Business
HNB stands strong in turbulent times
Hatton National Bank PLC posted a profit before tax of Rs 12.4 Bn and profit after tax of Rs 10.5 Bn during the nine-months which ended September 2022 while the Group recorded a profit after tax of Rs 11.6 Bn. Aruni Goonetilleke, Chairperson of HNB PLC commented that, “our performance under extremely turbulent conditions clearly demonstrates the confidence placed in us by our customers,the robustness of our business model and the focus and expertise of our team in navigating through intensified uncertainties. I wish to extend my sincere gratitude to our customers, the entire HNB team, shareholders and all other stakeholders for their continuous support and reiterate our unwavering commitment on delivering long term value”.
The interest income of the Bank grew by 86% to Rs 134.9 Bn, primarily due to an increase of over 12 percentage points in average AWPLR during the period, in line with tight monetary policy measures adopted by the Central Bank. Accordingly, the net interest income of the Bank increased by 100% YoY to Rs 71.1 Bn in the first nine months up to September 2022.The net fee income recorded a growth of 65% YoY to Rs 11.0 Bn largely due to higher trade and card income, compared to a subdued 2021. In addition, the Rupee devaluation by over 80% during the period resulted in an exceptional exchange income of Rs 16.8 Bn.
The 110% increase in total operating income to Rs 99.7 Bn was negated by the 438% increase in total impairment charge to Rs 60.3 Bn for the nine months. This included an impairment charge of Rs 41 Bn on account of the investments in foreign currency denominated government securities held by the Bank. The net stage III ratio of the Bank increased to 3.34% from 2.55% as at end of December 2021 as a result of the stressed market conditions, and the Bank recognized an impairment of Rs 19.3 Bn on account of loans and advances compared to Rs 9.9 Bn in the previous year.
HNB managed to curtail the increase in operational expenses at 27% YoY in the backdrop of a 70% YoY inflation and an 80% depreciation in the Rupee. The cost to income ratio improved to 22.9% for the nine-month period which is an improvement of 15 percentage points compared to the corresponding period of the previous year, supported by the significant growth in net income.
The Bank’s asset base expanded by 20.2% to Rs 1.6 Tn during the nine months up to September 2022 while gross loans and advances rose by 13.1% to Rs 1.1 Tn. Total deposits recorded a growth of 25.1% to Rs 1.3 Tn during the nine-month period. HNB’s local currency deposits grew by 17.3% to Rs 993 Bn while the overall balance sheet growth was partly impacted by the significant devaluation of the currency.
Bank’s Tier I capital ratio and total capital ratio stood at 11.31% and 14.36%, against the regulatory requirement of 9.50% and 13.50%, respectively. CBSL has allowed flexibility for Banks to drawdown the capital conservation buffer up to 250 bps, from the minimum stipulated requirements, considering the prevailing macro-economic challenges, The Bank has been able to maintain a strong liquidity position during the period with Statutory Liquid Asset Ratio (LAR) of 30.7% and all currency Liquidity Coverage Ratio (LCR) of 218.5% being well above regulatory minimum requirements of 20% and 90%, respectively.
Commenting on the performance, Jonathan Alles, Managing Director / Chief Executive Officer of HNB PLC. stated that “the severe economic crisis the country is faced with today, has resulted in a myriad of challenges for the entire banking sector. Foreign exchange liquidity constraints impacting our ability to support customers is a major challenge. The banking sector has continued to support customers in need by extending capital and interest moratoria since 2019. Whilst we have witnessed a notable number of customers reviving their livelihoods, there are still a large number of customers in distress, resulting in increased pressure on asset quality. Stressed income levels, high interest rates, inflation and taxes continue to aggravate the situation as it hinders the repayment capacity of the customers. This has resulted in the need to make higher provisions on account of loan impairment. The impairments on investments in foreign currency denominated government securities is an additional burden on capital at a time not conducive for raising fresh capital.”
Business
From Mt. Fuji to Sri Pada: Lessons from a father-son climb
by SK Samaranayake
For Daham Gunasena, reaching the summit of Mt. Fuji with his 12-year-old son was not the end of the journey but the beginning of a different kind of lesson.
