HNB Finance records exceptional turnaround

Reflecting an exceptional turnaround in its financial performance from a loss last year, Sri Lanka’s leading integrated financial services provider HNB Finance PLC recorded a group net profit of Rs.515.6 million for the 2021-22 financial year.

Emphatically overcoming severe macroeconomic challenges, in a momentous year for the company – during which it acquired Prime Finance PLC – HNB Finance saw significant improvement in its asset quality and business performance indicators for the financial year ended on March 31, 2022. 

Group net interest income and group total operating income for the period amounted to Rs.3,903.9 million and Rs.4,929.9 million, respectively. Group profit before tax for the year was Rs.615.9 million.

All business lines of HNB Finance were profitable during the review period, driven by growth in disbursements and success in cost optimisation efforts – introduced in line with the prevailing economic conditions. HNB Finance Group’s loan-to-deposit ratio for the year was 123.36 percent, which reflects the group’s strong liquidity position.

HNB Finance also benefits from a well-diversified portfolio, which includes microfinance, auto and micro-leasing, gold loans and property and business loans. “This impressive and well-rounded financial performance during a highly challenging period serves as a resounding endorsement of the stability, resilience and growth prospects of HNB Finance,” HNB Finance PLC Chairman Dilshan Rodrigo said. 

“Our well-diversified portfolio, the significant synergies stemming from the merger with Prime Finance and the strength that HNB Finance derives from the backing of HNB PLC and Prime Lands Group, will strengthen HNB Finance in its growth journey.” 

After obtaining shareholder approval, HNB Finance concluded its merger with Prime Finance in May 2022 and the companies are now operating as a single entity under the HNB Finance brand. Significant synergies are expected from the amalgamation, which also further strengthened HNB Finance Group’s total asset base to Rs.46.56 billion as at March 31, 2022.
The strengthening of HNB Finance’s balance sheet enables better distribution of risks, with the addition of Prime Finance’s asset-backed loan portfolio. The addition of the capable team of Prime Finance, who possesses significant expertise, particularly in spheres such as real estate financing, will also strengthen HNB Finance’s talent pool. 

“While our diversified portfolio will assist us in navigating the current economic challenges, we remain strongly committed to supporting micro, small and medium enterprises (MSMEs),” HNB Finance PLC Managing Director/CEO Chaminda Prabhath said.

“These vibrant businesses are at the heart of the engine of economic growth and despite obstacles, we will support them through a coordinated initiative encompassing financial literacy, business revival 
and digital transformation.”