Hatton National Bank’s first quarter 2009-2010 results has seen a drop of 4% year-on-year to Rs 712 million, analysts said this week but the company noted however that there was impressive growth of 14 % in the income to Rs 9.68 billion.
In a statement, the bank said despite unfavourable global as well as local economic conditions it continued to perform well with operating profit from ordinary activities before tax and financial VAT totalling Rs 1.7 billion mark, up 10% over 2008.
“The operating profit after tax for the period is Rs 763.1 million which is 2% growth from Rs.751.3 million in 2008,” it said adding that provision for the Financial VAT and Income tax for the first quarter was Rs. 937 million. High taxation on financial services continues to be a major obstacle for the growth in the industry, it said.
The statement said that following the slowdown in the local banking industry and a stringent credit policy being adopted due to unfavourable market conditions with focus on asset quality and risk management, the bank’s loans and advances contracted by 5% from Rs. 170.8 billion to Rs. 162.2 billion.
During the first quarter the bank’s deposit base grew by Rs. 5 billion “demonstrating the confidence the public has placed on HNB during times of uncertainty in the financial sector”, the bank said.
The bank has also planned to expand the network by 10 – 12 branches during the year, which includes four branches in the northern and eastern provinces. During the period under review the bank increased the ATM network by installing 13 new ATMs taking the total to 273 and has planned to increase the number to 300 by the end of the year.