HNB’s 3Q PAT up

The third quarter group results of Hatton National Bank (HNB) PLC recorded an impressive 25 percent growth in the post tax profit amounting to Rs. 2.65 Bn. from Rs. 2.17 Bn. in the corresponding period of 2008.

The growth was driven by the improved performance of banking activities and contributions from HNB Assurance PLC and Sithma Development (Pvt) Ltd., and Acuity Group.

The Bank’s profit after tax during the period recorded an improvement of five percent to Rs. 2.68 Bn. from Rs. 2.56 Bn. in the corresponding period of 2008.

The prudent and timely decisions taken by the Bank enabled it to maintain a healthy growth of 17 percent in net interest income despite volatile interest rates and negative growth in advances.

Exchange and commission income declined in the face of reduction in the trade business coupled with the stable exchange rates which prevailed during the period.

Non-interest expenses grew by 16 percent mainly due to the increase in staff costs and setting aside an additional provision in respect of staff retirement benefits from December, 2008 due to the Bank adopting SLAS 16 (revised 2006) on Employee Benefits. The Bank also made a substantial investment in a new IT platform and expanded the ATM network by installing 17 new machines during the past nine months to enhance customer convenience and value-added services. HNB has a network of 278 ATMs.

The Net Non Performing Asset ratio (NPA) increased to 3.67 percent from 2.27 percent in December 2008, a trend observed throughout the industry in the recent past.

This trend is expected to reverse with the recent reduction in interest rates and the revival of the economy.