Sept 22, 2009 (LBO) – Fitch Ratings said it has upgraded Sri Lanka HNB Assurance’s (HNBA) National Long-term rating to ‘A(lka)’ from ‘A-(lka)’ with a stable outlook. Concurrently, Fitch has affirmed HNBA’s National Insurer Financial Strength (IFS) rating at ‘A(lka)’.
“The upgrade of HNBA’s National Long-term rating reflects mainly the implicit capital, franchise and distribution support from Hatton National Bank (HNB, National Long-term rating ‘AA-(lka)’),” the rating agency said in a statement.
HNBA’s major shareholders are HNB with a 59.99 percent stake and Alliance Finance Co with 9.97 percent, while the remaining 30.04 percent of the company’s shares are widely held.
With total assets of 2.8 billion rupees, HNBA was Sri Lanka’s sixth largest insurer at end-2008.
“Although parental support has always been a critical element of HNBA’s credit profile, Fitch believes the company’s strategic importance to the bank has grown since its incorporation in 2001,” says Stanley Tsai, Director in Fitch’s insurance team.
Fitch said it expects HNBA to further increase its “distribution synergies” with its parent through on-going product development, b