Daunting task ahead for HNB customersView(s):
Stressed income levels, high interest rates, inflation and taxes continued to aggravate Sri Lanka’s economic crisis as it hindered the repayment capacity of customers of HNB, the bank said this week.
“This has resulted in the need to make higher provisions on account of loan impairment. The impairments on investments in foreign currency denominated government securities is an additional burden on capital at a time not conducive for raising fresh capital,” said HNB Managing Director/CEO Jonathan Alles, in his review of the bank results for the 9-months ending September 2022.
HNB posted a profit before tax of Rs. 12.4 billion and profit after tax of Rs. 10.5 billion during the nine-months which ended September 2022 while the group recorded a profit after tax of Rs. 11.6 billion.
Group after-tax profits saw a drop of 13.2 per cent compared to the previous year, due to the significant increase in impairment charges on account of investments in foreign currency denominated government securities as well as loans and advances.
Mr. Alles added: “While macro-economic uncertainties continue, we note the progress made by Sri Lanka with regard to its discussions with both public and private creditors. As the backbone of the economy, banking sector stability would be crucial to ensure the revival of Sri Lanka. As such, we strongly believe that the interest of the banking sector would be safeguarded to ensure that the country reaches its development goals under the IMF programme.”
Aruni Goonetilleke, Chairperson of HNB PLC said, “Our performance under extremely turbulent conditions clearly demonstrates the confidence placed in us by our customers, the robustness of our business model and the focus and expertise of our team in navigating through intensified uncertainties.”
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