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The bank said in a statement that it had contained non-interest income which grew only 6 percent in the first half of the year despite a steep rise in inflation. Personal and establishment expenses grew 10 percent.
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In the first half cost-to-income ratio had improved to 54 from 61 percent, the bank said.
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HNB group assets were up 3 percent to 247.
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7 billion with net assets up 2 percent to 22 billion rupees.
"Only recently have banks been forced to more than double their savings desposit rates," says Channa Amaratunga, director CT Capital.
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"Industry wide margins are coming under pressure, and deposit mobilization and provate sector loan growth is coming down.
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A HNB loan loss provisions for the quarter rose 53 percent to 246 million rupees.
At stand-alone bank level, net profits were up 26 percent to 819 million rupees, with dividends from securities and share trading subsidiaries of 45 million rupees boosting the bottom line.
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The bank also provided for 241 million for n