Fitch Upgrades Follow the Sovereign: Credit-Positive for Banks, No Change to Our Forecasts 🏦 Scale Is Rewarded After the sovereign upgrade to 'B-', Fitch lifted BOC and People's Bank to AA+(lka) and COMB to AA(lka). NTB's Outlook moved to Positive, while HNB and Sampath stay at AA-(lka). No change to our forecasts. 💰 A Funding Edge for COMB COMB's higher rating should let it issue Tier 2 debt at tighter spreads than HNB and Sampath. 📉 Risk Premium Is Upside, Not Base Case We keep our ERP unchanged until lower country risk proves durable. A 100bp lower ERP would lift our TPs by 3.0–5.8%. The sector trades at 4.9x PER and 0.67x P/BV. 🎯 Valuation & Recommendation: COMB.N TP (2026E): LKR 257.00 (+30.0%) | BUY COMB.X TP (2026E): LKR 224.00 (+22.9%) | BUY HNB.N TP (2026E): LKR 468.00 (+23.8%) | BUY HNB.X TP (2026E): LKR 390.00 (+21.1%) | BUY SAMP.N TP (2026E): LKR 165.00 (+17.4%) | 2027E: LKR 191.00 (+35.9%) | BUY (Upside based on prices as at 02.11.2026) 👀 Watch: CBSL review (20 Nov), 3Q results, Tier 2 issuance by COMB, HNB and SAMP