HNB Group bullish on Asia and Africa
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Colombo Stock Exchange (CSE) Chairman Vajira Kulatilaka; Mithila Mendis - CEO of thinkCube; CSE CEO Rajeeva Bandaranaike and Head of Market Development at CSE Niroshan Wijesundere at Thursday’s launch of the CSE Educational Portal.
The HNB Group has set its sight on regional expansion with Asia and Africa on its radar, a top official says. ”Last year we lent US $50 million ( to a certain company) in Cambodia, to show that intent. Similarly we gave $5 million to the energy sector in Africa,” Jonathan Alles, Managing Director/CEO HNB told the Business Times. He said that last year large equity investments were also done in Asia and Africa. HNB group which recorded a pre-tax profit of Rs. 16.2 billion and a post tax profit of Rs. 11 billion for the year ended 31st December 2015 is also upbeat about the trip to China early last month with the Central Bank (CB) Governor Arjuna Mahendran.
“It was an extremely useful trip. The fact that global giants are interested in Sri Lanka and want to partner with local banks at an infrastructure lending level is phenomenal,” Mr. Alles said, adding that he’s due to meet a major Chinese bank in Colombo. HNB Bank posted a profit before tax of Rs. 15 billion and a profit after tax (PAT) of Rs. 10.4 billion for the same period. This is the first time the bank surpassed the Rs. 10 billion landmark in PAT, driven by a more than 25per cent growth in both advances and deposits. Both Advances and deposits of the bank increased by over Rs. 100 billion, once again the highest in the bank’s history whilst the NPA ratio improved to 2.43 per cent, the lowest in the past few decades.
It is significant that this NPA was achieved whilst attaining a loan growth of 20 per cent, the bank said in a media release. The growth in advances was propelled by a 30 per cent growth in Corporate Banking, 25 per cent growth in SME, 65 per cent growth in leasing and a 67 per cent growth in personal loans, the release said, adding that the bank’s CASA ratio also remained strong at 42 per cent, despite the shift witnessed from low cost deposits towards higher yielding fixed deposits during the year. “The bank’s commission income for 2015 grew by 18.4 per cent to Rs. 5.8 billion with major contributions coming from merchant acquisitions, guarantees and trade business.
Fee income generated from electronic channels witnessed significant growth during 2015,” it said adding that free income grew by 23.1per cent with the commission income from HNB Grameen and Acuity contributing significantly and complimenting the performance of the bank on commission income. It said that during the year 2014, the bank realised a capital gain of Rs. 889 million on account of the sale of shares held in Visa and MasterCard. “The absence of any realised capital gains from equity investments in 2015, resulted in lower net gain from financial investments for the period under review,” it said, adding that the volatility of exchange rates during the year and the significant depreciation of the Rupee, aided the bank to record substantial growth in exchange income.”
All the stockmarket stories have been compiled by senior stockmarket reporter Duruthu Edirimuni Chandrasekera