HNB will focus on core strategies to achieve goals

The Hatton National Bank (HNB) developed five core strategies in 2011 to achieve the objectives of the bank. "We will continue to focus on these strategies which include, improving service quality and operational excellence and cost optimisation," said HNB Acting CEO Jonathan Alles in an interview with Sunday Observer Business.

Alles will assume duties as CEO shortly.

Excerpts of the interview:

Q. You were quite an achiever from your school days. What is the secret of this success?

A. I have enjoyed working with teams from my early days. Team work and not personal glory has been my motto. With HNB it will be the same.

Q. How did you get into banking?

A. My family members were all career bankers and I had a few friends who were in banking at the time I joined HSBC in 1986. There were many cricketers who had played with me in school who had already joined the bank including the cricket captains of St. Peter's, Royal and St. Thomas' against whom I played when I captained St. Joseph's.

Q. You are in the hot seat at a relatively young age, take us through your career?

A. I started my career at HSBC and I believe I was the first non-executive official to be cross posted on an overseas assignment in 1990. This led to a long stint in the Middle East covering corporate banking, training, core banking and management system implementations, marketing operations and strategic planning.

In 2002, I returned to Sri Lanka and joined HNB as Assistant General Manager responsible for developing business at its Head Office branch. I left HNB in 2005 for the Middle East and spent most of the next five years at National Bank of Abu Dhabi, one of the largest banks in the Middle East. I rejoined HNB in 2010 as its Chief Operating Officer and was re-designated as Deputy Chief Executive Officer in 2011.

Q. HNB is a premier bank in Sri Lanka, and in a fiercely competitive environment, are you happy with the bank's performance?

A. Yes. HNB has made significant progress over the past couple of decades giving leadership to many initiatives, new thinking, product and segment development and has ventured into areas where others had not. HNB's banking initiatives, Pathum Vimana deposit mobilisation program, remittances, housing, leasing product programs are unique and are ranked first or at least in the top quartile in the industry.

Q. HNB was aggressively into micro finance some time ago, but this thrust seems to have eased off somewhat?

A. Not really. Our passion and commitment to do this business is at a high, so much so that at present we are reviewing the business model and looking at ways and means to increase our penetration and to reach more people who could avail of our micro finance services.

HNB's micro finance journey commenced more than two decades ago and since then has evolved into the business it is today and in that journey has served thousands of customers and has changed many lives and continues to give hope to those who dare to dream of a better tomorrow.

Q. What are the core areas of HNB's deposit mobilisation?

A. HNB's Pathum Vimana savings mobilisation scheme must rank as one of the finest brands in the financial services industry.

Complimenting this savings product is a suite of minor savings products, Singithi Kiri Ketiyo, Singithi Lama, 'HNB Teen'. For those who are interested in attractive interest rates rather than a gift scheme, the HNB Capital Savings product and Money Market savings are good solutions.

In addition to the usual term deposit offered at high interest rates. HNB provides attractive interest rates on its foreign currency deposits to support our migrant workers and promotes savings instead of permitting their inward remittances to be used for consumption purposes only.

The HNB Current Account, provides internet and mobile banking, ATM facilities along with a shopping card to make payments at merchant outlets.

Q. There has been some concern over the bank's asset quality in light of the relatively higher NPL ratio and provision coverage can you elaborate?

A. Over the years HNB has witnessed a significant reduction in its NPL ratio recording an all time low of 3.32 as at December 31, 2012. Our branches and Regional Offices proactively and meticulously follow up on their recoveries to ensure no new loans get to the non performing section while at the head office a team is focused in expediting action on some of the hardcore loans.

Q. What is HNB's market share in terms of deposits and lending?

A. Despite the state sector banks enjoying a major share of the market and severe competition within the banking industry with 24 licensed commercial banks and nine specialised banks, HNB being a premier private sector commercial bank, enjoys approximately 10% market share in terms of advances and deposits.

Q. The bank is quite strong in foreign currency deposits, how has this been possible?

A. HNB's overseas correspondent banks and agent network with HNB's own staff deployed overseas constantly provide the convenience and know-how for our migrant workers to remit funds expeditiously to accounts at HNB.

We continue to seek ways and means to enhance this business using a superior technology platform and have plans to advance this technology further.

In addition, the excellent service provided in Sri Lanka to the beneficiaries of these remittances along with various other ancillary services made available to them through flagship products such as Adishtana, has enabled the bank to grow its foreign currency deposits further.

Q. HNB has won many awards in the recent past. How important are these awards?

A. The HNB is focused when providing value to all its stakeholders. It strongly believes in long term relationships, strategic collaborations and sustainable development and profitability. In this journey HNB is pleased with the awards it receives along the way. Winning the award for 'Best Retail Bank in Sri Lanka' for the past six years awarded by 'The Asian Banker' and 'Bank of the Year 2012' in Sri Lanka by the prestigious UK based ' The Banker' Magazine has motivated the Hatna family to continuously strive to be the best.

Q. The HNB as part of its strategy has focused on the SME and retail sector, but these are the sectors most vulnerable to the economic environment?

A. HNB is a retail bank and has great reach with its 250 customer centres and with its ATM network, internet and mobile banking channels HNB reached Sri Lankans far and wide. Similar to micro finance, doing SME business is also a passion and of great importance to HNB. The SME is the engine of growth of the country and as such HNB is firmly committed to support and develop this segment.

With the new SME products and regional SME cells, we serve this segment better and have grown our book significantly over the past couple of years.

As validated by the awards, accolades received, HNB's retail product program is unrivalled. With its flagship PathumVimana, Gami Pubuduwa programs and leadership in the housing and leasing segments along with personal financial services addressing diverse customer needs, to cater to a wider market effectively.

HNB's Club and Crystal Circle is a unique proposition of affluent banking combined with high value added and professional service.

Q. With Sri Lanka's migration to a middle income country, it no longer qualifies for concessional aid. What are the funding options available, specially for development?

A. Sri Lanka's domestic savings could only support moderate growth. To aspire and achieve the challenging goals set for GDP growth, per capita and tourist arrivals some level of international funding support is necessary. Ideally this should be in the form of FDIs and soft loans.

While the preference would be to keep commercial loans at the lowest levels, if they are well negotiated and employed productively to add value to the economy and are revenue generating, a reasonable quantum of commercial debt can be accommodated.

Q. While you settle down to a long innings at HNB what plans do you have for the bank?

A. In 2011, the Bank developed five core strategies to achieve the main goals and objectives of the Bank. We will continue to focus on these strategies which include, improving service quality and operational excellence and cost optimisation being the most important.

We will also endeavour to grow our balance sheet within acceptable risk parameters while striving to improve profitability. This growth will be fuelled by the advancements to be made to improve HNB sales culture. Our key focus would be to harness the potential in the economic resurgence of Sri Lanka.

Finally our DNA, is our team, the Hatna family. The local and international recognition which includes, being recognised by the prestigious 'The Banker' magazine as the 'Bank of the Year 2012' and being awarded as the 'Best Retail Bank in Sri Lanka' by 'The Asian Banker' for the sixth consecutive year have been largely due to the dedication and commitment of our staff and going forward, we will further develop our team to reach greater heights.