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Nov 10, 2009 (LBO) – Sri Lanka’s Hatton National Bank (HNB) said September quarter group profit rose 17 percent to 945 million rupees with interest margins improving slightly although asset quality deteriorated. HNB’s group gross income for the quarter grew by six percent to 10.3 billion rupees, with deposits increasing while lending fell, according to a stock exchange filing.

Earnings per share for the quarter were 4.01 rupees.

Interest income grew five percent to 8.7 billion rupees purely on interest income on other interest earning assets. HNB investments in government securities were up by 57 percent to 39 billion rupees.

Interest expenses fell three percent to 4.9 billion allowing net interest income to rise 17 percent to 3.7 billion rupees.

Non-interest income rose 15 percent to 1.6 billion rupees.

Provision for band loans fell 58 percent to 66 million.

Return on equity as at September 30, 2009 rose to 16.66 percent compared with 16.50 percent at the beginning of the year with the interest margin rising to 5.44 percent from 5.24 percent over the period.

But the quality of HNB’s loan portfolio fell with the gross non-performing loans ratio at 8.44 percent as at Septemb

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