Fitch also confirmed the bank's subordinated debentures at 'A+(lka)'.
HNB's loan growth was nine percent in the 2008 financial but declined by four percent in the first quarter of 2009 like its peers, with the overall loan mix remaining the same, the agency said.
"Credit concentrations remained high (in 2008), as the five-largest total exposures accounted for 10 percent of loans and 75 percent of equity," it said.
These included related party exposures to the Stassens group at four percent of loans and 30 percent of equity.
Entities related to the Stassen's group hold 31 percent of voting equity of HNB, Sri Lanka's fourth-largest licensed commercial bank with an asset base of 268 billion rupees.
Subsequent to more stringent NPL (non-performing loan) classification after May 2008 for installment loans, the NPLs to loans ratio deterio