Hatton National Bank PLC posted a profit after tax of Rs 8.0 Bn for the nine month period ended September 2019 while the Group recorded a PAT of Rs 8.7Bn for the same period.
The third quarter of 2019 saw HNBHNB’s profits improving to Rs 3.2 billion compared to the previous quarters while the Group PAT for the quarter was Rs 3.6 billion.
Sluggish economic growth, exacerbated by the prevailing uncertainty continued to impact the banking industry and affect demand for credit. The focus on CASA deposits enabled HNB to grow its CASA base to Rs 70 billion resulting in a 11% YoY growth in Net Interest Income over the corresponding nine month period ended September 2018.
The fee income for the nine months contracted marginally compared to the previous year.
The decrease in income from trade finance was a key reason as the country saw a slowdown in import volumes during the year mainly due to lower vehicle imports.
The low economic activity and the absence of development projects, resulted in guarantee and loan fees declining as well.
Chairman of HNB Dinesh Weerakkody, said, “The economy has been struggling following the unfortunate events of 21st April 2019 that resulted in many industries being negatively impacted directly and indirectly and that includes the financial services Sector.
However, micro and macro indicators have gradually improved since then. Therefore we remain bullish that the economy will gradually regain its lost momentum”.
Managing Director /CEO of HNB PLC Jonathan Alles commenting upon the Bank’s performance stated that “The economy and country is currently at a crucial juncture and we are confident of the future prospects post Presidential Election. It is imperative that conducive policies are implemented and the Executive and the Legislature work in tandem to ensure long term sustainability of our economy.”
“The interest margins of the Sector are under pressure and stressed market conditions along with new IFRS 9 Accounting Standard have resulted in higher impairment charges hampering internal capital generation of the sector.
In this backdrop, imposing higher taxes on the banking sector is counter- productive for the development of the Nation as the banks would be restricted in on- lending to stimulate economic growth.”
Alles added that, “notwithstanding external conditions, HNB is forging ahead with its ambitious transformational journey to ensure future readiness. While the programme is centered around Systems, Processes and People, ensuring business sustainability has been a key priority.
“The success of the proactive initiatives implemented by the Bank is evident by the fact that HNB has been able to contain its NPAs in the last two quarters despite the Sector experiencing further deterioration due to prevailing adverse market conditions”.
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