ECONOMYNEXT – Profits at Sri Lanka’s Hatton National Bank group, which includes a insurer fell 15 percent to 2.97 billion rupees in the June 2019 quarter from year earlier, as a debt repayment levy hit profits and loan growth contracted, interim accounts showed.
The group reported earnings of 5.84 rupees per share for the quarter. For the six months to June, the group reported earnings of 9.83 rupees per share on total profits of 4.9 billion rupees, down from 7.8 billion rupees a year earlier.
Interest income grew 14 percent to 32.0 billion rupees, interest expenses also grew 14 percent to 17.4 billion rupees and net interest income grew 3 percent to 2.51 billion rupees.
Loans contracted 3 percent to 749 billion rupees by end June from December 2018. The bond portfolio also fell 6 percent to 155 billion rupees.
"The Bank’s robust business model coupled with prudent asset and liability management, enabled HNB to post stable results from its core banking operations despite a slowdown in balance sheet growth," the group told shareholders in a statement.
Loan losses grew 8 percent to 2.4 billion rupees in the quarter, from a year earlier.
The gross non-performing loan ratio grew to 4.69 percent in June from 2.78 percent in December.
Deposits fell to 814.7 billion rupees in June from 818.0 billion rupees in December.
Net fee and commission income grew 2 percent to 2.45 billion rupees.
Trading losses increased to 1.49 billion rupees from 1.17 billion rupees.
"An appreciating Rupee led to translation losses on foreign currency denominated long positions and FCBU earnings; this being the main reason for the Bank booking exchange losses of Rs 577.2 Mn during the first half," the firm told shareholders.
"In comparison, a substantial exchange gain of Rs 895.5 Mn was reported for the corresponding period ending June 2018."
Net gain on financial instruments rose 10 percent to 1.91 billion rupees.
Other operating income fell 2 percent to 1.7 billion rupees.
A new debt repyament levy of 717 million rupees hit the bottom line.
Gross assets fell 1 percent to 1,140 billion rupees. Net assets grew 3 percent to 141 billion rupees. At bank level capital adequacy rose to 15.5 billion rupees from 15.22 billion rupees. (Colombo/Aug13/2019)