Hatton National Bank PLC posted a profit before tax of Rs 12.4 bn and profit after tax of Rs 10.5bn during the nine-months ended September 2022 while the Group recorded a profit after tax of Rs 11.6 bn.
The interest income of the Bank grew by 86% to Rs 134.9 bn, primarily due to an increase of over 12 percentage points in average AWPLR during the period, in line with tight monetary policy measures adopted by the Central Bank. The net interest income of the Bank increased by 100% YoY to Rs 71.1 bn in the first nine months up to September 2022.
The net fee income recorded a growth of 65% YoY to Rs 11.0 bn largely due to higher trade and card income, compared to a subdued 2021. The Rupee devaluation by over 80% during the period resulted in an exceptional exchange income of Rs 16.8 bn.
The 110% increase in total operating income to Rs 99.7 bn was negated by the 438% increase in total impairment charge to Rs 60.3 bn for the nine months. This included an impairment charge of Rs 41 bn on account of the investments in foreign currency denominated government securities held by the Bank.
The net stage III ratio of the Bank increased to 3.34% from 2.55% as at end of December 2021 as a result of the stressed market conditions, and the Bank recognised an impairment of Rs 19.3 bn on account of loans and advances compared to Rs 9.9 bn in the previous year.
HNB curtailed the increase in operational expenses at 27% YoY in the backdrop of a 70% YoY inflation and an 80% depreciation in the Rupee. The cost to income ratio improved to 22.9% for the nine-month period which is an improvement of 15 percentage points compared to the corresponding period of the previous year, supported by the significant growth in net income.
The Bank’s asset base expanded by 20.2% to Rs 1.6 Tn during the nine months up to September 2022 while gross loans and advances rose by 13.1% to Rs 1.1 Tn. Total deposits recorded a growth of 25.1% to Rs 1.3 Tn during the nine-month period.
HNB’s local currency deposits grew by 17.3% to Rs 993bn while the overall balance sheet growth was partly impacted by the significant devaluation of the currency.
Bank’s Tier I capital ratio and total capital ratio stood at 11.31% and 14.36%, against the regulatory requirement of 9.50% and 13.50%, respectively.