Not So Bad

Sri Lanka’s biggest listed bank, Hatton National Bank, said it doesn’t expect to make a large provision for doubtful loans in the wake of last month’s tsunami disaster. Sri Lanka’s biggest listed bank, Hatton National Bank, said it doesn’t expect to make a large provision for doubtful loans in the wake of last month’s tsunami disaster. Only a few loans in the bank’s Rs. 90 billion ($906 million) portfolio were affected by the tsunami based on initial estimates, the bank’s chief executive Rajendra Theagarajah told Dow Jones Newswires in an interview.

Most of these loans were given to small-sized hoteliers and for the purchase of vehicles, he said.

“At this point in time, we don’t have any materially identified losses that will affect the bottom line,” he said. However, he added that “there could be the prospect of indirect impact that is difficult to quantify.”

Provisions for doubtful loans in 2004 will be a fraction of the Rs. 200 million in loans directly affected by the tsunami, Theagarajah said. The bank will assess whether further provisions for tsunami-affected loans would be needed this year, he said.

The Dec. 26 tsunami resulted i