HNB Group Archives

November 13, 2023

Bank PAT of Rs 16.6 Bn
Deposits cross Rs 1.5 Trillion
Loans grow by Rs 34Bn in Q3 2023 to cross Rs 1 Trillion
Provides over Rs 32 Bn for Impairment
Maintains sound capital and liquidity levels

Hatton National Bank PLC posted a profit before tax of Rs 26.3 Bn and a profit after tax of Rs 16.6 Bn during the nine months ended September 2023. The Group recorded a consolidated PBT and PAT of Rs 29.0 Bn and Rs 18.8 Bn, respectively for the period.

Commenting on the performance, Nihal Jayawardene, Chairman of HNB PLC, stated that “Sri Lanka has progressed well during the year with signs of recovery as indicated by most macro-economic variables. While we remain positive on the country’s journey ahead, as a premier bank in Sri Lanka, we are delighted to have surpassed Rs 1.5 trillion in deposits. It is noteworthy to mention that a growth of Rs 500 Bn in deposits, has been achieved since June 2021, and we would like to place on record our sincere gratitude to our valued customers for their unwavering trust and confidence, despite extremely turbulent macro conditions experienced during this period”.

The Bank’s interest income recorded a YoY growth of 63.5%, reaching Rs 220.7 Bn during the first nine months, in the background of a sharp decline in interest rates during the third quarter. Interest expense increased at a faster pace of 115% YoY, resulting in a 17.1% YoY growth in net interest income which improved to Rs 83.2 Bn. Bank’s net fee and commission income grew by 6.3% YoY to Rs 11.7 Bn primarily fueled by cards and digital channels. The appreciation in the Sri Lankan rupee against the US dollar by approx. 12%, during the period resulted in the Bank having to record an exchange loss of Rs 2.5 for the nine months.

HNB continued to maintain its asset quality well above the industry, with net stage 3 ratio at 4.9% and stage III provision cover at 50.7%. The Bank recognised a total impairment charge of Rs 32.4 Bn during the first nine months of 2023, which comprised of impairment on account of loans and advances and foreign currency denominated government securities.

HNB’s cost to income ratio stood at 28.5% for the nine months, despite, operating expenses increasing by 16.1% YoY to Rs 26.5 Bn mainly driven by inflationary pressure.

Jonathan Alles, Managing Director /Chief Executive Officer of HNB PLC stated that, “As the country displays signs of recovery, we are pleased to record robust overall performance for the nine months, which outlines the proactive and prudent actions taken during adverse times. I would like to extend my heartfelt gratitude to the entire team at HNB for their continued dedication and commitment amidst many challenges.”

“We believe that the external debt restructuring programme would also be concluded soon, taking in to account the strain on the banking sector, which has incurred significant impairment charges of nearly Rs 580Bn since 2022 and the increased effective tax rate of over 50% for the industry. Preserving banking sector stability and capital would be critical to enable banking sector to play a catalytic role in the revival of the nation and its people. We eagerly look forward to partner this resurgence as a responsible systemically important bank in the country”.

The Bank’s total effective tax rate increased to 51.6% from 37.4% in the previous year, due to the increase in corporate tax rate from 24% to 30% and the introduction of social security contribution levy with effect from October 2022.

Bank’s asset base improved to Rs 1.86 Tn as at end September 2023. Significant reduction in market lending rates in line with Central Bank’s relaxed monetary policy has enabled the Bank to record a Rs 34 Bn growth in gross loans, to surpass Rs 1.0 Tn in the third quarter. The Bank reached a significant milestone as its deposit base crossed the Rs 1.5 Trillion mark for the first time.

HNB recorded Tier I and Total Capital Adequacy Ratios of 11.91% and 14.73% against the minimum statutory requirements of 9.5% and 13.5% respectively, with the provision to drawdown a further 250 bps from the Capital Conversation Buffer. The Bank has continued to maintain a strong liquidity position with a Statutory Liquid Asset Ratio and an all currency Liquidity Coverage Ratio, which are both well above regulatory minimum requirements of 20% and 100% respectively.

