Hatton National Bank PLC has posted a pre-tax profit of Rs 1,193 million for the first quarter 2010 compared to Rs 1,175 million in the corresponding period of 2009.Group pre-tax profit for the period improved to Rs 1,219 million from Rs 1,134 million amidst re-pricing of assets and liabilities taking effect, subsequent to the sharp reduction in interest rates in the 2009 final quarter, the Bank said.
HNB's Managing Director/Chief Executive Officer Rajendra Theagarajah said the interest income dropped by 14.7 percent to Rs 7,546 million mainly due to fall in interest rates while advances also witnessed a marginal negative growth.
Interest paid decreased by 27 percent to Rs 3,928 million as a result of lower deposit rates and shift in the deposit mix towards low cost deposits.
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.
The Bank's effective tax rate increased to 45.3 percent in first quarter 2010 compared to 35 percent for the corresponding period 2009 resulting in a post tax profit of Rs 652.8 million in the first quarter 2010 against the post tax profit of Rs 763.1 million in 2009 representing a negative growth of 14.5 percent.
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 as evident by the 4.5 percent shift from fixed deposits towards savings deposits.
The price of the voting share of HNB improved by 10.6 percent during the first quarter 2010, with the price at Rs 188.25 end of the first quarter 2010 compared to Rs 170.25 at the end of December 2009 while the non voting share recorded a gain of 33.6 percent to Rs 140 from Rs 104.75 at the end of 2009.
The Group post tax profit declined to Rs 655.4 million from Rs 715.5 million in first quarter 2009 in line with the Bank. However, other Group companies namely HNB Assurance PLC, Sithma Development (Pvt) Ltd and the Joint Venture Investment Bank Acuity Partners posted positive growth over first quarter 2009.
The Bank expects to be in the forefront of economic revival of the country and the main focus going forward would be on the North and the East provinces where HNB has been operative even during the time of war.
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.
source - www.dailynews.lk
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