...Risks Remain Significant: The Rating Watch Negative (RWN) on Nations Trust Bank's (NTB) National Long-Term Rating reflects the potential for the bank's creditworthiness to deteriorate relative to other entities on the Sri Lankan national ratings scale, given the heightened stress on the bank's funding and liquidity, and its exposure to the sovereign via investment in foreign- and domestic-currency-denominated instruments raising the risk to its overall credit profile. Fitch Ratings believes the sharp rise in inflation, depreciation of the local currency and other economic stresses can distort the bank's underlying financial position in the current operating environment (OE). Weakening Operating Environment: Our assessment of the OE of Sri Lankan banks reflects the pressure on the banks' already-stressed credit profiles following the sovereign's default on its foreign-currency obligations. It also captures the rapid deterioration in the broader economy, including increased interest rates,...