HNB is rated A (lka) by Fitch Ratings and was awarded the esteemed title of “Sri Lanka’s Best Corporate Citizen” for 2022 by the Ceylon Chamber of Commerce. Other major accolades include, being adjudged the “Best Retail Bank in Sri Lanka” for the 13th occasion by the Asian Banker, being declared the “Best SME Bank” by Asiamoney Magazine, as well as securing a Top 5 position on Business Today’s Top 40 rankings for 2022. HNB was also ranked among Sri Lanka’s Top 10 Most Admired companies in 2022 by the Chartered Institute of Management Accountants, in collaboration with the International Chamber of Commerce Sri Lanka.

August 16, 2023

Bank PAT improves to Rs 8.6Bn
Impairment charge of Rs 28 Bn in 1H
Deposits grow by nearly Rs 70 Bn in 6 months
Tier I and total capital ratios improve to 12.48% and 15.58% respectively

Hatton National Bank PLC continued its steady performance in Q2 2023, posting a 1H 2023 PBT of Rs 13.6 Bn, while 1H 2023 PAT stood at Rs 8.6 Bn, growing 56% YoY. Meanwhile, the Group made a consolidated PBT and PAT of Rs 15.2 Bn and Rs 9.8 Bn respectively.

Commenting on the performance, Nihal Jayawardene, Chairman of Hatton National Bank PLC, stated that “This quarter underscored the Sri Lankan economy displaying signs of normalisation, with inflation moderating, interest rates gradually pulling down, and the Rupee appreciating. Moreover, the announcement of the much-awaited Domestic Debt Optimisation (DDO) plan and the resulting clarity, marked a significant step towards settling the qualms surrounding the debt restructuring programme and its potential impact on the banking sector.”

Although interest rates tapered off towards the latter part of Q2 2023, 1H 2023 rates still remained relatively higher when compared with the corresponding period in 2022, enabling the Bank to report a net interest income of Rs 59.3 Bn in 1H 2023, up 48% YoY. Additionally, net fee and commission income grew by 12% YoY to Rs 8.0 Bn, driven by increased activity in cards, remittances, trade and digital platforms.

On the back of improved foreign inflows and the consequent rising dollars in circulation, the Rupee appreciated by approx. 15% YoY in the first six months of 2023. Currency volatility caused the Bank to record a net exchange loss of Rs 3.8 Bn for 1H 2023, primarily stemming from revaluation losses of FCBU retained earnings.

Despite the challenges, the Bank continued to prioritise asset quality, with the net stage III loan ratio at 4.77% and stage III provision cover at 51.4% as at end June 2023. In terms of impairment provisions, the Bank recorded a cumulative impairment of Rs 28.3 Bn in 1H 2023 which included impairment on loans and advances as well as on investments in foreign currency denominated government securities.

The Bank’s 1H 2023 operating expenses increased by 19% YoY, to Rs 17.6 Bn driven largely by inflation. Nevertheless, the Bank maintained an efficient cost-to-income ratio of 27% for the first half of 2023.

Jonathan Alles, Managing Director and Chief Executive Officer of Hatton National Bank PLC stated that, “We are pleased to see the positive developments on the country’s macroeconomic front and HNB’s solid performance in the first six months of this year. We commend the government’s DDO plan – which insulated the banking sector from any reprofiling of Treasury Bills or Bonds. This in turn enables banks, inundated with mounting credit impairment and higher taxes, to use much needed capacity in supporting the revival of key sectors and the broader economy.”

“Going forward, we will step up efforts to expand support to those who have been adversely impacted over the past few years, with a particular focus on the micro and SME sector. Our role towards developing SMEs goes beyond that of a traditional financial partner, as we provide assistance on capacity building and technical know-how through strategic partnerships with key multilateral agencies and international stakeholders.

“While we will continue to enhance our digital offerings and infrastructure, we will also explore capitalising on emerging digital technologies to improve our service delivery and workplace productivity. Our consistent performance notwithstanding extremely volatile conditions, is a testament to the untiring efforts of the HNB Team. Creating a culture of learning and development is vital to the success of any organisation, and HNB reiterates its commitment towards investing in our employees’ growth and wellbeing.”

