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HNB reports Rs 12.2 bn PAT for the first nine months

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Continues its support for business revival through debt moratoria and disbursements

A resilient business model and continued focus on sustainable growth was reaffirmed as Hatton National Bank PLC (HNB) reported Rs 12.2Bn in Profit After Tax (PAT) for the nine-month period ended September 2021. HNB Group recorded Rs 13.4Bn in PAT for the period.

The loan book recorded a sound growth of 15% during the past 12 months with an increase of Rs 118Bn. The Prime Lending Rate (PLR) picked up following the upward revision in policy rates in August 2021. However, the average PLR between January to September this year was approx. 300 bps lower than the average rate which prevailed in the corresponding period of 2020. As a result, Interest Income for the nine months declined by 8.9% YoY to Rs 72.5Bn.

Similar trend in average cost of deposits combined with zealous focus on CASA which grew by Rs 52.9Bn to Rs 436.6Bn as of September led to interest expenses being lower by 19.3% YoY to Rs 37Bn. Resulting Net Interest Income exhibited a 5.2% growth to Rs 35.6Bn. The CASA mobilization efforts also facilitated total deposit growth just under 15% YoY over 12 months since September 2020.

Aruni Goonetilleke, Chairperson of HNB commented that “I am pleased to note that HNB has continued to display resolve and stability within a context of rapidly changing macro dynamics. I wish to place on record my sincere gratitude to our loyal customers for their continuing patronage, every member of Team HNB for their commitment and dedication in navigating through multiple challenges and all our stakeholders for their continuing support and trust.”

“As Sri Lanka enters a path of recovery, we believe that necessary measures are being taken to address macro concerns, create stability and a conducive environment for the banking sector to optimize their support to sustainable economic growth. HNB remains very committed to supporting our clients and to the development agenda of the Country”.

Despite periodic disruptions to business activity in 2021 owing to lockdowns, the Bank was able to grow Fee and Commission income by 22.8% YoY to Rs 6.7Bn. Cards and Trade Business demonstrated strong growth along with digital channel driven fees and commissions.

The depreciation of the Rupee relative to last year resulted in net exchange gains, largely stemming from on balance sheet positions and FCBU earning revaluations, increasing by Rs 2.8Bn over the corresponding period, a substantial portion of which is reflected in ‘Other Operating Income’.

Consistent focus on credit quality enabled HNB to improve its Gross NPA ratio to 3.92% by September 2021 compared to 4.31% as at end Dec 2020. Stage III loans as a percentage of total loans also improved by 43 bps over nine months to 2.97%. The Bank made an impairment of Rs 11.2Bn for the nine months, including a significant management overlay, considering the uncertainties stemming from the COVID 19 pandemic. The impairment charge also included an additional provision due to the sovereign downgrade by Moody’s from Caa1 to Caa2. Accordingly, the Stage III Provision coverage ratio improved from 48.4% in December to 54.2% by September 2021.

Commenting on HNB’s performance MD/CEO Jonathan Alles stated that “the banking sector of Sri Lanka has demonstrated resilience over a prolonged period of extreme uncertainty. As a domestic systemically important bank, HNB has been in the forefront recording superior asset quality, capital and liquidity levels while delivering sound and sustainable returns.”

“The pandemic has also proven the need to be agile and future ready. Our continuous focus on business transformation has been a key factor which has enabled us to stay ahead. During the year we have enhanced the capabilities of our digital platforms and this would continue to be a key focus area as we proceed our journey to enhance value delivered to all our stakeholders”.

Alles further stated that “since the Easter Sunday attacks in 2019 we have continued to support our customers through debt moratoria, and extended concessionary rate financing and grants. Despite the impact of lockdowns, we are pleased to note that majority of our customers have shown signs of recovery. With economic activity returning to near normalcy, we hope that most of the sectors would be operating close to capacity levels and customers would commence repayment to reduce their debt burden. This would in turn enable us to focus on more needy sectors of the economy”.

The Bank’s Cost to Income ratio improved by over 225 bps to 37.84% although Operating Expenses rose by 7.8% YoY to Rs 18Bn due to total Operating Income exhibiting strong growth of 14.2% to Rs 47.5Bn.

Profit Before taxes (PBT) rose by 43% YoY to Rs 14.7Bn. The total effective tax rate reduced from 40.84% for the Nine months ending 2020 to 33.17% as 24% in lieu of 28% was applicable as the Corporate Tax rate for the current period as well as for the deferred tax component. The resulting PAT of Rs 12.2Bn generated a ROA of 1.23%.

