Despite losing Sri Lanka Insurance Corporation (SLIC), businessman Harry Jayawardena is still the major shareholder at Hatton National Bank (HNB) through a range of companies while Galleon Fund, managed by in-the-news Raj Rajaratnam through the Deutsche Bank Trust Company Americas (DBTCA), seems to be a close second, analysts said.
“DBTCA is a Global Depository Receipt (GDR) account (with 15% in HNB), in which Galleon has invested about 10% and it is still the single largest shareholder at HNB, but despite Jayawardena losing SLIC under the landmark judgment recently, he controls it through six related parties,” an analyst said.
According to analysts, Mr Jayawardena’s firms and related parties control HNB with 30.02% as at September 30th which are CBD Exports Ltd (6.53%), Milford Exports (Ceylon) Ltd (6.52%), Stassen Exports (5.66%), Panchalingam Associates (5.19%), Sonetto Holdings Ltd. (3.59%0 and the Distilleries Company of Sri Lanka Ltd with 2.53%. SLIC which was reverted to the government after the Fundamental Rights case has 4.9%.
A statement by HNB said that the bank saw a 5% increase in profit after tax during the third quarter ended 30th September 2009 to Rs 2.68 billion from Rs. 2.56 billion in the same period in 2008, adding that the bank saw a 17% growth in net interest income despite volatile interest rates and negative growth in advances.
“Exchange and commission income declined in the face of reduction in the trade business coupled with the stable exchange rates prevailed during the period,” it said, adding that non interest expenses grew by 16% mainly due to the increase in staff costs and setting aside of an additional provision in respect of staff retirement benefit from December 2008 due to the Bank adopting Sri Lanka Accounting and Auditing Standards 16 (revised 2006) on Employee Benefits.
“HNB’s net non-performing asset ratio increased to 3.67% from 2.27% in December 2008, but this trend is expected to reverse with the recent reduction in interest rates and the revival of the economy,” the statement said.