“As Sri Lanka charts a new course towards its economic recovery, we at HNB remain undeterred in supporting that journey, as we continue to raise the bar as the country’s premier corporate citizen”

Due to the increase in the corporate tax rate from 24% to 30% coupled with the introduction of the social security contribution levy w.e.f. October 2022, the Bank’s total effective tax rate for 1H 2023 increased to 53%.

Since March 2023, the asset base marginally grew to Rs 1.8 Trillion as at end June 2023. Moreover, given the tight credit conditions and exchange rate volatility prevailing for a majority of the June quarter, the Bank’s gross loan book dropped to Rs 986 Bn as at end of 1H 2023. Meanwhile, as deposits remained attractive to customers, the Bank’s deposit base reached closer to Rs 1.5 Trillion at the end of June 2023.

Compared to Q1 2023, the Bank recorded stronger Tier I and Total Capital Adequacy Ratios of 12.48% and 15.58% against the minimum statutory requirements of 9.5% and 13.5% respectively, with the provision to drawdown a further 250bps from the Capital Conservation Buffer. HNB’s liquidity levels also continued to be strong and well above the regulatory minimum requirements, with Statutory Liquid Assets ratio around 40% (vs. a 20% requirement) and all currency Liquidity Coverage ratio at 341.5% (vs. a 100% requirement).

HNB is rated A (lka) by Fitch Ratings and was awarded the esteemed title of “Sri Lanka’s Best Corporate Citizen” for 2022 by the Ceylon Chamber of Commerce. Other major accolades include being ranked among the Top 1,000 Banks in the World for six consecutive years by the acclaimed UK based “The Banker Magazine”, being adjudged the “Best Retail Bank in Sri Lanka” for the 13th occasion by the Asian Banker, being declared the “Best SME Bank” by Asiamoney Magazine, as well as securing a Top 5 position on Business Today’s Top 40 rankings for 2022.

February 24, 2021

Group PAT Rs 13.7Bn
Total deposits grow by Rs 158 Bn
CASA grows by Rs 99Bn recording a 35% increase
NPA ratio improves to 4.3%
Among the most liquid and best capitalized banks
Supports economic revival through extensive financial support

Hatton National Bank PLC (HNB) demonstrated resilience and an unwavering focus on sustainable business performance as it posted Rs 13.7 Bn in Group Profit After Tax during 2020, a year laden with unprecedented circumstances and challenges. Bank level Profit After Taxes amounted to Rs 11.5 Bn.

Commenting on the performance, Chairman of HNB Dinesh Weerakkody stated that “2020 has been a year unlike any other in recent memory as the COVID-19 Pandemic transformed the socioeconomic landscape dramatically, elevating uncertainty and risks at every level, both locally and globally. We proved our ability to adjust rapidly as we leveraged technology and adapted to the new normal, sharing the responsibility to stay safe as well as keep our communities safe and empowered.”

He added that “even before the onset of the pandemic, our economy was adversely affected due to the Easter Sunday bombings of 2019. The onset of the pandemic aggravated our economic woes, straining cash flows, at Individual, Entity and National levels while paving the way for a disruptive transformation that vaulted us to a new era of exciting possibilities. At HNB, we have reset our agenda and will continue to do so going forward, embedding the new-found speed and agility into our ways of working and identify the best ways to respond, making sure we sustain such best practices in our operations. Unlike ever before, we, as a leading bank, have a crucial role to play in the task of restoring and supporting the livelihoods of our communities.”

Jonathan Alles, Managing Director/CEO of the Bank commenting on the performance stated that “in the wake of the COVID-19 pandemic, we reprioritised our focus to ensure that we navigate the uncertainties and risks effectively to safeguard the interests of all our stakeholders. Health and safety, business sustainability and supporting the customers in need were at the core.”

He added that “our dedicated team of 4,800+ members rallied around together to provide the much needed financial relief and banking needs despite lockdowns. During the first phase we provided debt moratoria to customers covering approximately 40% of our loan book. With lockdowns being limited to few localities during the second wave of the pandemic and most industries recommencing their operations, the moratoria extended under the second phase has reduced to approximately 15% of the loan book which is a positive sign for the economy. We also extended working capital finance of over Rs 24Bn to affected sectors at concessionary interest rates under the CBSL relief scheme and set up a Rs 5Bn fund through our own funds to support SMEs. A microfinance grant of Rs 20Mn was also distributed among 200 needy customers. Apart from financial relief we facilitated customer transactions without any disruption, through our branches, digital channels and payment solutions such as SOLO, MOMO, IPG and Appigo.”

