HNB Group PBT tops Rs 10b
HNB Group continued its outstanding performance with Group PBT
improving to Rs10Bn in 1H 2016. The Bank's PBT for the period improved
toRs9.1 Bnby 50%while the Bank's PAT grew to Rs 6.4 Bnby 48.6%yoy.
The Bank's interest income grew by 34.5% yoyto Rs 33.5 Bn, driven
primarily by the 23% yoy growth in the loan book.
The Bank also grew its deposits by 20.8% over the last 12 months and
maintained a rupee CASA ratio of over 40% amidst theindustry-wide shift
witnessed towards higher yielding deposits in the backdrop of rising
interest rates. Accordingly the Bank grew its net interest income by
23.5% to Rs 15.9 Bn.
The net fee and commission income recorded an increase of Rs691Mn
which is a growth of 26% yoy. The improvement in card business, trade
finance as well as loan administration fees contributed towards this
impressive growth in net fee income.
HNB's relentless efforts in recoveries and continuous improvement in
underwriting standards has enabled the Bank to improve its NPA ratio
quarter on quarter. As at end of 1H 2016, the NPA ratio improved to
2.25% compared to 3.24% recorded in 1H 2015 and from 2.41% in 1Q 2016.
The Bank's operating expenses increased by 11.9% largely owing to
revisions effected through the collective agreements. However our
continuous focus on cost optimization enabled to record a cost to income
ratio of 45.2% for 1H 2016, which is nearly 300 bps lower than the
corresponding period last year.
The Bank's operating profit before VAT, NBT and corporate taxes
increased to Rs 10.8 bn, by 48.3% yoy, while the total tax charge for 1H
2016 was Rs 4.4bn. Accordingly the Bank recorded a PAT of Rs 6.4
Bnresulting in a ROA of 1.7% and a ROE of 19.4% for 1H 2016. The asset
base of the bank grew by 24.8% yoy and 9.4% during the first six months
of the year to reach Rs 793.1 Bn.
Commenting on HNB's performance, MD/CEO of HNB Jonathan Alles stated
that "we are delighted withour remarkable 1H performance which was
driven by robust growth in core banking. This exceptional performance is
attributed to the unwavering commitment of my high performance team and
I am truly grateful to each and every member of Team HNB for espousing
transformational change. Our continuous investments in developing world
class talent, adopting state of the art technology, best in class
systems and processes as well as our focus on building lasting bonds
with our customers will enable us to reach greater heights in the near
future". Mr. Alles further stated that "while thanking our loyal
customers for their continued patronage of HNB business, we hope that
the envisioned fiscal reforms and enactment of sound monetary policy
will lead to strong economic growth and stability. We at HNB remain
focused and well positioned to be a key partner in the development of
the nation through our strategic direction."
The HNB Group also recorded outstanding performance with Group PAT
growing by 54% yoy to reach Rs 7 Bn. All group companies contributed to
the performance with HNB Grameen leading the way. Group assets grew by
25.3% yoy to reach Rs. 828.9bn by end of 1H 2016.
During the first six months, HNB has been recognized by many renowned
international and local institutions for excellence in diversebusiness
and support functions. In early 2016 HNB was recognized by the
prestigious 'Asian Banker Magazine' as the 'Best Retail Bank in Sri
Lanka' for the 8thtime.
The Bank's Islamic Finance arm was bestowed upon the 'Deal of the
Year' Silver Award and the 'Entity of the Year' Bronze Award at the
Islamic Finance Forum of South Asia organized by UTO EDU Consult.