HNB recorded a Profit After Tax (PAT) of Rs 4.7 bn during the first quarter of 2021 while Profit Before income Tax (PBT) amounted to Rs 5.5 billion(bn). At Group level PBT and PAT were at Rs 5.9 bn and Rs 4.8 bn respectively.
The substantial monetary loosening adopted to revive the pandemic hit economy resulted in AWPLR dropping by nearly 400 bps over the past 12 months. This resulted in the interest income decreasing by 13% YoY to Rs 23.7 bn. Interest expenses too exhibited a decline of 17.2% YoY to Rs 13.1 bn driven by strong CASA (current accounts and savings accounts) mobilization.
Managing Director, CEO of HNB Jonathan Alles stated: “HNB has demonstrated resilience, strength and stability during a year of unprecedented disruption. We provided moratoria under three phases while granting working capital finance out of CBSL schemes and our own funds. In addition to the financial assistance provided during the last year, we enhanced our digital proposition to ensure that customers could securely and reliably access all of our services while staying safe from the pandemic.” Net Fee and Commission income for the first quarter grew by 10.2% YoY to Rs 2.3 Bn as business activity rebounded during the period. The Bank recorded a net exchange gain of Rs 1.9 bn which was a 53% YoY improvement compared to Q1 2020. The total dividend income from investments for Q1 2021 was Rs 421 million(mn) compared to Rs 13 mn in the corresponding period of 2020.
NPA ratio of the Bank improved marginally to 4.28% as at end of Q1 2021 compared to 4.31% as at end December 2020, as majority of customers who were previously under moratorium commenced repayments since October 2020.
“More than a year after the pandemic, it is unfortunate that we are now seeing the most severe rise in COVID-19 cases to date. While progress has been made in terms of vaccinations, the economic impact of this latest wave of COVID-19 infections will hinge on how effectively we as a nation are able to rally together to control the spread of the virus.
In this crucial moment, we will continue to support our valued customers and play a meaningful role as an essential service provider. We have already enabled all our digital channels, and are also fully geared to support business revival and help rebuild our nation.”
“We request the public to remain calm, adhering to all health and safety guidelines. We also urge the authorities to expand the vaccination programme and in particular seek their support to make vaccination a priority for front line and critical staff across the banking industry,” Alles stated.
The zealous focus on cost optimization facilitated a marginal 1% YoY dip in Operating costs to Rs 5.8 bn. Cost to Income was hence improved by a commendable 170 bps relative to the comparative period in 2020 to 38% for Q1 2021. Profit Before Taxes (PBT) amounted to Rs. 5.5 bn and was subjected to the reduced income tax charge of 24% in comparison to the 28% tax charge that was applicable previously. Accordingly, the profit after tax for the Bank improved to Rs 4.7 bn by 78% during Q1 2021.
The Bank’s assets crossed Rs 1.3 trillion as at quarter end with the gross loan book at Rs 808.3 bn. Total deposits grew to Rs 996.1 bn recording an impressive Rs 155 bn growth (18.4% YoY) over the 12month period since March 2020. As one of the best capitalized banks in the industry, Bank reported Tier I and Total Capital Adequacy Ratios of 14.82% and 17.88% respectively.HNB Group recorded a PBT of Rs 5.9 bn and a PAT of Rs 4.8 bn for the quarter ended March 2021 recording a growth of 35.7% YoY and 46.7% YoY respectively. Total assets of the Group increased to Rs 1,388 bn as at March 31, 2021.
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