Strong growth in the third quarter fueled nine-month gross loan growth of 10.7% to Rs 901.7Bn. HNB also continues to be a preferred Bank for clients with Rs 52.9Bn CASA mobilized during the period, which boosted the deposit base by 9.5% to Rs 1.06 Trillion. The CASA ratio improved by over 150 bps since December 2020 to 41.2%. Total assets expanded by 4.7% to Rs 1.35 Trillion. Tier I Capital Adequacy ratio remained strong at 14.43% against the regulatory requirement of 8.50%, while the Total Capital Adequacy ratio improved further in 2020 to 18.22% due to the Rs 7Bn Basel III compliant debenture issue in the third quarter.

HNB Group Companies were also profitable during the nine-month period, complementing the Group PBT and PAT of Rs 16.4Bn and 13.4Bn respectively while profit attributable to the shareholders rose to Rs 13Bn. Group assets grew by 4.6% since 2020 to Rs 1.43 Trillion by end September 2021.

HNB is rated AA- (lka) by Fitch Ratings and has been ranked among the Top 1000 Banks in the World over five consecutive years by the acclaimed UK based “The Banker Magazine”. HNB was once again reco.



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Priority areas for deepening Japan-SL economic ties

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Executive Committee for the Year 2026/2027

Japan Business Council (SLJBC) of The Ceylon Chamber of Commerce recently held its 47th AGM, with the Ambassador of Japan and the Patron of the Council, Akio ISOMATA, attending as the Chief Guest.

Addressing the gathering, Ambassador ISOMATA outlined three priorities for deepening bilateral economic relations: an effective and forward-looking trade and investment policy, the promotion of domestic industrial policy, and expanded investment in renewable energy. He noted that Sri Lanka’s ongoing review of its Free Trade Agreement policy would be important in shaping the country’s future negotiating landscape. He encouraged Sri Lanka to look Eastward toward Southeast Asia and Japan, proposing that the country adopt an export-oriented industrial model. The Ambassador welcomed the Government’s National Export Development Plan 2026 and National Mineral Policy 2026 as consistent with Japan’s vision of connecting Sri Lanka’s export-related manufacturing sectors with India’s high-growth manufacturing base.

In his address, President Athulla R F Edirisinghe reflected on nearly seven decades of humanitarian and development support extended by Japan to Sri Lanka, and paid tribute to the Chairman of the Sasakawa Peace Foundation Yohei Sasakawa, for his magnanimity in establishing the Foundation. Reflecting on the history of Japanese investment in the region from the 1970s onward, he observed that Sri Lanka had missed many opportunities to attract Japanese foreign direct investment. Highlighting the 2025 proposal for a Sri Lanka – Japan Economic Corridor by the Ministry of Economy, Trade, and Industry Japan, he called on Sri Lankan businesses, industry associations, and the wider community to come together in dialogue with the Government to ensure the country does not miss this opportunity as well.

2026/27 Committee: President: Athulla R F Edirisinghe – Director, Hirohama Ceylon (Pvt) Ltd, Senior Vice President – Ruwan Waidyaratne – Managing Director, Hayleys Advantis Ltd, Vice – President – Shamil Mendis – Managing Director, Spear International (Pvt) Ltd, Treasurer – Rohitha Mendis – Managing Director of Prudential Shipping Lines (Pte) Ltd, Immediate Past President – Mahen Kariyawasan – Managing Director, Andrew The Travel Company (Pvt) Ltd, representatives from Amano Lanka Engineering (Pvt) Ltd, BOV Capital (Pvt) Ltd, Brandix Apparel (Pvt) Ltd, Heritage Teas (Pvt) Ltd, Kalhari Enterprises (Pvt) Ltd, Lanka Harness (Pvt) Ltd, Dentsu Grant (Pvt) Ltd, MAC Holdings (Pvt) Ltd, and Vidullanka PLC. By invitation: HVA Foods PLC (subsidiary of George Steuart & Co), Spillburg Holdings (Pvt) Ltd, and Vaughan Chemicals (Pvt) Ltd.

The Sri Lanka – Japan Business Council plays an important role in promoting trade, tourism, and investments between Japan and Sri Lanka. For membership inquiries contact Kiyara at The Ceylon Chamber of Commerce via E-mail: businesscouncils1@chamber.lk or Tel.: 011 5588875/ 5588800.

