Banking beyond transactions

HNB Managing Director/CEO Jonathan Alles speaks about the crux of HNB’s new corporate communications campaign ‘Banking Beyond Transactions’ which epitomises their philosophy of building relationships. Following are excerpts from the interview: 

Q: HNB has reported impressive results for 2015. Could you elaborate on the performance of the bank?

A: The year 2015 saw HNB surpassing many milestones with profit after tax exceeding Rs. 10 billion and the loan book as well as the deposit base crossing the Rs. 500 billion mark. During 2015, both loans and deposits grew by over Rs. 100 billion, which is the highest ever growth in our history. The dedication of our entire team, aggressive sales drive and enhanced service delivery enabled us to record this exceptional performance despite lacklustre market conditions that prevailed mainly during the first half of the year.

The 26% growth in loans and advances during 2015 was driven by a 30% growth in corporate banking, 25% growth in SME, 65% growth in leasing and 67% growth in personal loans. Despite this strong growth, our NPA ratio improved to 2.43%, which is the lowest over the past few decades due to improved underwriting skills, robust risk management framework and aggressive recovery action.

The bank’s continuous efforts in business process re-engineering were also rewarded with the cost to income ratio improving to 45.9%, the lowest ever recorded by the bank. 

In 2015, we successfully raised $ 185 million from international financial institutions to support the strong balance sheet growth while in March 2016 our subordinated debenture issue of Rs. 7 billion was oversubscribed on the day of opening. 

Q: HNB is one of Sri Lanka’s largest and oldest commercial banks. How would you describe the impact that the bank has had on its customers and society at large?

A: HNB for over 125 years has had an immense and far reaching impact on the lives of generations of Sri Lankans and the development of the nation as a whole.

From our  inception in 1888, where we provided financial solutions to Ceylon’s then burgeoning tea industry, we have today evolved to become a ‘Partner in Progress’ to a very diversified base of customers ranging from micro entrepreneurs to blue chip corporates and high end private banking clients. 

Our retail banking products have enabled many customers to achieve their goals and aspirations throughout different stages of their life, while our long standing partnerships with over 200,000 SMEs and 2,000 corporates have enabled these enterprises which operate in many different sectors to enjoy tremendous growth and add significant value to the economy. HNB is also proud to be the pioneer of financial inclusion in Sri Lanka by way of partnering with more than 250,000 micro entrepreneurs over the past 27 years to graduate to SME level and beyond. 

Over the years, we have also contributed significantly towards realisation of national vision by funding several key infrastructure development projects in the areas of energy, road development, water and health amongst others.

Such profound impact in every sphere of development, whether it is at individual or national level would not have been possible if we simply focused on transactional banking alone. It is our relentless zeal in building long lasting bonds beyond banking which has enabled HNB to be the corporate leader it is today. Our corporate campaign this year embodies this philosophy, ‘Banking Beyond Transactions’.

Q: Can you elaborate on the Beyond Banking Transactions campaign you spoke of?

A: We are a bank that has always placed great emphasis on relationships and our corporate tagline ‘Your Partner in Progress’ is ample testimony to this. We have a rich heritage as the partner that has helped countless millions of Sri Lankans progress and live better, richer lives.  At HNB being a true ‘Partner in Progress’ begins with understanding the true needs of our customers. Then it’s about the service we offer as we have to ensure fast, efficient, accurate and timely delivery of solutions in a friendly manner. Ultimately, it’s about the commitment. We have to stay committed to our customers and their needs. That’s how we take a mere transaction and build a relationship through it. 

This is the crux of our new corporate communications campaign ‘Banking Beyond Transactions’ which epitomises our philosophy of building relationships. It brings forth, how over the years, we as a bank have created innovative banking solutions through our unique understanding of this country and its peoples.

Q: How does your organisation operationalise ‘Banking Beyond Transactions’? In other words, what are the strategies and tactics used by HNB to engage in ‘Banking Beyond Transactions’ and how does HNB standout amongst competition?

A: As I have alluded to, customer service is at the heart of ‘Banking Beyond Transactions’. HNB is hence relentless in its pursuit of achieving unparalleled customer service and setting an unrivalled benchmark in service excellence. Each and every member of the ‘Hatna Family’ is deeply committed to delivering service excellence, building lasting relationships and engaging in banking beyond transactions. In fact our 4,200 plus strong staff comprising one of the best talent pools in the country, is our greatest strength and source of competitive advantage.

Over the recent past, we have invested heavily on improving the total service proposition through cutting edge technology, business process reengineering (BPR) and extensive training on service quality mainly for front line staff. The BPR initiatives implemented over the past couple of years have enabled the bank to release staff from back office operations. These resources have been redeployed productively in the frontline. Simultaneously these BPR initiatives have considerably improved the process efficiency facilitating a faster service delivery. As a result our staff has been able to provide a far superior service, build lasting relationships and enhance the overall customer experience at HNB.

