HNB demonstrates resilience amidst economic challenges

A pedestrian checks his phone on Hatton National Bank head office premises in Colombo

Hatton National Bank PLC (HNB) kicked off its financial year with optimism, hoping that the worst of the financial crisis was behind. However, its leadership said it remained cautious about the uncertainties that prevailed.
Commenting on the performance for the financial year 2023, HNB Chairman Nihal Jayawardene said, “The board continued to maintain focus on key risk areas and the opportunities, to navigate through the uncertainty in the operating environment. This enabled us to record robust performance overall.”

HNB Managing Director/Chief Executive Officer Jonathan Alles pointed out that during these most challenging and uncertain times, the bank has focused on sustainable growth, ensuring the safety of depositors, facilitating access to finance and business revival for customers, providing fair rewards and recognition for employees and offering investors a reasonable return for the assumed risk.

“Inspiring our customers to move forward with optimism is key to growth and we set out to understand and address customer pain points. We also supported our customers through the pandemic, financial crisis and its aftermath, keeping businesses afloat by restructuring loans, offering moratoria and even grants for micro entrepreneurs,” he said.  

HNB has always aligned its strategy to the country’s needs and is committed to charting a course that delivers shared prosperity to Sri Lankans and supporting the country’s transition to a low carbon economy. The areas identified for growth include tourism, exports, renewable energy, healthcare, education, information technology, local manufacture and agriculture. 

Alles stressed that growth must be resilient, built on solid foundations of disciplined financial management and sound corporate governance. “It is the need of the hour at individual, entity and government levels, as we stand up not just for our rights but to honour our obligations as well.”

The bank’s asset base expanded at 14.4 percent year-on-year (YoY) to Rs.1.9 trillion as at the end of December 2023. However, the bank witnessed a contraction in gross loan book of 1.8 percent, due to the sluggish demand for credit and the cautious approach adopted during the first half, with the interest being relatively high. On the other hand, the total deposits of the bank continued its growth trajectory, expanding by 12.2 percent YoY to Rs.1.6 trillion.

The bank reported strong Tier 1 and total capital adequacy ratios of 13.66 percent and 17.13 percent against the minimum statutory requirements of 9.5 percent and 13.5 percent, respectively, with the provision to drawdown a further 250 bps from the capital conservation buffer. The bank has continued to maintain a strong liquidity position with a statutory liquid asset ratio of 48.2 percent and an all-currency liquidity coverage ratio of 445.9 percent, which are both well above the regulatory minimum requirements of 20 percent and 100 percent, respectively.