Fitch views the upside potential of HNB's ratings as limited given its higher risk appetite, which has led to weaker through-the-cycle asset quality compared with peers'. A material increase in risk taking, unless sufficiently mitigated through capital and financial performance, could result in a rating downgrade.
The ratings of senior and subordinated debt are primarily sensitive to changes in HNB's National Long-Term Rating.
Jeewanthi Malagala, CFA
Rukshana Thalgodapitiya, CFA