Lower Return

May 13, 2010 (LBO) – Sri Lanka’s Hatton National Bank (HNB) group profit fell nine percent to 650 million rupees in the March 2010 quarter from a year ago as it reduced lending slightly, a stock exchange filing said. Total income fell 11 percent to 8.99 billion rupees, the bank’s accounts showed.

Interest income fell 14 percent to 7.6 billion rupees and interest expenses fell at a faster 28 percent to 3.94 billion allowing net interest income to rise by seven percent to 3.66 billion rupees.

Basic earnings per share were down nine percent to 2.76 rupees.

Fee income rose 16 percent to 1.39 billion rupees but forex income fell 16 percent to 181 million rupees while other income rose 23 percent to 1.2 billion rupees.

HNB’s performing loans and advances had fallen three percent to 157.3 billion rupees in the March quarter from December, with gross loans down one percent 171.9 billion rupees.

Loan loss provisions were 30 percent lower at 49 million rupees.

Non-performing loans rose 17 percent to 14.6 billion rupees.

HNB’s gross non-performing loans ratio net of interest in suspense rose to 7.40 percent as at March 2010 from 6.17 percent at the beginning of the year.

Its interest