Hatton National Bank PLC (HNB) reported Profit After Taxes (PAT) of Rs. 7.7 bn for the first nine months of 2020, while the Group recorded a PAT for Rs. 8.8Bn for the same period.
Commenting on the performance, Dinesh Weerakkody, Chairman of HNB stated that “Despite the significant challenges brought about by the pandemic, HNB continued to demonstrate strength, stability and resilience. In this backdrop, I’m happy to note that HNB was able to conclude a long term loan agreement of USD 60Mn with the French Development Financing Institution, Proparco to support the SME sector of Sri Lanka”.
The impact of COVID-19 continued to hamper the Net Fee and Commission income which declined by 18.9% YoY to Rs. 5.4 Bn as a result of the restrictions placed on imports, low volume of foreign card transactions, removal of certain charges as part of CBSL initiated COVID relief scheme and low level of economic activity etc.
Jonathan Alles, Managing Director / CEO of HNB stated that “our country was moving in a positive trajectory over the last few months, until the second wave struck us, however, this has been a common phenomenon across the world.”
“As of September, HNB has provided moratoriums to over 85,000 customers and processed working capital finance amounting to over Rs. 24Bn to COVID affected businesses under the CBSL Saubhagya schemes.” The NPA ratio of the Bank increased to 6.51% compared to 5.91% as at end of December 2019 and 6.4% as at 30th June 2020.
The Bank’s focus on optimizing costs under challenging conditions, enabled a Rs. 1.3Bn decline in Operating expenses with cost to income ratio maintained at 40%, similar to the levels recorded in September 2019. The removal of Nations Building Tax and Debt Repayment Levy proved to be extremely vital to maintain the stability of the banking sector, especially in the current context. Accordingly, the Profit After Tax (PAT) of Rs. 7.7 Bn represented a drop of 3.8% YoY.
Gross loans grew marginally by Rs. 11.9Bn to Rs. 783.9Bn, in the backdrop of low demand for credit, while the deposit base grew by an impressive Rs. 112.4Bn recording a growth of 13.9% during the year 2020.
The Group’s Insurance and Investment Banking businesses performed admirably as the HNB Group made PBT of Rs. 12 Bn during the first nine months, which is a 18% YoY drop while Group PAT increased by a marginal 1.2% YoY to Rs. 8.8 Bn.
Group level assets rose by Rs. 128 Bn since the end of last year, a 10.7% growth to Rs. 1.3 Trillion.
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