The accommodative monetary policy adopted by the CBSL to drive economic growth saw AWPLR dropping sharply by over 400bps during the year. Nevertheless, the demand for credit did not pick up as anticipated due to prevailing uncertainty. As a result, the Bank’s interest income declined by 10% YoY to Rs 103.9 Bn. The outstanding growth of approx. Rs 99 Bn in CASA deposits during the year coupled with low interest rates eased pressure on interest costs to a certain extent. However, Net Interest Income of the Bank dropped by 9% YoY to Rs 44.7 Bn. Net fee income declined more steeply by 16% YoY to Rs 7.5 Bn as Import restrictions, depressed demand in export markets, lower card spends, particularly during the first wave of COVID, the slow-down in economic activity as well the directions imposed by CBSL to waive off certain fees until September 2020 collectively impacted this channel of income.

Lower swap costs and volumes along with exchange rate movements during the year lead to an improvement of Rs 2.2 Bn in net trading gains compared to 2019. The Bank also recorded a capital gain of Rs 1.1 Bn through disposal of government securities during the final quarter of 2020.

A facility of over Rs 11.5Bn to an SOE which was classified as NPA in 2019 was regularized during the last quarter of 2020. This together with the Bank’s concerted efforts on improving asset quality enabled HNB to record a marked improvement in its NPA ratio to 4.3% from 5.9% reported as at end of 2019 despite the stressed market conditions. Nevertheless, the Bank made prudent provisions taking in to consideration factors such as elevated risks in certain sectors and the deterioration in economic conditions. Furthermore, the Bank recognised substantial impairment charges on account of its investments in dollar denominated government securities due to the sovereign downgrade by rating agencies. These factors resulted in provisions increasing by 58% to Rs 15.3Bn for the year ended December 2020.

Given the negative impact on the top line the Bank focused on cost optimization opportunities. This enabled the Bank to record a drop of Rs 1.6 Bn in total operating expenses compared to the previous year. Accordingly, the Cost to Income ratio improved to 39.3% despite the drop in operating income, without any downsizing or compromise on staff salaries.

The removal of debt repayment levy and NBT proved to be timely as the banking sector stepped into support the economic revival. Profit Before Tax (PBT) amounted to Rs 15.1 Bn while the PAT of Rs 11.5 Bn was 18.3% YoY lower than that reported in 2019.

The Bank’s asset base expanded by Rs 167 Bn to Rs 1.3 trillion while the loan book recorded a moderate growth of 5.5%, The CASA ratio improved to 40% from 35% recorded a year ago, as CASA deposits grew by 35% to Rs 384Bn. The funding side of the balance sheet was also bolstered by the USD 60 Mn long term loan from PROPARCO, the French Development Agency. This borrowing will be utilized to fund SME growth in 2021. Despite the substantial moratoria granted, the liquidity levels remained strong with LAR at 39.6% and LCR at 290.3% against the regulatory requirement of 20% and 90% respectively. HNB is also among the best capitalized banks with Tier I and Total Capital Adequacy Ratios of 14.73% and 17.98% respectively well above the statutory requirement.

Insurance and Investment Banking led contributions from subsidiaries as the HNB Group made Profit Before Taxes of Rs 17.6 Bn. Total Group assets rose by 14.5% YoY to Rs 1.4 Trillion. The Bank declared a final dividend of Rs 8.00 per share consisting of a cash dividend of Rs 4.50 and a scrip dividend of Rs 3.50 per share.

Jonathan Alles further stated that “through our strategic refocus we were able to demonstrate resilience, strength and stability in a year that posed unprecedented challenges. I would like to extend my heartfelt gratitude to the entire team for their untiring efforts and dedication in an extremely difficult year and to all other stakeholders for continuing to place their trust and confidence in us.”

He added that, “with vaccines being administered among the general public currently we look at the future with hope and optimism. As the ‘partner in progress’ for generations of Sri Lankans, and our roots in serving micro, small and medium enterprises, we have strengthened our structures, systems and processes internally to play a catalytic role in the resurgence of our nation.”

