HNB records 37% growth in PAT

In the backdrop of a slowdown in economic growth resulting in reduced credit growth and volatile market conditions, the pre-tax profit of HNB Group improved by 25.5% to Rs 10.65 billion while Group net profit after tax recorded a year on year growth of 32.4% to Rs 8.25 billion.

 

Dr. Ranee Jayamaha

Rajandra Theagarajah

Commenting on the performance during the year 2012, Dr. Ranee Jayamaha, Chairperson of HNB PLC said “ In the first half of the year, amidst difficulties and challenges brought by the severe and complex international environment and despite volatile domestic markets, Hatton National Bank improved its operating strategies whilst retaining a healthy growth. In the second half, the bank proactively adapted itself to policy changes as well as financial market conditions and moved forward to seize opportunities in the real economy.”

With the new accounting standards (SLFRS / LKAS) issued in line with the International Financial Reporting Standards becoming effective from January 1, 2012 the bank prepared its annual financial statements in line with the new standards as well as the guidelines issued by the Central Bank of Sri Lanka. However, in accordance with the second option under the ruling issued by the Institute of Chartered Accountants of Sri Lanka, the interim financial statements have been prepared based on the previous accounting standards that prevailed prior to January 1, 2012 for comparative purposes and the following is based on these previous accounting standards.

The bank's interest income for the reporting period grew by 42.2%, prompted by increase in yields coupled with growth in interest earning assets. Interest cost mirrored this upward movement with a perceptible increase of 58.8%. Higher deposit rates, deposit growth as well as conversion of low cost deposits to fixed deposits at higher rates pushed the interest costs upwards. Nevertheless, the bank witnessed a growth of 25.3% in net interest income amounting to Rs. 20.5 billion during the financial year.

Increase in fee income remained a key strategic priority during the year, as per the bank's 3 year strategic plan. Efforts in this regard yielded positive results with the Bank increasing its commission income by 36.5% in 2012 against that of the previous financial year.

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