DFCC Bank's disposal of its 50% holding in Acuity Partners will unlikely boost its regulatory capital ratios, Fitch Ratings said in a Sunday release.
The transaction will mainly enhance DFCC's capitalization at the bank level, Fitch said.
The sale should enhance the Sri Lankan bank's common equity Tier 1 ratio by about 100 basis points at the bank level, with a negligible effect at the group level, according to the rating agency.
After the disposal, Fitch expects DFCC's bank-level and group-level capital ratios to converge, although its capitalization will still be weaker than peers in the A(lka) category.
The divestment could also modestly reduce the company's group earnings, as Acuity Partners accounted for about 7% of operating profit in the past years, Fitch said.
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