HNB continues to be recognized locally and internationally and is ranked among the Banker Magazine UK Top 1000 Banks of the year for the fourth consecutive year. HNB was also awarded as the Best Retail Bank in Sri Lanka by the Asian Banker Magazine in 2020, making it the 11th occasion it has been bestowed with the honour. The Asian Banker also adjudged HNB as the Best Managed Bank during COVID 19 and chose MD/CEO of the Bank Mr. Jonathan Alles as the Best CEO during the pandemic. Locally the Bank was ranked among the Top 10 most Admired Corporates of the country by CIMA/ICCSL/DailyFT while the “Business Today” ranked HNB among the Top Three Corporates in the Country. HNB has 252 branches Island wide and a Credit Rating of AA- (lka) assigned by Fitch Ratings.

May 19, 2020

Bank PAT Rs 2.6 Bn
Deposits grow by Rs 31 Bn to Rs 841 Bn
Rolls out relief measures in line with CBSL guidelines

Hatton National Bank PLC (HNB) posted a Profit After Tax (PAT) of Rs 2.6 Bn for Q1 2020, representing an increase of Rs 607 Mn over Q1 2019.

Dinesh Weerakkody, Chairman of HNB commented that, “2019 was extremely challenging for the entire banking sector and we welcomed the year 2020 with great optimism. The first two and half months of 2020 didn’t disappoint us. The COVID-19 pandemic which has engulfed the globe, however, has been unprecedented in its impact across the economic spectrum. With almost all major economies significantly impacted, with resultant lockdowns leading to severe disruption in international trade and travel and Sri Lanka appearing to be quite successful in managing the situation at the moment, the forward challenges though to our nation seem quite significant with the economy expected to contract. Whilst the efforts and sacrifices of the first responders providing the front line defence against the deadly virus are hugely appreciated and the government’s effort to drive up economic activity by way of further monetary policy relaxation and relief packages to all affected businesses and individuals is of immense value to us all, the fear of the unknown remains and can exacerbate these forward economic perceptions and impacts”.

The Managing Director / CEO of HNB Jonathan Alles, added that “While the performance for Q1 shows a growth from 1Q 2019, it also reflects the challenging environment faced by the banking industry during this period, especially towards the latter part of the first quarter. The measures taken by the Government to relieve the banking sector which was taxed at around 58%, are greatly appreciated, as such high rates of taxes on the banking sector would have been counter-productive especially at a time like this.”

The interest income of the Bank dropped by 7.2% YoY to Rs 27.2 Bn, due to the drop in AWPLR by nearly 300 bps over the past 12 months up to March 2020. Interest expense also dropped similarly by 3.5% YoY to Rs 15.8 Bn. Accordingly, Net Interest Income for the period was at Rs 11.4 Bn which is 11.9% below the level attained in the corresponding quarter of 2019.

Net Fee and Commission Income of Rs 2.1 Bn compared to Rs 2.2Bn in 2019, contributed 14% to the Bank’s Total Operating Income (TOI). Relatively lower trade and economic activity even prior to the COVID 19 pandemic resulted in fee income being marginally lower. Nevertheless, revenue from digital channels continued to be encouraging.

The rupee depreciated significantly since mid-March triggered by COVID-19 recording a deprecation of over 4% during the first quarter. This was reflected in the net other operating income of Rs 1.9 Bn against the Rs 1.1 Bn loss recorded in Q1 2019.

The non-performing advances ratio for the Bank remained flat at 5.9% compared to December 2019. In Q1 2019, the Bank made substantial impairment provisions of Rs 4.1 Bn with asset quality deteriorating industry wide. Similarly, given the implications of COVID-19, the Bank has incorporated initial adjustments based on the limited information available in line with the guidelines issued by CA Sri Lanka and has made an impairment provision of Rs 4.7 Bn for the first quarter of 2020.

Operating Expenses growth remained flat YoY at Rs 5.9 Bn while the Cost to Income ratio also remained almost unchanged from Q1 2019 at 39.65%, well below industry average. Given the challenging operating environment, optimizing cost would remain a key priority this year.

