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24 February, 2016 09:05 AM Source: Financial Times - Sri Lanka
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HNB Group as recorded a pre-tax profit of Rs.16.2 billion and a post-tax profit of Rs. 11 billion for the year ended 31 December 2015, while the Bank posted a profit before tax of Rs. 15 billion and a profit after tax of Rs. 10.4 billion for the same period. This is the first time the Bank surpassed the Rs. 10 billion landmark in PAT, driven by a more than 25% growth in both advances and deposits.

Commenting on the performance during 2015, Managing Director/CEO Jonathan Alles said: “We are pleased to share our performance that surpassed many milestones during the year. The Bank’s Profit Before VAT and Tax improved to Rs.17.9 billion, whilst Profit After Tax surpassed Rs.10 billion during the year. Both Advances and Deposits of the Bank increased by over Rs. 100 billion, once again the highest in the Bank’s history whilst the NPA ratio improved to 2.43%, the lowest in the past few decades. It is significant that this NPA was achieved whilst attaining a loan growth of 26% and was a result of the proactive efforts and commitment of our recovery teams at Head Office and across the country.”2

He attributed the exceptional performance for 2015 entirely to the tireless efforts, commitment and dedication of staff at all levels.  “Our staff remains our greatest asset in driving the Bank to greater heights. Also I wish to place on record my heartfelt appreciation to our valued customers for patronising HNB and building lasting relationships to achieve sustainable growth,” he continued.

The growth in advances was propelled by a 30% growth in Corporate Banking, 25% growth in SME, 65% growth in leasing and a 67% growth in personal loans. The Bank’s CASA ratio also remained strong at 42%, despite the shift witnessed from low cost deposits towards higher yielding fixed deposits during the year.

These efforts resulted in Net Interest Income (NII) for the Bank growing by 5.8% to Rs. 26.3 b, despite the banking sector margins continuing to drop during 2015. As at end 2015 the Bank maintained a net interest margin (NIM) of 4.5%. The Group witnessed a higher growth in NII of 14.3% to Rs. 29.7 b as a result of the Bank’s acquisition of Prime Grameen Micro Finance during the latter part of 2014, now rebranded as HNB Grameen. HNB Grameen has become a formidable force in the micro finance industry in Sri Lanka with the company witnessing its loan book growing by 66% and deposits by 46.4% during 2015.

The Bank’s commission income for 2015 grew by 18.4% to Rs. 5.8 b with major contributions coming from merchant acquisitions, guarantees and trade business. Fee income generated from electronic channels too witnessed significant growth during 2015. The Group witnessed its fee income growing by 23.1% with the commission income from HNB Grameen and Acuity contributing significantly and complimenting the performance of the Bank on commission income.

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