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(L-R) : Jeevith Senaratne, Director Operations - Star Garment Group; Shanaka Rabel, Group Chief Digital and Transformation Officer - Stretchline Holdings Ltd; Janaka Botejue, Chairman – Bernard Botejue Industries; Sanjeewa Kodikara, Chief Information Officer- Hirdaramani Group

May 16, 2007 (LBO) – Fitch Ratings has upgraded Hatton National Bank’s long term rating by one notch to AA- (lka) and the rating outlook also changed to stable from positive, the rating agency said Wednesday. HNB is listed, with two main shareholders: Stassen’s group and Brown & Co. Ltd group holding 32.5 percent and 21.0 percent of HNB’s voting equity. “The upgrade of HNB’s National Long-Term rating recognises its continuing trajectory of improving profitability, capital formation and better asset quality,” Fitch said.

The agency also upgraded HNB’s subordinated debentures to ‘A+(lka)’ from ‘A(lka)’. Subsequently, the rating Outlook was revised to stable from positive.

The five largest customer exposures represented 12 percent of loans and 123 percent of equity at end-2006 (11 percent and 114 percent in 2005).

Included in the top five were related party exposures to the Stassen’s Group of Companies with 3.9 percent of loans and 40.3 percent of equity at end 2006 (3.8 percent of loans and 37.9 percent of equity in 2005).

“An upward revision in the rating would require improvements in asset quality and solvency, while sustaining its profitability and capital formation,” Fitch said.

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