HNB Group’s post-tax profit in Q1 2013 drops for many reasons
View(s):The first quarter 2013 performance of Sri Lanka’s banking sector continued to be challenging, says HNB which has reported a post-tax profit of Rs. 1.16 billion, down from Rs. 1.23 billion in the 2012 first quarter.
Group post-tax profit was Rs. 1.27 billion compared to Rs. 1.32 billion at end of Q1 2012, the bank said in a statement.
Interest income however rose by 36 per cent to Rs.13.6 billion due to a 11 per cent year-on-year expansion in its loan book and relatively higher rates of interest.
Net income from fees and commission recorded an improvement of 10 per cent despite a slowdown in foreign trade during the period.
“However, the bank incurred a loss of Rs. 1 billion, compared to the gain of Rs. 805 million made in 2012 on account of the revaluation of forward contracts and swaps. The gain made in 2012 was largely on account of the significant depreciation of the Rupee witnessed during Q1 2012 while exchange rate volatility in the current period resulted in the loss due to revaluation of forwards and swaps,” the statement said.
HNB’s other operating income grew by Rs. 1.2 billion during the first quarter of 2013 from a loss of Rs. 379 million during first 3 months of 2012 due to exchange gains/losses from non-derivative assets and liabilities.
The fluctuation in the exchange rates as well as the change in composition of the bank’s non-derivative assets/liabilities resulted in the bank posting an exchange gain in the current period compared to 2012, it said.
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