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HNB reports Rs.13 b profit in nine months

15 Nov 2021

Hatton National Bank PLC (HNB) reported Rs 12.2 billion in profit after tax (PAT) for the nine-month period ended September 2021. HNB Group recorded Rs 13.4 billion in PAT for the period. HNB Chairperson Aruni Goonetilleke commented: “I am pleased to note that HNB has continued to display resolve and stability within a context of rapidly changing macro dynamics. I wish to place on record my sincere gratitude to our loyal customers for their continuing patronage, every member of team HNB for their commitment and dedication in navigating through multiple challenges and all our stakeholders for their continuing support and trust.” The loan book recorded a growth of 15% during the past 12 months with an increase of Rs. 118 billion. The prime lending rate (PLR) picked up following the upward revision in policy rates in August 2021. However, the average PLR between January to September this year was approximately 300 bps lower than the average rate which prevailed in the corresponding period of 2020. As a result, interest income for the nine months declined by 8.9% year-on-year (YoY) to Rs. 72.5 billion.  Similar trend in average cost of deposits combined with zealous focus on CASA which grew by Rs. 52.9 billion to Rs. 436.6 billion as of September, led to interest expenses being lower by 19.3% YoY to Rs. 37 billion. Resulting net interest income exhibited a 5.2% growth to Rs. 35.6 billion. The CASA mobilisation efforts also facilitated total deposit growth of just under 15% YoY over 12 months from September 2020. Despite periodic disruptions to business activity in 2021 owing to lockdowns, the bank was able to grow fee and commission income by 22.8% YoY to Rs. 6.7 billion. Cards and trade businesses demonstrated strong growth along with digital channel driven fees and commissions. The depreciation of the rupee relative to last year resulted in net exchange gains, largely stemming from on balance sheet positions and FCBU earning revaluations, increasing by Rs. 2.8 billion over the corresponding period, a substantial portion of which is reflected in “other operating income”. Commenting on the performance, HNB MD/CEO Jonathan Alles stated: “The banking sector of Sri Lanka has demonstrated resilience over a prolonged period of extreme uncertainty. As a domestic systemically important bank, HNB has been in the forefront recording superior asset quality, capital and liquidity levels, while delivering sound and sustainable returns.”

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