HNB eyes SME, micro finance firms in overseas
Hatton National Bank’s (HNB) micro finance arm, HNB Grameen, is to list its shares in the Colombo Stock Exchange(CSE) shortly, Jonathan Alles, Managing Director / CEO HNB told the Business Times on the sidelines of the HNB Investor Forum recently.
“We aim to list HNB Grameen in less than a year,” he said. The DWM
Funds has bought 7.93 per cent of HNB Grameen Finance recently.
Mr.Alles said that they are also open for acquisitions in SME, micro finance sectors overseas. In 2015 HNB went to Cambodia and supported a firm involved in the micro finance sector with a US$ 50 million investment. Mr. Alles added that they are interested in acquiring finance companies locally, when the right opportunity comes.
He added that HNB has partnered with selected property builders in the mid income range where an apartment, targeting the middle income sector, is priced at between Rs. 20 million to Rs. 40 million and will fund them and this will continue in the future.
While noting that repayment in this price sector will be good, he added that there’s scope for lower end apartments as well. “I am sure that there is even a bigger opportunity in the lower segment where a unit can be priced around Rs. 20 million. If an investor cuts costs and come out with a project of this nature it would be really profitable.”
HNB’s housing portfolio grew by 15 per cent last year and the target for this year is 20 per cent, Mr. Alles said. “The lending portfolio would be around 15 per cent to 18 per cent and it was 20 per cent a few years ago.” HNB minimised loan losses with stronger collections with two large recoveries that added to 50 per cent in their loan collections – a loan to a Maldives hotel group (which was bought by an Asian hotel chain) and a local plantation. Mr. Alles said that the bank is very careful when it comes to lending owing to the very weak regulations and the legal system in place for recovery and it takes a long period of time for recoveries.
“Due to this, the banks are careful when it comes to strong lending. We also have a very strong recovery branch.” The deposit growth of 18.3 per cent during the year outperformed the 16.5 per cent growth in the industry to achieve Rs 623.5 billion, he showed in his presentation adding that HNB emerged as the most profitable private sector banking group achieving Rs 22.5 billion in group profit before tax and posted the best financial results in its history.
In a bid to ward off threats from telecommunication companies in the future, HNB’s new role inside the bank, the Chief Digital Officer has been a plus, he said noting that HNB seeing the rising challenges from the telecommunication companies infiltrating into the space traditionally dominated by banks decided to create this. “Our digital drive towards becoming the most future ready bank also contributed immensely towards this great success,” he said. HNB group’s assets surpassed Rs. 900 billion while group PAT was at Rs. 15.67 billion, the Chief Operating Officer Dilshan Rodrigo said.
The HNB which called an EGM on March 27 to appoint Dinesh Weerakkody as a director said in an announcement to the CSE on Thursday that it won’t go ahead with this meeting as the three shareholders – Distilleries Company of Sri Lanka PLC, Stassens Export Limited and Milford Export (Private) Limited which requisitioned this appointment of Mr. Weerakkody withdrew it in writing to HNB on Wednesday.