The operating profit before VAT and taxes declined by 13.5% to Rs 4.2 Bn compared to Rs 4.9 Bn in the corresponding period of 2019. The removal of Nations Building Tax (NBT) and Debt Repayment Levy (DRL) with effect from December 2019 and January 2020 respectively resulted in a lower total effective tax rate and contributed to Profit Before Tax (PBT) increasing by 2.4% YoY to Rs 3.3 Bn. Income taxes were also much lower as NBT & DRL payments did not qualify for relief in income tax charge assessment for Q1 2019 and resulted in a PAT of Rs 2.6 Bn for the period compared to Rs 2 Bn in Q1 2019.

The loan book which remained almost flat in 2019, grew by Rs 12.2 Bn during the quarter to Rs 754 Bn while deposit growth outpaced loans, rising by Rs 31 Bn within the quarter to Rs 841.1 Bn. HNB mobilizes one of the largest CASA bases in the industry, which grew by 6.8% during Q1 to surpass Rs 300 Bn (Rs 304.1 Bn), with the CASA ratio improving to 36.2% compared to 35.2% as at end of December 2019. The trust placed by customers in the Bank during these uncertain times speaks volumes about HNB’s brand as one of the strongest and trusted banks in the Country. HNB also continues to be among the best capitalized banks in Sri Lanka, with Tier I and Total Capital ratios at 13.85% and 17.25% respectively as against the present regulatory minimum requirements of 8.50% and 12.50% applicable as a domestic systemically important bank.

All HNB Group companies contributed to the Group PAT of Rs 3.3 Bn which improved in line with the performance of the Bank. The Bank recorded a ROA of 0.93% while the Group ROA was at 1.09%. The Group’s total asset base expanded by Rs 22.6 Bn during the quarter, representing a 1.9% increase since December to Rs 1.2 Trillion.

Commenting on how HNB has responded to the COVID-19 situation, Jonathan Alles stated that “Q1 2020 ended in the height of COVID-19 and I would like to extend my heartfelt gratitude to my team for the remarkable commitment and resilience demonstrated over the past two months. As an essential service, we continue to operate in curfew and non-curfew areas as per the guidelines issued by the Central Bank of Sri Lanka. Health and safety of our staff, customers and all our stakeholders is our utmost priority and we continue to provide maximum safeguard measures as prescribed by the authorities. Our investments to ensure ‘future readiness ’paid rich dividends with our range of digital products including, SOLO-the payment app, MoMo – the mobile POS, internet payment gateway and Appigo being extremely effective in facilitating digital payments within the social distancing requirements. We have proactively engaged our customers to provide the necessary support in this critical time of need and we stay deeply committed to partner the resurgence of our nation as we have continued to do in the past.”

He added that, “the outbreak has led to the emergence of a ‘New Norm ’of operating. While we would re-assess our priorities accordingly, our focus would continue to be on delivering sustainable value to all our stakeholders.”

HNB is the first local Bank in Sri Lanka to receive an international rating on par with the sovereign from Moody’s Investor Services and has a national long term rating of AA- (lka) from Fitch Ratings. The Bank is also ranked amongst the ‘Top 1000 World banks ’as published by the prestigious Banker Magazine UK, a recognition bestowed upon HNB since 2017. HNB was recognized as Sri Lanka’s Best Bank by Euromoney Magazine in 2019 while ‘Business Today ’ranked HNB as the Number One Corporate in its prestigious and most recent Top 30 rankings.

November 17, 2017

Group assets cross Rs 1 Trillion
Shareholder funds increase to Rs 2Bn
Total tax charge of Rs 9 Bn for the Group

Hatton National Bank PLC (HNB) continued its growth momentum to post a group Profit before VAT & NBT of Rs 20.7 Bn while the PBT and PAT improved to Rs 16.8 Bn and Rs 11.8 Bn respectively for the first nine months of the year while group assets crossed Rs 1 Tn. PBT at Bank level surpassed Rs 15 Bn and PAT was recorded at Rs 10.9 Bn.

Interest income of the Bank grew by 33.5% year on year (yoy), supported by a 14.9% yoy growth in advances. The 14.9% yoy growth in current account and savings account (CASA) deposits to Rs

247.2 Bn, enabled to improve the net interest income of the Bank by 18.7% yoy to Rs 29.6 Bn.

The interest income was complimented by fee and commission income which grew by 20.4% yoy on a net basis, adding Rs 6.1 Bn to the Bank’s topline. Credit card business, trade finance and guarantee commission continued to be key contributors towards this growth.

