Credit Rating

Fitch Affirms Hatton National Bank at 'AA-(lka)'; Outlook Stable

Fitch Ratings Report - January 2019

Fitch maintains a negative outlook on the Sri Lankan banking sector as we expect operating conditions to remain difficult amid a challenging economic environment, which will continue to put pressure on bank performance. Sri Lanka’s sovereign rating was downgraded to ‘B’ from ‘B+’ in December 2018. The Outlook is Stable.
Rating sensitivities- national long-term rating and senior debt

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.

Analysts:
Jeewanthi Malagala, CFA
+9411 2541900
jeewanthi.malagala@fitchratings.com

Rukshana Thalgodapitiya, CFA
+9411 2541900
rukshana.thalgodapitiya@fitchratings.com