Hatton records Rs.652.8 million post-tax profit

HNB's first quarter pre-tax profit increased to US$10.49 million from US$10.33 million in the same period last year. The Group's pre-tax profit for the period also improved to US$10.72 million from US$9.97 million amidst re-pricing of assets and liabilities taking effect, subsequent to the sharp reduction in interest rates in the final quarter 2009.

On the other hand, Hatton National Bank's post tax profit declined to US$5.76 million from US$6.29 million in the first quarter of 2009.

According to Managing Director / Chief Executive Officer Mr. Rajendra Theagarajah, the interest income dropped by 14.7 percent to US$66.37 million mainly due to fall in interest rates while advances also witnessed a marginal negative growth. In spite of the pressures on interest margin, the Bank was successful in recording a 4.6 percent growth in net interest income during the quarter due to the Bank's aggressive asset liability management.

Non-interest income improved by 14 percent on account of increase in commission income, and capital gains on sale of 20 percent stake held in Lanka Ventures PLC, in spite of fall in foreign exchange income by 16.6 percent mainly due to static exchange rates.

Amidst intense competition within the low interest rate regime, the Bank managed to record a marginal growth in the deposit base and effectively bring down the cost of funds shown by the 4.5 percent shift from fixed deposits towards savings deposits.

The Bank expects to be in the forefront of the economic revival of the country, and the main focus going forward would be on the Northern and the Eastern provinces where HNB has been operating even during war. Furthermore, HNB targets to surpass 200 customer centres by the end of 2010 with six new customer centres in the North and the East during the year.