An increase in swap rates as well as the volume of swaps led to the ‘trading loss’ increasing to Rs

2.8 Bn during the first nine months of 2017 compared to the loss of Rs 1.3 Bn in the corresponding period of the previous year. However the corresponding increase from position revaluations contributed to a 29.5% rise in ‘other operating income’ to Rs 2.8 Bn from Rs 2.1 Bn in 2016.

The NPA ratio increased to 2.6% as at end of September 2017 while the total impairment charge for the period amounted to Rs 2.3 Bn.

The initiatives adopted in the recent years towards operational excellence continued to bear fruit with HNB being able to contain the increase in total operating expenses to 7.5% yoy. Thus, the cost to income ratio for the nine months ended September 2017 improved by over 300 bps to 40.5% from the level reported for the corresponding period in 2016.

The upward revision in VAT to 15% from 11% in 2016, led to an increase of 29.6% in VAT & NBT charges for the period. This resulted in the Bank’s PBT growth being constrained to 6.3%, leading to a PBT of Rs 15.4 Bn for the period. The Bank’s total tax charge for the period (including VAT & NBT) amounted to Rs 8.2 Bn with the effective tax rate being 43% for the nine months ended September 2017.

Commenting on the performance, MD/CEO of HNB Mr. Jonathan Alles stated that “HNB continues to deliver sound performance, notwithstanding the challenging conditions. We are humbled by the prestigious local and international accolades and are truly grateful to our stakeholders for their unstinted patronage”. He added “we strongly believe that HNB is very well positioned to capture the growth opportunities as Sri Lanka envisions to be the hub in the Indian ocean and we stay committed to enhance value to all our stakeholders in this journey”.

The asset base of the Bank grew by 11% to Rs 953.3 Bn while net loans and advances reached Rs 625 Bn as at end of September 2017. HNB was successful in recording an impressive Rs 76.4 Bn growth in deposits during the period with the total deposits nearing Rs 700 Bn.

The rights issue which was concluded successfully during the third quarter of 2017 enabled the Bank to improve its Tier I and Total Capital Ratios to 12.91% and 16.42% respectively, significantly above the Basel III guidelines as set out by the Central Bank of Sri Lanka. The capital raised also resulted in ROE declining to 16.1%, while ROA was at 1.6% for the period.

All group companies contributed positively towards the group PBT of Rs 16.8 Bn and group PAT of Rs 11.8 Bn for the first nine months of the year.

During 2017 the Asian Banker adjudged HNB as the ‘Best Retail Bank in Sri Lanka’ for the 9th time while also recognizing it as possessing the ‘Best Micro finance Product in the Asia Pacific Region’. The ‘Asia Money Magazine’ awarded HNB as the ‘Best Bank for SME’ and the ‘Best Bank for CSR’ in the country’. CFA Sri Lanka bestowed HNB with a ‘Bronze’ award for Investor Relations while HNB’s Annual Report was adjudged to be among the top 10 integrated reports at the CMA Sri Lanka awards 2017. HNB’s leadership in technology was also recognized with the Bank’s ATM network being awarded as the ‘Best ATM Network of the Year’ at the Lanka Pay Technnovation Awards 2017. Furthermore, HNB moved up the ranks to be No. 3 in the LMD Top 100 Companies ranking and to the second position in Business Today top 30 rankings, which places HNB as the highest ranked bank in both these rankings.

HNB is the first local Bank in Sri Lanka to receive an international rating on par with the sovereign from Moody’s Investor Services while maintaining a national long term rating of AA – (lka) from Fitch Ratings Lanka Ltd. HNB is also ranked amongst the top 1000 banks in the world by the Banker.

HNB Group records Rs 18.8 Bn in PAT for 9 months

HNB Group records a Rs 9.8 Bn PAT in first six months of 2023

HNB Group demonstrates resilience, strength and stability

HNB Group posts Rs 3.3 Bn PAT for Q1 2020

HNB Group Posts Rs 16.8 Bn PBT