HNB Group post tax profits up by 101% to Rs. 1.18 b

Hatton National Bank continued its impressive comeback by recording a 67% rise in pre-tax profits to Rs. 1.18 billion in the nine months to September 2005.

Commenting on the performance, HNB's Director/ Chief Executive Officer Rajendra Theagarajah said " We are extremely pleased with such exceptional performance which has been sustained during the three successive quarters in 2005.

The continued attention of Team HNB in balancing business growth with profitability, improving productivity, managing costs, and focusing on enhanced asset quality has contributed towards this performance", he said.

Net interest generated from interest sensitive assets has increased by 27%. The nine months have also seen the entire operating expense bill of Rs 4.3 bn been met by Net interest income from Core banking activity. Net Income including foreign exchange, commission income and investment income grew by 20% during this 9 months.

HNB has maintained its tight leash on expenses with operating costs increasing by a mere 7%. The 53% rise in post tax profits has been achieved with a growth in assets of just 5% during the 9 months to Rs 160 billion. The tight focus on Balance sheet growth has contributed towards improved return and productivity of the bank's asset base. Return on Assets on an annualized basis reached 1% which was a remarkable improvement over the 0.68% of December .

The bank continues its quest to improve asset quality. Its loan quality has shown steady improvement with two key performance indicators namely NPA % and NPA cover have improved to 8.6% and 65% respectively in September 2005.

The Group too has delivered exceptional results with the Pre Tax profits recording a 101% increase.with the subsidiary companies contributing towards the Rs 1.1 bn Post Tax profit. The company announced a 20% interim dividend last evening. HNB's voting share price closed at Rs 140/- on Tuesday.