HNB posts 15 percent growth

Dr Ranee Jayamaha

Hatton National Bank PLC (HNB) recorded Rs 5.34 billion in post-tax profits, a 15% growth, during the nine months ended September 2013, compared to Rs 4.63 billion during the corresponding period in 2012, while Group post-tax profits improved by 17% to Rs 5.84 billion compared to the corresponding period in 2012.

Interest income of the Bank grew by 24% to Rs 42.05 billion compared to the nine months ended September 2012 due to a 14% Year-on-Year (YoY) expansion in its loan book while interest expense recorded an increase of 31% from Rs 17.98 billion to Rs 23.49 billion largely on account of the YoY growth in its deposit base by 11% and increased average interest cost with the shift towards high yielding deposits.

The Net interest income of the Bank grew 17% from Rs 15.91 billion in the nine months ended September 2012 to Rs 18.55 billion in the nine months ended September 2013.

HNB Chairperson, Dr Ranee Jayamaha said, "Despite sluggish market conditions that prevailed during the year, the Bank was successful in recording an impressive growth in NII notwithstanding a drop in net interest margins." Net fee and commission income of the Bank increased to Rs 3.14 billion a growth of 15%, driven by higher credit card volumes and guarantee commissions, despite slow-down in foreign trade compared to 2012.

Net losses from trading which mainly represented the revaluation of off-balance sheet swap position taken to hedge the on- balance sheet open positions created by some of the foreign borrowings over the past 20 months increased to Rs 988 million compared to Rs 649 million for the corresponding period of 2012.

The Bank recorded a 43% growth under net gain/loss from financial investments due to higher dividends received from the Bank's equity investments during the nine months ended September 2013 compared to the previous year. Overall, the Bank recorded a 12% growth in its total operating income as at end of Q3 2013.