HNB Group posts Rs 1.89 b profit
First half results outstanding:
Hatton National Bank PLC, recorded a pre tax profit of Rs 2.89
billion in H1 2010 in comparison to Rs 2.72 billion in the corresponding
period 2009 despite pressures on interest margins, while the post tax
profit of the Bank improved to Rs 1.79 billion during the six months
under review from Rs 1.77 billion in the first six months of 2009.
HNB headoffice building |
Commenting on the key contributors to growth HNB Chief Financial
Officer Ajantha de Vas Gunasekara said, “with the re-pricing of assets
and liabilities, the interest income fell by 15 percent to Rs 15.06
billion during the first six months of 2010, while a sharper decline of
29 percent was witnessed in interest expense.
“This resulted in the net interest income improving by 5 percent
during the period, and due to aggressive asset liability management, the
Bank was successful in achieving a healthy net interest margin of 6.2
percent during the period,” he said.
Non interest income recorded an increase of 20 percent to Rs 2.43
billion on account of capital gains on investments held in Commercial
Bank of Ceylon PLC and Distilleries Company of Sri Lanka PLC although
foreign exchange income dropped by 13 percent to Rs 415.8 million.
The non interest expenses during the period increased by 14 percent
largely due to the revision of salaries in 2009.
HNB Group posted a pre tax profit of Rs 3.04 billion in H1 2010 up by
13 percent compared to first 6 months in 2009 while the Group post tax
profit increased to Rs 1.89 billion from Rs 1.72 billion in June 2009
supported by the positive performance of the Group companies viz. HNB
Assurance PLC, Sithma Development and Acuity Partners.
The performance of the group in Q2 2010 was outstanding with post tax
profit recording a growth of 23 percent quarter on quarter.
The total asset base grew to Rs 286.2 billion as at end of June 2010
from Rs 280.6 billion as at end December 2009 primarily driven by the
loan growth.
The demand for credit improved on the backdrop of low interest rates
and more conducive investment climate with the gross loans and advances
reaching Rs 180.2 billion as at end of H1 2010 up by Rs 3.6 billion from
end of December 2009.
The gross non performing advances ratio stood at 6.5 percent while
the net non performing ratio was at 3.3 percent respectively as at end
of June 2010.
The Bank managed to improve the provision cover to 49 percent as at
end of H1 2010. The deposit base recorded a growth of Rs 2.6 billion to
Rs 216.5 billion over the first six months of 2010 in spite of low
deposit rates.
A shift in deposit mix towards low cost deposits was witnessed over
the period under review backed by the strong deposit brands of the Bank.
The core capital adequacy ratio and the total capital adequacy ratio
stood at 10.40 percent and 12.31 percent respectively as at June 30,
2010. |