Sri Lanka HNB Assurance ‘A(lka)’ rating confirmed

Directory launched in the presence of Jagath Perera, CA Sri Lanka President, Manil Jayesinghe, CA Sri Lanka Vice President, Harsha Basnayake, Ernst & Young Asia Pacific Transaction Advisory Managing Partner, Aruni Rajakarier, Chairperson of the CA Sri Lanka Women Empowerment Committee, Anoji De Silva, Alternate Chair of the Women Empowerment Committee and Dulani Fernando, CA Sri Lanka CEO

May 06, 2011 (LBO) – Fitch Ratings Lanka has affirmed HNB Assurance’s (HNBA) National Long-Term rating and its National Insurer Financial Strength (IFS) rating at ‘A(lka)’ with stable outlooks. The ratings reflect HNBA’s adequate risk-based capital position, conservative investment strategy and stable profitability progression, a statement said.

The ratings also factor in Fitch’s expectations of continued support from HNBA’s parent – Hatton National Bank (HNB; ‘AA-(lka)’/Stable), given the latter’s majority ownership in HNBA and the perceived strategic importance of the insurance subsidiary.

“However, the ratings are constrained by HNBA’s modest market share and increased competition in the local market,” the rating agency said.

The stable outlook reflects Fitch’s expectation that HNBA’s capital will improve with the announced 390.6 million rupee equity likely to be infused by 6 May 2011.

It also reflects Fitch’s belief that the company will maintain its “sound operational and financial performance with emphasis on profitability and a conservative investment strategy amid improving macro-economic conditions.”

HNB and HNBA share the common brand, and the latter contribu