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.
In the first half cost-to-income ratio had improved to 54 from 61 percent, the bank said.
HNB group assets were up 3 percent to 247.
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.
"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.
The bank also provided for 241 million for n