Fitch assigns ‘A(lka)’ rating to HNB Grameen Finance
01 Oct 2015 - {{hitsCtrl.values.hits}}
Fitch Ratings has today assigned HNB Grameen Finance Limited (HGL) a national long-term rating of ‘A(lka)’ with a stable outlook.
HGL’s rating reflects Fitch’s expectation of support from its parent, Hatton National Bank PLC (HNB; AA-(lka)/Stable). This view is based on HNB’s majority shareholding (51 percent), its involvement in the strategic direction of HGL through board representation and the common HNB brand.
The two-notch differential reflects HGL’s limited role in the group. HGL is mainly engaged in the provision of microfinance, which is not a significant product for HNB as it accounted for 2.7 percent of the bank’s loan book at end-June 2015. Furthermore, there is limited operational and management integration of the entities.
HNB acquired 51 percent of HGL in November 2014 as part of a financial-sector consolidation programme. The bank rebranded the finance company and now has four seats on HGL’s board, including the chairmanship.
HGL obtained a licence to operate as a finance company in 2010. It accounted for just 1.2 percent of the Licensed Finance Company sector’s assets at end-March 2015.
