HNB Group posts Rs 4 b PAT - 1Q, 2017 | Sunday Observer

HNB Group posts Rs 4 b PAT - 1Q, 2017

21 May, 2017

HNB continued its growth momentum during the first quarter of 2017 with Group PAT growing by 16.4% yoy to surpass Rs. 4 bn while Bank PAT grew by 18.1% yoy to Rs 3.65 bn.

Growth in advances coupled with the rise in interest rates enabled interest income growth in excess of 45% yoy to Rs. 22.6 bn. While interest expenses were also higher on account of funds moving into higher yielding deposits, the Bank’s substantial CASA base of Rs. 228 bn cushioned the impact on interest costs partly. As a result, the Net Interest income grew by 25.9% to Rs 9.3 bn during the first quarter of 2017.

The Bank’s asset quality remained strong with the NPA ratio being at 1.85% as at the end of the first quarter of 2017, compared to the industry average of 2.7%. The provision coverage of the Bank improved from 73.4% in Q1 2016 to 79.5% in March 2017. Operational excellence initiatives continued to yield transformational benefits for the Bank which improved its cost to income ratio by 372 bps yoy to 41.9%. Operating profits before VAT and Taxes grew by 22.1% yoy to Rs 6.35 bn. Charges for VAT and NBT increased by 52.5% as a direct result of the revision in the rate of VAT from 11% to 15%. Subsequently, the Bank’s PBT grew by 16.5% to Rs. 5.1 bn. The PAT of Rs 3.65 bn represented a ROA of 1.7% and a ROE of 18.8%.

The Bank also reported efficient balance sheet growth, boosting its asset base by 18.7% yoy to surpass Rs. 900 bn in total assets. The Bank’s deposit base increased by Rs. 107.9 bn over the 12-month period to March 2017, to finance the Rs. 101 bn growth in advances during the same period. 

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