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Rekawa turns turtle conservation into a 30-year community business model

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Stakeholders at 30th anniversary celebrations of the turtle conservation project.

By Ifham Nizam

What started 30 years ago as an effort to protect sea turtles has evolved into a community-based economic model that has generated livelihoods, attracted tourists and transformed Rekawa into one of Sri Lanka’s best-known nature tourism destinations.

The Rekawa Turtle Conservation Project, launched on September 2, 1996, by the Turtle Conservation Project (TCP) in partnership with the Department of Wildlife Conservation and the Rekawa community, marked its 30th anniversary last week, demonstrating how biodiversity protection can become an economic opportunity for communities living alongside sensitive natural resources.

Speaking at the anniversary celebrations, TCP chairman Thushan Kapurusinghe said the project currently provides direct livelihoods for 28 people, but its economic impact extends considerably beyond those directly employed by the programme.

‘Today, 28 people directly earn their livelihood through this project. But its impact goes far beyond those 28 individuals, Kapurusinghe said.

He pointed to the transformation of the area over the past three decades, arguing that the growth of tourism in the community has been closely linked to the turtle conservation programme.

‘If you travel from Netolpitiya to this area, you can clearly see how much the village has transformed over the years. There is no doubt that the growth of tourism in this community has been driven by the Turtle Conservation Project, he said.

The economic significance of Rekawa lies in its ability to convert the protection of a natural asset into a source of recurring community income.

Tourists do not come to Rekawa merely to see a beach. They come to witness sea turtles emerging from the ocean and nesting in their natural habitat—a tourism experience that depends directly on the continued protection of the nesting beach.

Kapurusinghe said tour operators regularly bring visitors to Rekawa, with some tourists traveling there after visiting major attractions such as the Kandy Esala Perahera.

The model represents a fundamental shift from viewing conservation as an expense to recognising biodiversity as an economic asset that can generate sustainable livelihoods when properly managed.

The 30th anniversary celebration at the Rekawa Turtle Conservation Project Information Centre brought together Southern Wildlife Region Director of the Department of Wildlife Conservation Channa Suraweera, government officials, conservation organisations, community representatives and long-standing supporters of the initiative.

Individuals who had contributed to the project over the past three decades were also recognised with awards for their service to sea turtle and environmental conservation.

Rekawa’s experience has attracted international attention because of precisely this combination of conservation and community development. The project has received international recognition as well as the Green Employment Award from the Ministry of Environment and Natural Resources. Earlier international recognition included a highly commended ‘Tourism for Tomorrow’ award, while the project’s turtle-watch programme subsequently received further recognition in responsible tourism and conservation.

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Ceylinco Life brings premium policyholders closer to the magic of the Kandy Perahera

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For an evening, the timeless spectacle of the Kandy Esala Perahera unfolded at especially close quarters for a select group of Ceylinco Life’s most valued policyholders and their families, who were hosted to an exclusive viewing experience by the Company’s Customer Relations Division.

Held at the Ceylinco Life Kandy Branch on Kings Street, the annual event coincided with the second Randoli Perahera, bringing guests into the heart of one of Sri Lanka’s most spectacular expressions of culture, tradition and pageantry.

As the procession made its majestic passage through the streets of Kandy, guests enjoyed VIP seating at a prime vantage point, allowing them to experience the colour, movement and grandeur of the Perahera up close. The evening offered a fitting setting for Ceylinco Life to celebrate its enduring relationships with its premium clientele.

The experience extended well beyond the spectacle outside. Guests were welcomed with evening refreshments and an exclusive dinner buffet presented by the prestigious Amaya Hills Resort, adding a fine-dining dimension to an already memorable evening.

Families, too, were at the centre of the occasion. A private movie theatre experience provided entertainment for children and adults alike, while each attending family received a beautifully framed family photograph as a personalised souvenir, a tangible reminder of an evening shared together against the backdrop of one of Sri Lanka’s most treasured cultural traditions.

Besides being a much sought-after opportunity to watch the Perahera, the occasion was an expression of appreciation. Through its continuing Customer Relationship Management activities, Ceylinco Life seeks to create experiences that recognise its most valued policyholders not simply as customers, but as relationships to be celebrated and nurtured. And on this particular August evening, the enduring splendour of the Kandy Perahera provided the perfect setting for doing just that.

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