Fitch Ratings has downgraded the National Long-Term Ratings of 10 Sri Lankan banks following the recent sovereign downgrade and recalibration of the agency's Sri Lankan national rating scale.

The recalibration is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch's downgrade of Sri Lanka's Long-Term Local Currency Issuer Default Rating (IDR) to 'CC' from 'CCC'/Under Criteria Observation on 1 December 2022. Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of 'CCC+' or below.

National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka's national scale ratings are denoted by the unique identifier '(lka)'. Fitch adds this identifier to reflect the unique nature of the Sri Lankan national scale. National scales are not comparable with Fitch's international rating scales or with other countries' national rating scales. For details, see Fitch Ratings Recalibrates Sri Lanka's National Rating Scale, dated 19 December 2022.

The National Ratings of the Sri Lankan banks consider their creditworthiness relative to other issuers in the country. The recalibration of the Sri Lankan National Rating scale has resulted in downgrades of the National Long-Term Ratings of the following banks:

Bank of Ceylon (BOC) to 'A(lka)'/Rating Watch Negative (RWN) from 'AA-(lka)'/RWN

People's Bank (Sri Lanka) (PB) to 'A(lka)'/RWN from 'AA-(lka)'/RWN

Commercial Bank of Ceylon PLC (CB) to 'A(lka)'/RWN from 'AA-(lka)'/RWN

Hatton National Bank PLC (HNB) to 'A(lka)'/RWN from 'AA-(lka)'/RWN

Sampath Bank PLC (Sampath) to 'A(lka)'/RWN from 'AA-(lka)'/RWN

Cargills Bank Limited (CBL) to 'A(lka)'/RWN from 'A+(lka)'/RWN

DFCC Bank PLC (DFCC) to 'A-(lka)'/RWN from 'A+(lka)'/RWN

National Development Bank PLC (NDB) to 'A-(lka)'/RWN from 'A(lka)'/RWN

Seylan Bank PLC (Seylan) to 'A-(lka)'/RWN from 'A(lka)'/RWN

Nations Trust Bank PLC (NTB) to 'A-(lka)'/RWN from 'A(lka)'/RWN