch and part of the same legal entity as HKB. Thus, Fitch believes that support from the latter would be like it Canada Goose Outlet forthcoming if required, subject to any regulatory constraints on remitting money into Sri Lanka. HKB is rated above Sri Lanka sovereign Issuer Default Rating of Outlook.

HSBCSL is well integrated into HKB operations, through regular reporting to the head office for monitoring of its performance and management of its risk exposures. The branch also benefits from the implementation of the head office systems and processes to support its local operations. HKB has demonstrated its support to HSBCSL through capital infusions in the past and the availability of funding lines. Further, the branch complements the group broader strategy for the region in light of its strong footprint across Asia. Consequently, Fitch believes that HSBCSL will continue to be of importance to HKB.

The branch loan book expanded by 21.4% in 2010 and 16.4% in H111 (six months ended 30 June 2011) to canada goose clearance sale reflect the recovery of private sector credit demand. Investments in government securities remained significant at 40% of assets at H111. Predominant exposure continued Canada Goose sale to be to the corporate segment Canada Goose Outlet (end 2010: 69% of loans). Exposure to the consumer segment (end 2010: 31% of loans) comprised Canada Goose Jackets largely credit cards (14% of loans) and personal loans (11% of loans). Credit concentrations persisted at canada goose factory sale end Canada Goose online 2010, but stemmed from exposures to large global Canada Goose Coats On Sale and local corporates.

HSBCSL asset quality rebounded in 2010, supported by canada goose uk outlet improved macroeconomic conditions Canada Goose Parka and strong credit risk management. Its gross NPL ratio decreased to 3.6% at end 2010 (end 2009: 5.2%) and further to 2.9% in H111. Further, its provisioning policy canada goose coats is more conservative than the regulatory requirement.

The branch net interest margins (NIMs) decreased uk canada goose to 5% (annualised) in H111 from 6.3% in 2010, partly reflecting the impact of the regulatory interest rate cap on credit card advances in Q410. Despite this, it continued to canada goose store maintain strong profitability, due to decreased credit costs and canadian goose jacket healthy non interest income.

HSBCSL equity/asset cheap canada goose uk ratio increased to 8.8% at H111, after decreasing to 8.5% at end 2010 (end 2009: 10.7%), due to an increase in buy canada goose jacket cheap assets and profit transfers to the head office. Deposits continue to be the primary source of funding for the branch (end 2010: 60%). Foreign currency lending is funded by deposits and funding sourced from the HSBC group buy canada goose jacket (24% of funding at end 2010).

Established in 1892, HSBCSL is Sri Lanka Canada Goose Online largest foreign bank branch and the fifth largest licensed commercial bank, accounting for 6% of banking sector assets at end 2010. It is the largest issuer of credit cards in Sri Lanka. HSBCSL has a network of 16 branches, located primarily canada goose clearance in the Colombo district, and offers a broad canada goose uk shop range of financial products and services canada goose black friday sale.

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