HNB records strong and stable performance

Hatton National Bank PLC (HNB), has firmed its position as one of the most sustainable and strongest banks with a stable performance in 2021. Group Profit After Tax (PAT) increased to Rs. 20 billion, representing a growth of 47 per cent YoY while bank PAT improved to Rs. 17.3 billion as economic activity picked up during the year, according to a bank statement.

It said that although the interest rates increased subsequent to the 50bps increase in policy rates in August, the average AWPLR for 2021 was approximately 160bps below the rate for 2020. This resulted in a decline of 5.1 per cent in interest income to Rs. 98.6 billion despite a strong loan growth in the second half of the year.

Commenting on the performance during the year, Chairperson of HNB PLC Aruni Goonetilleke stated: “2021 was a test of endurance and agility as the COVID-19 pandemic continued to disrupt lives and economic activity. During the tumultuous year, our colleagues around the country, led by our Managing Director/CEO Jonathan Alles and the Management Team have focused on protecting the interests of shareholders, while ensuring the wellbeing of colleagues, supporting our customers and showing solidarity with our communities”.

Net Fee and Commission income of the bank grew by 27.5 per cent YoY to Rs. 9.6 billion driven by higher card and trade business volumes as economic activity rebounded.

Commenting on the performance MD/CEO of HNB PLC Jonathan Alles noted: “Humanity has faced the crisis of a generation and HNB has demonstrated remarkable resilience against this backdrop. Our journey over the past 133 years has been through many peaks and troughs. We have continuously strengthened our risk management, compliance and governance, which has helped us overcome challenges. This is testament to our strong and stable performance”.

He said many customers have been successful in getting back on their feet as moratoria extended has reduced from 40 per cent of the loan book to 9 per cent as at end of December 2021. Currently the moratoria outstanding is only in the tourism sector, with concessions extended to other sectors ending in 2021.

Profit Before Tax (PBT) amounted to Rs.19.8 billion, a 31.5 per cent YoY increase from the PBT reported in 2020. The total effective tax rate for 2021 was at 28.9 per cent as the income tax rate reduced to 24 per cent from 28 per cent as well as due to reversals of excess provisions from previous years. Resulting PAT of Rs.17.3 billion generated a ROA of 1.3 per cent and a ROE of 12.1 per cent respectively.