Gunasena, Director – Commercial at SPAR Sri Lanka and a senior business leader, academic and Chartered Accountant, spent nearly 12 hours on August 19 climbing Japan’s highest mountain with his son, Methum. After eight hours of climbing, the pair reached the 3,776-metre summit before beginning a demanding four-hour descent to Fujinomiya 5th Station.
“The summit was only halfway,” Gunasena reflected, describing the experience as a lesson in preparation, perseverance and responsibility.
Their journey began two days earlier with a trial excursion to the 6th Station and the volcanic landscape around Mt. Hoei. The experience allowed Gunasena to assess the altitude, terrain, weather and equipment before deciding whether his son was ready for the summit attempt.
The climb itself reinforced the value of taking one step at a time. Rather than focusing on the distant summit, father and son concentrated on the next marker, the next few steps and short periods of rest.
Reaching the summit brought another lesson. After taking photographs and celebrating, they still had four hours of descent ahead of them over loose volcanic terrain.
“Reaching the top was an achievement. Returning safely was success,” Gunasena said.
The experience also prompted him to reflect on how Japan manages Mt. Fuji, including visitor education, digital information, sanitation, transport, safety and environmental protection.
Having climbed Sri Pada 12 times last year and five times so far this year, Gunasena sees opportunities to apply some of these principles in Sri Lanka without compromising the mountain’s unique pilgrimage traditions.
He suggested a comprehensive digital platform for Sri Pada providing information on weather, congestion, transport, sanitation, first aid and emergencies, while educating foreign visitors about its religious significance.
For Gunasena, however, the most enduring lesson was personal: a mountain can teach what lectures cannot—through preparation, perseverance, respect for nature and the shared experience of taking each step together.
Business
FLIR, Marlbo promote smarter industrial maintenance
Sri Lankan industries are being encouraged to adopt advanced condition monitoring technologies to detect equipment problems before they develop into costly failures, as global technology company FLIR and its local partner Marlbo Trading Company strengthen their collaboration.
The companies brought together industry professionals at a technical seminar held on August 20 at Taj Samudra, Colombo, focusing on the use of thermography and acoustic imaging to reduce unplanned downtime, improve energy efficiency and lower maintenance costs.
Organised by Marlbo under the theme “Condition Monitoring Using Thermography and Acoustic Imaging for Measurable ROI,” the seminar highlighted the growing importance of proactive and predictive maintenance in improving equipment reliability and operational efficiency.
FLIR Sales Director – Instrumentation, India, Bhaskar Lala, and APAC Condition Monitoring Specialist David Gambarte shared their expertise on the latest diagnostic technologies and their practical industrial applications.
Thermal imaging can identify abnormal heat patterns linked to electrical and mechanical faults, while acoustic imaging can detect problems that may go unnoticed during routine inspections.
The technology is particularly useful in identifying compressed-air leaks, which can cause significant energy losses and increase operating costs.
Shevon Liyanage, Engineer – Measuring Instruments at Marlbo, also shared insights into applying condition monitoring technologies in the Sri Lankan industrial environment.
Business
Lumbini Tea Valley wins intl award for Singharaja Wirytips
Lumbini Tea Valley Ceylon won an award for its Singharaja Wirytips at The Leafies: International Tea Awards held in London in 2024, marking another international recognition for the Sri Lankan tea producer.
The award comes as the company marks two decades of direct exports, with its premium and organic Ceylon teas now reaching 35 countries across six continents.
Established in 1984, Lumbini Tea Valley began its direct export drive after Chaminda Jayawardana joined the family business in 2000 alongside his father, Dayapala Jayawardana. The initiative materialised in 2006 with the company’s first direct shipment—a 15-kilogram consignment of Flowery Broken Orange Pekoe (FBOP) tea to the United States.
Since then, the company has expanded its direct-export operations, which now account for around 20% of its total manufacturing output. Following its transition to organic production, approximately half of its organic tea output is exported directly by the company.
Its key export markets include Japan, the United States, France, the Netherlands, Switzerland and Australia, with direct shipments now reaching 35 countries.
The company said its direct-export model would continue to expand amid growing international demand for traceable, single-origin Ceylon tea, with premium and organic grades at the centre of its export strategy.
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