HNB more than doubles earnings in second quarter

Hatton National Bank PLC (HNB) recorded robust performance for the quarter ended June 2021 (2Q21) amid strong core banking operations, while all the group companies contributed towards the consolidated performance.  

The banking group more than doubled its earnings during the quarter under review reporting earnings of Rs.9.03 a share or Rs.4.7 billion compared to earnings of Rs.4.03 a share or Rs.2.1 billion in the corresponding period of the previous year.

The group saw its net interest income rising 15 percent year-on-year (YoY) to Rs.14.4 billion while the net fee and commission income surged 55 percent YoY to Rs.2.2 billion.

The group’s interest margin improved to 3.53 percent as at June 2021 from 4.31 percent as at December 2020.
The group earnings during the quarter were heavily supported by a net insurance premium income stemming from HNB’s insurance subsidiary.

Also, the banking group reported net other operating income of Rs.2.4 billion for the quarter under review, up from a mere Rs.220 million a year ago.

HNB gave over Rs.28 billion in new loans during the first half ended in June 2021. The bank’s assets expanded by 3.5 percent in the six months to Rs.1.337 trillion, while the group assets grew to Rs.1.417 trillion.

Total deposits increased to Rs.1.032 trillion as at end of first half recording growth of 6.7 percent. 

The banking group provided Rs.3.8 billion on possible bad loans during the quarter, down 16 percent YoY, while for the first half impairments stood at Rs.6.8 billion, down 27 percent YoY.

HNB’s bad loan ratio improved to 4.25 percent at the end of June 2021 from 4.31 percent as at December 31, 2020.

HNB is also among the best capitalised and most liquid in the industry as demonstrated by a Tier I Capital Adequacy Ratio of 15.31 percent, Total Capital Adequacy Ratio of 18.42 percent, a Liquid Coverage Ratio of 273.7 percent, and a Loan to Deposit ratio of 81.2 percent. 

For the first half of 2021, HNB reported earnings of Rs.18.02 a share or Rs.9.5 billion compared to earnings of Rs.9.83 per share or Rs.5.5 billion.