HNB: Slowdown in imports due to lower vehicle imports
View(s):Hatton National Bank PLC (HNB) has posted post-tax profit (PAT) of Rs. 8 billion for the 9-month period ending September 2019 while the group recorded a PAT of Rs. 8.7 billion for the same period. The third quarter of 2019 saw HNB’s profits improving to Rs. 3.2 billion compared to the previous quarters while the group PAT for the quarter was Rs. 3.6 billion.
“All group companies contributed to group profitability during the 9- month period with group Operating Profit and pre-tax profit (PBT) amounting to Rs. 20.8 billion and Rs.14.6 billion, respectively,” the bank said in a statement, adding that Rs 12.2 billion was paid as group taxes.
Sluggish economic growth, exacerbated by the prevailing uncertainty continued to impact the banking industry and affect demand for credit. The focus on CASA deposits enabled HNB to grow its CASA base to Rs. 270 billion resulting in an 11 per cent YoY growth in Net Interest Income over the corresponding 9-month period ended September 2018.
Fee income for the 9-month period contracted marginally compared to the previous year. The decrease in income from trade finance was a key reason as the country saw a slowdown in import volumes during the year mainly due to lower vehicle imports. The low economic activity and the absence of development projects, resulted in guarantee and loan fees declining as well.
The rupee which experienced significant volatility between January to September 2018 resulted in an above average exchange gain of Rs. 1.8 billion for 2018. With currency movements not being as pronounced during the first nine months of 2019, only Rs. 287 million in net exchange gains were booked.
HNB Chairman Dinesh Weerakkody, commented that: “The economy has been struggling following the unfortunate events of April 21 that resulted in many industries being negatively impacted directly and indirectly and that includes the financial services sector. However, micro and macro indicators have gradually improved since then; therefore we remain bullish that the economy will gradually regain its lost momentum.”
Managing Director/CEO of HNB PLC Jonathan Alles commenting upon the bank’s performance stated that “the economy and country is currently at a crucial juncture and we are confident of the future prospects post Presidential Election. It is imperative that conducive policies are implemented and the Executive and the Legislature work in tandem to ensure long term sustainability of our economy.”
Mr. Alles added that “notwithstanding external conditions, HNB is forging ahead with its ambitious transformational journey to ensure future readiness.”