Q: It was mentioned that HNB caters to all segments of the market; how do you differentiate your proposition to these segments?

A: We at HNB serve nearly two and a half million customers from all walks of life. On the retail side our diversified product range serves new borns up to senior citizens while on the business side our clientele ranges from micro enterprises to conglomerates.

Our corporate banking team today, manages the largest corporate banking book in the country. The dedicated and competent team of account relationship managers provides total financial solutions to corporates for any financial requirement in working capital management, trade finance, project finance or treasury management, by seamlessly integrating with cross functional teams. The investments we have made recently in upgrading the electronic banking platform will see us further augmenting our corporate banking proposition in the near future enabling us to provide an unparalleled service.

Over the years, we have delightfully witnessed the migration of so many SMEs in to the corporate world. The relationships we have developed with SMEs have grown beyond mere financial assistance. We have added value to the SME segment by being a true ‘partner in progress’. The partnerships we have entered into with GIZ & DEG Germany to provide technical assistance in Sri Lanka, mark our efforts towards this end. The regionalisation of SME credit has enabled our team to provide a more focused and faster service to our customers. We stay committed to drive the development in this engine of economic growth through our unmatched capability and service delivery.

HNB the ‘Best Retail Bank’ in Sri Lanka as endorsed by the prestigious ‘Asian Banker’ for the eighth time, has over the years shaped the retail banking space in Sri Lanka. The bank has launched several innovative and first to market products and services including Shanthi housing loans, Pathum Vimana the flagship incentivised savings scheme and MOMO the mobile POS device. Our strong focus on digitisation has provided far better choice and convenience to customers. As in the past, even going forward we will continue to exceed customer needs and expectations through our innovative spirit, because we believe in banking beyond transactions.

Through our world renowned Gami Pubuduwa initiative we have uplifted the livelihoods of many Sri Lankan micro entrepreneurs across rural Sri Lanka. Our recent acquisition in Prime Grameen subsequently renamed as HNB Grameen will also contribute significantly towards improving financial inclusion in the Country. The buy-back arrangements we have facilitated with corporates such as CIC and Hayleys ensure a ready market for the produce of micro clients and are testimony to our commitment towards banking beyond transactions.  

Q: We saw HNB launching the New World Banking campaign last year.  Within an ever evolving industry landscape how do you sustain your market position?

A: The customers of the new generation lead an increasingly sophisticated life style and want to be connected on a click of a button. Today with New World Banking, tap on a screen or a click of a button is all that takes to get them to HNB.  The New World Banking campaign which was launched last year strengthened our position as the most technology and future ready bank in the country.

Our customers can reach us any time of the day from anywhere through our fully fledged mobile banking solution, internet banking platform and wide spread network of over 460 ATMs. Over the past year we have added smart ATMs and bill payment kiosks to the network, enabling bill payment facilities not only to our own customers but to non-customers as well. 

The electronic banking upgrade which is currently in progress will see us offering more innovative products and services to suit the changing needs of the customers and solidify our market presence.  

Q: You elaborated on your commitment towards banking beyond transactions. But at the same time HNB is investing heavily into digitisation. Will increased focus on digitisation result in moving away from building relationships?

A: As I’ve mentioned earlier, banking beyond transactions begin with understanding the customer needs. Our insights as well as the analytic tools in place have enabled us to understand customer preferences better than ever before. The investments we have made into digital channels, products and services have been based on this understanding of changing needs. By doing so, we have bridged the gap between the customer and the bank and satisfied the day to day banking needs of the customer in a more convenient manner. This I believe is the creation of the initial bond between the bank and the customer. 

As the customer’s financial needs escalate he has the option of walking in to any one of our 249 branches spread right across the country. The passion with which our well trained staff serves the customers and the enhanced service experience further cementing a lasting relationship.

So in brief, banking beyond transactions and providing more choice and convenience through digital channels go hand in hand.

Q: Finally, how will the ‘Banking Beyond Transactions’ campaign shape the future position and role of HNB within a broader context?

A: Over the past we have been a true partner in progress to many Sri Lankans by building long lasting relationships that transcend transactions. While this is our history, our legacy and our strength, how we serve our customers today will determine how the HNB brand would be perceived tomorrow. As such, our challenge today is to further strengthen this great tradition of partnering with people. 

Our strong team remains ever so committed to live this philosophy of banking beyond transactions and to build stronger bonds with customers. Through this endeavour HNB will play a pivotal role in partnering the progress of Sri Lanka and its citizens in achieving their goals of elevated economic and social status.