HNB Group recorded a profit before VAT and Tax of Rs 13.4 bn for the first six months of 2017 posting a year on year (yoy) growth of 13.8% while the Group PAT increased by 7.5% to Rs 7.5 bn. The Bank posted a profit before VAT and tax of Rs 12.5 bn during the 1H of 2017 recording a growth of 15.8% yoy.
The profit before tax for the Bank grew by 10.1% yoy to Rs 10 Bn while post-tax profits grew by 11.3% to Rs 7.1 bn for the period.
The sound performance was driven by the core banking business with interest income, rising by 38.8% yoy to Rs 46.5 bn. This was supported by a 19.3% yoy growth in advances. The growth in CASA deposits to Rs 245.9 Bn in a high interest rate environment enabled HNB to maintain interest margins and record a 20.5% growth in net interest income to Rs 19.1bn. Fee and Commission income for the 1H 2017 was recorded at Rs 4.1 bn representing an increase of 21.5% over the corresponding period of 2016. Fees from the credit card business, trade finance and bank guarantees remained the key contributors towards this growth.
The net loss from trading increased to Rs 889.3 mn from a loss of Rs 523.3 mn experienced during 1H 2016. This was due to the relatively higher swap rates and the depreciation of the rupee during the period under review compared to the 1H of 2016.
As at end of 1H 2017, HNB’s NPA ratio stood at 2.2% and continued to be better than the average of 2.7% recorded by the industry. Impairment on individually significant loans increased to Rs 591.3 Mn from a reversal of Rs 31.2 Mn in the previous year, which included the impact of the recovery of few large loans in the corresponding period of 2016.
The Bank successfully contained the increase in operating expenses to 9.4% through the relentless pursuit of operational excellence initiatives over a period of time.
The return on assets (ROA) for the period stood at 1.6% while return on equity (ROE) was at 17.7% for the six months ended June 2017.
Commenting on the performance, MD/CEO of HNB Jonathan Alles stated that “HNB has continued to record stable and sustainable overall performance in the first half of 2017 and we are truly grateful to all our valued stakeholders for the continuous trust and confidence placed in us”.
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