Nov 15, 2018 (LBO) – Hatton National Bank PLC (HNB) reported a Profit After Tax (PAT) of 14.5 billion rupees at Group level for the nine months to September 2018 recording a growth of 23 percent YoY.
The Bank’s PAT for the period amounted to 13.1 billion rupees growing by 21 percent YoY.
The Bank said prudent asset and liability management facilitated a 15.5 percent YoY growth to 34.2 billion rupees in Net Interest Income (NII) for the period, despite challenging market conditions.
Net Fee and Commission Income grew moderately by 10.8 percent YoY to 6.8 billion rupees in the period to September with Credit Cards, Trade Finance & Remittance businesses contributing to more than 50 percent of the fee and commission income.
Net losses from trading which reflecting principally the revaluation of forex swaps, reduced significantly by 55 percent to 1.2 billion rupees from a higher depreciated rupee and low volumes of swaps compared to the previous year.
Other operating income too witnessed a sizable growth of 23 percent to 3.4 billion rupees as a result of exchange gains on position revaluations and higher exchange income from forex transactions.
Reflecting on macro and industry conditions which have precipitated delays across the industry in collections; the Bank’s Gross NPA ratio as at the end of the third quarter increased to 3.1 percent from 2.9 percent reported in June, albeit remaining below industry norms.
The resulting increase in provisioning requirements led to impairment on facilities deemed individually significant rising by 49.0 percent YoY to just under 1.5 billion rupees for the period ending September whilst collective impairment charges rose to 2.1 billion rupees from 1.3 billion rupees in the commensurate period of 2017.
The sustained pursuit of the Bank’s initiatives in centralization and digitalization has yielded a continuous improvement in HNB’s Cost to Income ratio, which improved to 36.9 percent for the nine months ending September 2018, exceeding that recorded during the corresponding period of 2017 by 360 bps.
The Total Operating Expenses for the nine months increased to 16.0 billion rupees with growth being contained at 10.0 percent YoY.
Bank made a Profit Before Tax (PBT) of 19.3 billion rupees during the period while the 13.1 billion rupees PAT generated a Return on Assets (ROA) of 1.76 percent and Return on Equity (ROE) of 15.57 percent for the period.
Total advances grew to 717.8 billion rupees, supported by a nine month growth of 10.7 percent in the deposit base to 776.3 billion rupees.
The Bank remains strongly capitalized with Tier I Capital at 13.02 percent and Total Capital ratio at 15.62 percent , 415 bps and 275 bps above the respective regulatory requirements.