HNB Assurance most profitable in HNB Group

HNB Assurance Plc (HNBA) has slotted itself as the most profitable subsidiary of Hatton National Bank (HNB) last year, recording a profit of Rs.123.3 million.

“This is the first time HNBA crossed the 100 million mark and the profit growth is 35 percent from 2006’s Rs.91.3 million,” Manjula de Silva, CEO HNBA told The Sunday Times FT on the sidelines of a press conference. The company has announced a Rs.1 per share dividend to its 37.5 million shareholders based on profits recorded this year.

De Silva noted that 60 percent of HNBA’s profit is accounted in HNB’s profits. “However, when you take HNB as a whole, this figure is not that huge for the bank,” he said.

He said with the new share capital requirements of Insurance Board of Sri Lanka (IBSL) HNBA will look at opportunities of acquiring firms which are unable to meet the regulator’s criteria.

“That will be a longer term plan. We are not thinking of any acquisitions at present, but we will look at opportunities arising due to the new share capital requirement of IBSL – especially when firms cannot meet these specifications there may be opportunities for us,” he explained.

HNBA has Rs.375 million capital presently and De Silva is confident that the company can meet the Rs.500 million requirement by end 2008 with HNBA’s retained profits. Though he was supportive of the capital requirement laws of IBSL, De Silva noted that proposals to separate life and general divisions as separate firms by the regulator was not done after discussing with the industry stakeholders.

“We are not in favour of life and general separation. IBSL must look into companies who are not keeping life and general funds separately if they allege so. Separating these divisions as individual firms will have duplication of staff particularly at branch level, amongst a host of other issues,” he stressed.

The company had a 31 percent growth in turnover from Rs.1.122 billion in 2006 to Rs.1.472 billion in 2007.