HNB Group records Rs. 2.29b pre-tax profit in Q1, 2012

HNB continued to post robust results in Q1 of 2012, driven by expansion in core banking operations amidst a challenging business environment with rising interest rates and depreciation of the rupee.

HNB's pre-tax profits grew by 25 percent to Rs. 2.1b while the group pre-tax profit also increased by 25 percent to Rs. 2.29b.

Chairperson of HNB PLC, Dr.RaneeJayamaha said. "Despite the challenging business environment, with tight monetary policy and restrained credit growth, HNB performed commendably during the first quarter of 2012".

Pressure on liquidity experienced by the banking industry continued in to 2012. However, HNB successfully managed to raise over Rs. 21.5b in tier I, tier II capital and long term senior debt since mid-2011 with funds totalling $ 75m raised so far in 2012 from foreign sources.

With demand for credit continuing to be high in Q1 2012, HNB cautiously expanded its loan portfolio recording a growth of 8 percent during the first three months of 2012, to reach Rs. 284b as at end of Q1 2012. The loan book grew by Rs. 62b during the 12 months up to end of March 2012 leading to a 35 percent increase in interest income from loans and advances.

The deposit base also saw an increase of 7 percent during Q1 2012 while a shift towards fixed deposits was observed due to the rising trend in interest rates.