Connect with us

Business

Stability and sustainability underpin Q1 results for HNB

Published

on

HNB recorded a Profit After Tax (PAT) of Rs 4.7 Bn during the first quarter of 2021 while Profit Before income Tax (PBT) amounted to Rs 5.5 Bn. At Group level PBT and PAT were at Rs 5.9 Bn and Rs 4.8 Bn respectively.

The substantial monetary loosening adopted to revive the pandemic hit economy resulted in AWPLR dropping by nearly 400 bps over the past 12 months. This resulted in the interest income decreasing by 13% YoY to Rs 23.7 Bn. Interest expenses too exhibited a decline of 17.2% YoY to Rs 13.1 Bn driven by strong CASA (current accounts and savings accounts) mobilization. The CASA ratio improved from 36.2% in March 2020 to 39.7% by the end of Q1 2021 as the CASA base grew by 30% YoY to Rs 395 Bn. As a result, the Bank’s Net Interest Income (NII) for the first three months 2021 decreased by 7.2% YoY to Rs 10.6 Bn.

Commenting on the Bank’s results Managing Director / CEO of HNB Jonathan Alles stated: “HNB has demonstrated resilience, strength and stability during a year of unprecedented disruption. We are grateful for the complete trust and support of our customers, investors and other stakeholders throughout this time. I also wish to place on record my deepest appreciation for the unwavering dedication of our staff in continuing to serve our clientele through multiple waves of the pandemic, despite the inherent risks involved. Our top priority during this time was to ensure their safety while supporting customers affected by the pandemic.

“We provided moratoria under three phases while granting working capital finance out of CBSL schemes and our own funds. In addition to the financial assistance provided during the last year, we enhanced our digital proposition to ensure that customers could securely and reliably access all of our services while staying safe from the pandemic. This included introducing many new features on SOLO – our digital payment platform, and the launch of our new Digital Banking App and e-commerce capabilities for SME clients among many others. We are currently in the process of further refining these powerful new services, which will undoubtedly provide greater convenience for all HNB customers in the future.”

Net Fee and Commission income for the first quarter grew by 10.2% YoY to Rs 2.3 Bn as business activity rebounded during the period. The Credit Cards business, Trade and Remittances which constitute a major share of fees performed well despite restrictions on imports continuing to be in place. Other fee sources, which also encompass digital business lines rose by 24.4% YoY.

Exchange rate volatility and movements during the period, led to substantial revaluation gains on swaps and forward agreements. Swap costs were also lower relative to the corresponding quarter of 2020 as swap premiums declined in line with Dollar interest rates. Accordingly, the Bank recorded a net exchange gain of Rs 1.9 Bn which was a 53% YoY improvement compared to Q1 2020. The total dividend income from investments for Q1 2021 was Rs 421Mn compared to Rs 13Mn in the corresponding period of 2020, as dividends declared for the financial year 2019 were paid only in Q2 2020 due to the pandemic.

NPA ratio of the Bank improved marginally to 4.28% as at end of Q1 2021 compared to 4.31% as at end December 2020, as majority of customers who were previously under moratorium commenced repayments since October 2020. The impairment charge for the quarter ended 31st March 2021 was Rs 2.7Bn in comparison to Rs 4.7Bn recorded for Q1 2020. The impairment for Q1 2020 included a charge of Rs 708Mn on account of sovereign bonds mainly as a result of the sovereign downgrade that was effected in April 2020.

“More than a year after the pandemic, it is unfortunate that we are now seeing the most severe rise in COVID-19 cases to date. All of the lessons that we have learned over the past year will be put to the test. While progress has been made in terms of vaccinations, the economic impact of this latest wave of COVID-19 infections will hinge on how effectively we as a nation are able to rally together to control the spread of the virus.

In this crucial moment, as a responsible domestic systemically important bank, as always, we will continue to support our valued customers and play a meaningful role as an essential service provider. We have already enabled all our digital channels, and are also fully geared to support business revival and help rebuild our nation. We request the public to remain calm, adhering to all health and safety guidelines provided and to act with responsibility and compassion towards one another. We also urge the authorities to expand the vaccination programme and in particular seek their support to make vaccination a priority for front line and critical staff across the banking industry,” Alles stated.

The zealous focus on cost optimization facilitated a marginal 1% YoY dip in Operating costs to Rs 5.8 Bn. Cost to Income was hence improved by a commendable 170 bps relative to the comparative period in 2020 to 38% for Q1 2021.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

CSE planning new product lines to attract investors in greater numbers

Published

on

By Lynn Ockersz

The CSE is planning to attract a greater number of investors to the stock market this year through the introduction of some new product lines. In order to increase the choice of instruments available to equity investors, the CSE intends to focus in the immediate term on instruments, such as, stock borrowing and lending and regulated short-selling, CSE CEO Rajeeva Bandaranaike said.

The latter instruments would help in generating more liquidity and trading among equity investors, not only in instances when the market is on its way up but also in a declining market as well, CEO Bandaranaike told The Island Financial Review in an exclusive interview recently.

The CEO also said that the CSE is aiming at leveraging the corporate debt market through the initiation of some new products. For example, Green Bonds, Perpetual Bonds and the facilitation of secondary trading of corporate bonds via repo trading.

