ECONOMYNEXT – Sri Lanka’s Hatton National Bank group has reported earnings of 7.1 billion rupees, up 44 percent from a year earlier, helped by higher interest MARGINS, amid loan loss provisions, interim accounts show.
HNB group reported earnings of 12.66 rupees per share for the quarter and stocks were trading at 121.25 rupees per share on Monday.
Fee and commission income grew 31 percent to 4.5 billion rupees.
In the March quarter interest income grew 146 percent to 80.7 billion rupees in the quarter and interest expenses rose 229 percent to 45.9 billion rupees and the bank grew net interest income 84 percent to 34.8 billion rupees.
Si Lanka increased interest rates in 2022 after the Central Bank printing money throughout the last two years to suppress rates triggering a currency crisis.
As a result, the banks in Sri Lanka had to make provisions for bad loans and also sovereign debt.
In the quarter HNB made provisions of 11.7 billion rupees, down from 13.5 billion rupees.
HNB said its stage 3 loans were kept at 3.8 percent
“Despite vulnerabilities in the operating income, the Bank was able to maintain one of the best asset quality positions in the industry, with the net stage III loan ratio at 3.8 percent and stage III provision cover at 55.5 percent as at end March 2023,”
“Having made significant provisions on account of impairment in 2022, the Bank made a total impairment of 11.4 billion rupees for the quarter.
“This consisted of impairment on loans and advances and other off-balance sheet exposures of 6.7 billion rupees, and impairment of 4.7 billion rupees on foreign currency denominated government securities.”
In the year assets grew 3 percent to 1.8 trillion rupees.
HNB reported a Tier I Capital Adequacy Ratios of 11.41 percent and total capital adequacy of 14.43 percent, higher than the minimum requirement of 9.5 percent and 13.5 percent respectively. (Colombo/ May15/2023)