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| Sunday, 7 August 2005 |
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| News Business Features Editorial
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HNB Group pre-tax profits up 40% to Rs. 807m in 1H Hatton National Bank (HNB), Sri Lanka's largest private sector commercial bank, continues its impressive comeback by recording a 22% rise in pre-tax profits to Rs 676 million in the six months to June 2005. Commenting on the performance, HNB's Director/ Chief Executive Officer Rajendra Theagarajah said " We are extremely satisfied with the consistency in which two successive quarters have recorded such exceptional performance. The strategic redirection of the bank in balancing business growth with profitability, improving productivity, managing costs, and focusing on enhanced asset quality has been taken to heart by staff at all levels within the bank which has seen the entire network working towards these goals". Net interest generated from interest sensitive assets has increased by 31%. The first half of the year 2005 has also seen the bank's total operating expenses entirely covered by Net interest income from Core banking activities. Net Income of the bank which includes foreign exchange income, commission income and investment income in addition to net interest income, grew by 14% during these six months. HNB has maintained its tight leash on costs with operating expenses increasing by a mere 8% during the period. Improved procurement procedures, advantage of economies of scale and pooling of common processes are some factors that have contributed towards effective cost management in the bank. The 22% rise in profits has been achieved with an asset growth of just 4% during the first half of 2005. Effective balance sheet management coupled with controlled growth has contributed towards improved return and productivity of the bank's asset base. The bank's commitments and contingencies has also shown a 26% drop. HNB continues its quest to improve its asset quality. The bank's loan quality has shown steady improvement with two key performance indicators namely the NPA ratio and NPA cover having improved to 9% and 62% respectively in June 2005. The Group too has delivered exceptional results with the Pre Tax profits recording a 40% increase during the first six months of 2005 to Rs. 807 million. Notable performances by HNB Securities Ltd and HNB Stockbrokers Ltd. contributed to the overall Group net profit after taxation of Rs. 648 million during the period. |
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