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POSTED AT 10:39 AM 15-05-2018

HNB Group records Rs 7.2 Bn PBT in Q1

HNB posted a strong start to 2018 with first quarter PAT growing by 22.5% to Rs 4.5 billion, while the Group reported a PAT of Rs 5 billion which is a 24% growth from last year.

HNB expanded its loan book by Rs 33.7 billion during the quarter which represented growth of 5.3%, enabling a 10.5% year on year (YoY) increase in interest income which totaled Rs 24.9 Bn. The Bank grew its CASA base by 9.9% in the three month period to Rs 273.6 billion, improving the CASA ratio to 38.0% from 35.5% as at December 2017. As such, growth in interest expenses was curtailed to 7.2% YoY while Net Interest Income (NII) grew by 15.1% YoY to Rs 10.7 billion.

The low cost deposit base was instrumental in the bank continuing to attain above industry net interest margins.

Commenting on the performance, MD/CEO of the Bank Jonathan Alles stated that “The banking sector is challenged by the implementation of SLFRS 9 reporting standards which could result in higher impairment charges, Basel III regulations requiring greater capital buffers as well as the new Inland Revenue act stipulating numerous and significantly higher taxes on banking revenues. Notwithstanding, we stay positive and committed on continuing our efforts to raise the bar.”

Net Fee and Commission Income increased by 11.6% to Rs 2.2 Bn relative to the corresponding quarter of 2017. Core non funded income sources being Credit Cards, Trade Finance and Bank Guarantees performed strongly while fees from Digital Channels exhibited promising growth. A net trading loss of Rs 273.7 Mn was reported during the quarter whereas a trading gain of Rs 541.7 Mn was reported during first quarter 2017.

The total impairment costs of the Bank increased by Rs 587.5 Mn against the comparable period in 2017, largely due to adverse weather and market conditions.

PBT of the Bank grew by 23.6% YoY to Rs 6.3 Bn while the PAT improved to Rs 4.5 Bn. The Bank recorded a ROE of 16.43% and a ROA of 1.84% for the first quarter of 2018.The Bank’s asset base grew by 3.8% during the quarter to Rs 990.8 Bn.

All of HNB’s subsidiaries and joint venture Investment Bank contributed to raise the Group PBT to Rs 7.2 Bn.