HNB Group records Rs 16.2 Bn in PAT for 6 months

Hatton National Bank PLC posted a profit before tax of Rs 25.8 Bn and a profit after tax of Rs 15.4 Bn during the six months ended June 2024. The Group recorded a consolidated PBT and PAT of Rs 27.0 Bn and Rs 16.2 Bn, respectively for the period.

Commenting on the performance Chairman Nihal Jayawardene stated that “Sri Lanka has come a long way since the devastating economic crisis, and has taken steady steps towards stabilization. While uncertainties and challenges prevail, we reiterate our commitment to deliver sustainable growth for all our stakeholders”.

The Bank’s interest income recorded a YoY decline of 24.2% during the first six months, owing to the sharp drop in AWPLR by over 10 percentage points from 19.47% to 8.78% over the 12-month period up to 30th June 2024, in line with CBSL’s expansionary monetary policy. Interest expense declined at a similar pace, resulting in a 23.1% YoY drop in net interest income to Rs 45.6 Bn. Bank’s fee and commission income grew by 5.5% YoY to Rs 8.6 Bn primarily fueled by card and digital channel transactions. While the foreign exchange transactions were encouraging, the marginal appreciation of the Sri Lankan rupee against the US dollar during the period resulted in the Bank having to record an exchange loss of Rs 1.3 Bn for the six months.

Reducing interest rates and improvement in economic activity as well as the proactive actions taken by the Bank facilitated rehabilitation of stressed borrowers. While this led to an improvement in collections and recovery, impairment on account of investments in International Sovereign Bonds (ISBs), reduced significantly, as the Bank maintained its provision cover on ISBs since December 2023. As a result, the total impairment charge was Rs 1.5Bn for the 6 months ended June 2024. HNB’s asset quality remained above the industry levels, with net stage 3 ratio at 4.09% and stage 3 provision cover at 56.1%.