Amidst challenging market conditions, Hatton National Bank posted a profit before tax of Rs. 3.3 billion and a profit after tax of Rs. 2 billion for the first quarter of 2019 but reflected on negative impact ahead owing to the chain effect of the tragic April 21 bombings.
Commenting on the performance, HNB Chairman Dinesh Weerakkody said in a media statement, that: “Amidst macroeconomic gains, Sri Lanka’s economic growth trajectory remains underwhelming and meandering below 4 per cent. This has occurred due to a combination of tepid domestic demand, reduced government expenditure towards managing its deficit, tightening monetary policy, the political upheaval during the final quarter of 2018 and the overwhelming debt burden. Most of all this continues to exert enormous pressure on the performance of the financial sector.”
During the 12-month period ending March 2019, advances and deposits of the bank grew by 11.4 per cent to Rs.749.8 billion and 11 per cent to Rs. 799.7 billion, respectively.
Net Fee income amounted to Rs. 2.2 billion for the first quarter and constituted 14.9 per cent of total operating income. Income from credit cards and guarantee commission which are key contributors to fee income, demonstrated robust growth.
The release quoted Jonathan Alles, HNB Managing Director/CEO as saying that: “The slowdown in economic growth, collection difficulties experienced by many industries as well as the impact from the extreme weather conditions experienced in previous years, has resulted in higher non-performing assets in the banking industry and it continues to affect the current portfolio. In addition, the introduction of the stringent SLFRS 9 requirements on impairment on performing loans as well as on investments in other financial instruments has contributed to an increase in impairment charges for the period”.
The introduction of the debt repayment levy in 4Q 2018 as well as the removal of certain exemptions on income from investments with effect from April 2018, resulted in an increase in the total effective tax rate to a significant 58.6 per cent. Accordingly, the bank’s total tax charge stood at Rs. 2.9 billion for the period.
HNB Group made a profit after tax of Rs. 2 billion during the first three months of 2019.
“The prevalent uncertainty in the market, rising debt collection challenges, the resultant negative impact on many industries led by tourism, in particular following the tragic events of April 21, the knock-on effect on value chain business as well as unfavourable taxation policies could inhibit growth of the banking sector,” Mr. Alles added.
Transportation along the Southern Expressway has been impeded after a container truck toppled between Kahathuduwa and Kottawa today (Jul 17). ...
17 July 2019 - Views : 32
17 July 2019
17 July 2019
17 July 2019
Colombo’s first open street concept day saw residents reclaiming their streets from Green Path to Independ...
The Island Story, a brand new travel company with a fresh perspective on travel is collaborating with Botanik Rooftop...
Huawei recently organized a competition for shutterbugs under the theme "Beautiful Sri Lanka" The w...
A diving team attached to the Northern Naval Command recently discovered a beautiful coral reef which remained a well...