HNB explores S. Asian and S. East Asian expansion
The Hatton National Bank (HNB) is scouting for opportunities to expand into countries in South Asia and South East Asia, a top official said.
“With our strong capital base and expertise in all spheres of financial intermediation, we continue to explore opportunities for regional expansion into countries in South Asia and South East Asia,” Jonathan Alles, Managing Director/CEO HNB told the Business Times. He was speaking on the sidelines of the HNB investor forum on Tuesday at HNB Towers.
Mr. Alles further noted that a few opportunities had come up in these regions in the recent past, but going forward they realised that these are not the best fit for HNB. He added this year they are aiming at possible equity partnerships.
HNB’s loan product portfolio in small and medium enterprises (SME) and micro finance sectors was about Rs. 200 billion. “In addition to micro and SME financing, we also plan to broadbase our loan product portfolio into other growing sectors such as health, Information Technology and trade finance,” he said at the media briefing. Last year HNB entered into an equity partnership with Developing World Markets (DWM), a leading emerging markets impact investing firm. DWM has purchased 7.93 per cent shares of HNB Grameen.
HNB’s 4Q2017 saw individual loan impairments of Rs. 3.4 billion and this impact was cushioned by collective loan impairment reversals of Rs. 2.5 billion. The individual and collective loan impairment provisions in 4Q2016 were Rs. 270 million and Rs. 18 million, respectively.
HNB 4Q2017 results were supported by lower taxes. HNB’s 4Q2017 profit before income tax was 1 per cent year on year (YOY) to Rs. 6.3 billion. It saw a net profit attributable to shareholders grow by 14 per cent YoY to Rs. 4.6 billion in 4Q2017. Its net profit for the year was Rs. 16.5 billion at 16.4 per cent growth.
Mr. Alles noted that the macroeconomic environment is expected to remain challenging as GDP growth is expected to marginally exceed 5 per cent in the medium term. “We expect monetary policy to be relaxed to drive economic growth however, increased levels of debt repayment and the country’s aspiration of maintaining its unblemished repayment record may pose challenges.”