Asked to indicate as to how these instruments would help the bourse going forward, Mr. Bandaranaike said that stock borrowing and lending, for instance, would facilitate and enable regulated short selling which will have the effect of increasing liquidity and trading among all categories of equity investors.

This will create opportunities for traders to make use of market volatility. Besides, investors holding long term portfolios could lend their stock and earn an interest with least effort on their part.

Asked to elaborate on the importance of Green Bonds, the CEO said that institutional investors in particular are currently focusing on ESG projects; that is, investors that are sensitive to environmental, social and governance concerns. Accordingly, the CSE would be catering to some important investor needs through the latter projects.

Meanwhile, in response to the question on how the digitization initiatives of the CSE have helped in ushering a more robust share market in Sri Lanka, CSE’s Chief Information Officer Chandrakanth Jayasinghe said it is the aim of the CSE to give progressive digital exposure to investors. There are two dimensions to be considered here the CIO said. First, more and more important features have been added to the CSE’s digital mobile App over the last two years.

The CIO added: ‘A revamped mobile App is now at hand to enable quicker and informed investment decisions. All the information required by the investor is now available via this App to enable him to enter the market. For example, we are linked to the Department of Registration of Persons. Digital on-boarding and digital signing etc have been enabled via the app. On a full digital basis investors can now interact with the CSE.

‘The investor is now connected to the CDS E-Connect via the CSE and the investor could access his/her stock portfolio, for instance, and access his/her monthly statements. They could also make changes to their profiles such their address changes via the mobile App. Research reports of brokers could be accessed by the same means, nominations could be effected through the same mechanism. It’s a total change: a 360-degree info hub has been created through the App.

‘Secondly, the CSE is a more agile digital organization. For instance, most of our back-end functions are fully robotized. AI is used in many operations. We use AI for compliance operations.

‘We are saddled with very much less paperwork. Over 90% of all account openings are effected through our mobile App. Most paper-based formalities have been done away with.’

Continue Reading

Business

SriLankan Airlines unveils new and improved mobile App

Published

on

SriLankan Airlines has unveiled a new and improved mobile app that is designed for optimum user-friendliness. The enhanced app will afford customers greater ease and flexibility in managing their flight bookings, purchasing value-added services, enrolling for a FlySmiLes account and performing a variety of other tasks.

The new app provides greater autonomy for Customers through added features that are exclusive to the app. Customers will be able to choose their in-flight meal; reserve seats; change travel dates and sectors; buy value added services such as excess baggage, travel insurance and duty-free items; and check-in for flights well in advance.

The ability to manage flight bookings, even while on the move, remains entirely with passengers who will be empowered to exercise greater control in shaping their journey independently and dynamically. Customers’ in-app experience is inclined to be further enhanced with the new ‘My Trips’ feature. My Trips will organize and present important information that a customer requires for an upcoming flight in a timely fashion on the app’s homepage.

The homepage includes other up-to-minute information on the flight schedule and allows users to search and stay on top of the departure and arrival times of flights. Customers can also stay updated and not miss out on the latest deals and promotional fares.

Continue Reading

Business

Brandix Manusathkara Thilina 2022

Published

on

Brandix Apparel Ltd., gave hope to 16,824 children of the Brandix family by gifting them school essentials including stationery and schoolbags necessary for the new school year, under its ‘Manusathkara Thilina’ 2022 initiative recently.

 Understanding the current need to support our team members, especially during the current crisis of rising stationery costs, the children of 10,933 Brandix Associates were recipients of Brandix’s unstinting efforts to inspire and support education for all. The 2022 programme is being held for the 7th consecutive year where children from pre-school to Grade 13 received stationery packs.

Malika Samaraweera, Group Head of Corporate Social Responsibility at Brandix Apparel noted, “The beginning of the new school year is eagerly anticipated and exciting for all students. However, we realise that our employees, who are the backbone of our enterprise, are facing a daunting challenge to provide their children these essential items. We firmly believe in taking care of our communities and this year’s Manusathkara Thilina programme ensures these children have the tools and opportunity to learn and grow.”

 Begun in 2016, the Manusathkara School Essentials initiative seeks to drive home the importance of education among the children of Brandix employees. To-date, over 37,000 children have benefitted from the programme. The educational hampers gifted to the children comprise of stationery and other school necessities, enabling their success for the foreseeable future.

With the aim of driving social sustainability, the inspired team at Brandix continues their work towards Equal Opportunity and the Right to Education for All. Recognising that today’s challenges are wide-ranging and incredibly tough for many families, the school essential packs will enrich the lives of the beneficiary children and sustain their school education.

Supporting Sri Lanka’s aspiring youth towards continuity in their education, Brandix has also initiated an annual scholarship scheme under its ‘Manusathkara University Scholarship’ programme. Children who are high performers in the Advanced Level Examinations within the Brandix Model Villages are awarded scholarships to pursue their higher education and contribute towards Sri Lanka’s future workforce. The ‘Model Village’ concept was developed by Brandix to support the wellbeing of communities within a 10km radius of the company’s facilities.

Continue Reading

Trending