Hatton National Bank (HNB) despite the challenges in 2011 has recorded strong results for the financial year January-December 2011.
The bank’s interest income recorded a growth of 9.6% due to rapid growth in loans and advances, compared to the negative growth witnessed in 2010.
However growth in interest income did not keep pace with the increase in loans and advances, demonstrating a drop in yields compared to 2010. However, interest cost in 2011 increased by 13.9% during the same period, despite deposits growing at a slower pace than advances, according to a bank statement.
It was successful in growing its commission income base by more than 32% during the year with trade income and card commissions leading the way. However exchange income witnessed a setback during 2011 due to relatively stable exchange rates for the most art of the year.
“A significant drop of 49.9% was noted in other income due to the absence of capital gains realized in 2010 from the disposal of investments in Commercial Bank of Ceylon PLC, Distilleries Company of Sri Lanka PLC, Acuity Securities (Pvt) Ltd and Lanka Ventures PLC and the marked to market gains recorded from equity investments in the previous year,” it said.
However, the dividend income increased by Rs 200 million as a result of higher dividend declared by DFCC. Commenting on the expansion drive during the year, Rajendra Theagarajah - Managing Director/CEO said that “in 2011, our focus was essentially to further penetrate the rural sector, and as such we followed a concerted strategy of network penetration with a view to not only enhance our footprint across the island but also to bring the concept of banking to the very doorsteps of every rural community.”
Post tax profits at the bank stood at Rs 5.6 billion, up 24.8 % from 2010 despite pressure on margins and significant reduction in investment income as explained above. The HNB Group net profit for 2011 amounted to Rs 6.2 billion, up 27.6% from 2010.
The bank’s loan book grew by ‘a staggering’ 25.8% to Rs 264.3 billion, the statement added.
“Though the bank witnessed a robust growth in deposits of 21.4%, it did not keep pace with loans and advances.”
|
E-mail
