In the backdrop of turbulent market conditions, Hatton National Bank PLC continued to demonstrate resilience, strength and stability, posting a profit before tax of Rs 5.9 billion(bn) and a profit after tax of Rs 4.8 bn for the first quarter of 2022 recording a YOY growth of 7% and 3% respectively. At Group level PBT and PAT were at Rs 6.4 bn and Rs 5.4 bn respectively.
Commenting on the first quarter performance, Aruni Goonetilleke, Chairperson of Hatton National Bank PLC, stated that “as Sri Lanka goes through unprecedented times, HNB has yet again demonstrated resilience. At this critical time, I wish to reiterate our commitment to all our stakeholders. As a responsible Domestic Systemically Important bank, ensuring safety, stability and sustainability is our prime focus.”
With the tightening of the monetary policy since August 2021, the AWPLR increased by nearly 400 bps over the 12 months up to March 2022. This enabled the Bank to record a 59% increase in NII during 1Q 2022 compared to the corresponding period of the previous year.
The Net Fee income grew by 42% YoY to Rs 3.2 bn for the first quarter of 2022, driven mainly by improved card transactions and trade income. The significant devaluation of the rupee as at March 2022, compared to the previous year, resulted in trading gains of approximately Rs 7.5 bn in 1Q 2022. The Bank also booked an impairment of Rs 7.4 bn against the impact of the currency devaluation on foreign currency denominated loans and investments, which was set-off against the position revaluations.
The Bank’s net stage III loan ratio improved from 2.55% as at December 2021 to 2.41% as at end March 2022 while stage III provision cover increased to 59%, maintaining its position as one of the best in the industry in asset quality. Operating expenses increased by 21% in 1Q 2022 driven by salary revisions, relatively higher card transaction volumes with the pickup of economic activity and general expenses increasing in line with higher inflation. However, the stronger growth in income enabled HNB to record a cost to income of 25% during the first quarter of 2022. HNB’s total tax charge increased by 33% to Rs 2.8 bn for the first quarter.
Jonathan Alles, Managing Director / Chief Executive Officer of Hatton National Bank PLC stated that, “Sri Lanka has been travelling through tough terrain over the past few years and HNB has weathered challenges and emerged strong and stable. Today, Sri Lanka as a nation is facing one of the most challenging times in its history.”