May 13, 2013 (LBO) – Sri Lanka’s Hatton National Bank group profits were flat at 1.22 billion rupees in the March 2012 quarter, as losses ticked up amid slow loan growth, interim accounts showed. A group level number was not available.
Sri Lanka is recovering from a balance of payments crisis and a sharp spike in inflation triggered by state manipulation of electricity and diesel prices with bank credit which was ultimately accommodated by central bank credit.
Low or negative loan growth, rising bad loans are usual consequences of balance of payments crisis.
After rates were raised the state and loss making state enterprises continued to borrow from the banking system, crowding out private borrowing and keeping lending and deposit rates high, and slowing the economy.
Last week the Central Bank cut policy rates by 50 basis points.
Group gross assets rose one percent to 465 billion rupees and net assets fell one percent to 52 billion rupees.
The bank reported earnings of 3.30 rupees per share for the quarter. The stock closed at 168 rupees down 2.80 rupees.
Interest income rose 37 percent to 13.8 billion rupees, interest expenses rose at a faster 46 percent to