HNB reiterates commitment to support grassroot-led economic revival

A resilient business model and continued focus on sustainable growth was reaffirmed as Hatton National Bank PLC (HNB) reported Rs.12.2 billion in Profit After Tax (PAT) for the 9-month period ended September 2021. HNB Group recorded Rs.13.4 billion in PAT for the same period.

The loan book recorded a sound growth of 15 percent 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 around 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 percent YoY to Rs. 72.5 billion, the bank said in a media release.

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 percent YoY to Rs. 37 billion.

Ms. Aruni Goonetilleke, Chairperson of HNB, said: “I am pleased to note that HNB has continued to display resolve and stability within a context of rapidly changing macro dynamics. As Sri Lanka enters a path of recovery, we believe that necessary measures are being taken to address macro concerns, create stability and a conducive environment for the banking sector to optimize their support to sustainable economic growth. HNB remains very committed to supporting our clients and to the development agenda of the country”.

Commenting on HNB’s performance MD/CEO Jonathan Alles stated that, “The pandemic has proven the need to be agile and future ready. Our continuous focus on business transformation has been a key factor which has enabled us to stay ahead. During the year we have enhanced the capabilities of our digital platforms and this would continue to be a key focus area as we proceed on our journey to enhance value delivered to all our stakeholders.”

Profit Before taxes (PBT) rose by 43 percent YoY to Rs. 14.7 billion. The total effective tax rate reduced from 40.84 percent for the nine months ending 2020 to 33.17 percent as 24 percent in lieu of 28 percent was applicable as the Corporate Tax rate for the current period as well as for the deferred tax component. The resulting PAT of Rs. 12.2 billion generated a ROA of 1.23 percent