Sri Lanka’s condominium boom targeting the middle income sector will continue into the future and the Hatton National Bank will keep on lending to this sector, Hatton National Bank Managing Director and CEO Jonathan Alles said.
Speaking at the Bank’s Investor Forum Alles said that condominiums priced between Rs. 30 to 50 million are selling well and this trend will continue. “I am sure that in the same way there is even a bigger opportunity in the lower segment where a unit can be priced around Rs. 20 million. If an investor cuts costs and come out with a project of this nature it would be really profitable.”
He however said that he sees the mega and overpriced condominiums as a risky business to the future.The bank’s housing portfolio grew by 15% last year and the target for this year is 20%.
Alles said that the bank is very careful when it comes to lending.
“Unfortunately the regulations and the legal system in place for recovery is very weak and it takes a long period of time for recoveries. Due to this, the banks are careful when it comes to strong lending.We also have a very strong recovery branch.”
“I must also say that today the co-laterals that are brought forward are not as strong as they were before and this has prompted us to have a many tiers when processing an advance.”
Though a bigger bank will be able to absorb a shock due to a ‘loan going wrong’a rural branch will bleed. “So we are extra careful,”Alles said.
He also said that the lending portfolio would be around 15% to 18% and it was 20% a few years ago.
The deposit growth of 18.3% during the year outperformed the 16.5% growth in
the industry to achieve Rs 623.5 billion. HNB emerged as the most profitable private sector banking group achieving Rs 22.5 billion in Group profit before tax and posted the best financial results in its history.
“Our digital drive towards becoming the most future ready bank also contributed immensely towards this great success” .
Group’s Assets surpassed Rs 900 billion representing yet another historical milestone for HNB while Group PAT was at Rs 15.67 billion, Chief Operating Officer Dilshan Rodrigo said.
0 comments: