HNB Grameen PAT tops Rs. 1 billion for the first time

Pioneers in microfinance HNB Grameen today announced a stellar performance for the financial year ended 2015/16 with all key performance indicators showing strong year-on-year growth.

The company’s key operating results recorded the highest ever profitability in the history of the company, achieving a profit after tax of Rs. 1.11 billion, a 108% increase over the previous year. The company’s profit before tax also grew exponentially by 122% to Rs. 1.82 billion from Rs. 819 million earned last year. The total revenue of the company recorded a 58% growth, while net interest income also mirrored this trend recording a 66% increase.

These results were possible through the adoption of several key strategies which included growing the company’s savings portfolio, increasing advances and tenaciously managing its non-performing assets ratio (NPA), focusing on fee based income growth, and new product diversification including the introduction of leasing services and loan products for small sector enterprises. 

The results also reflect the company’s focus on prudential cost management, supported by a strong digitisation effort, including a comprehensive IT platform, a new core banking system, and introduction of POS machines. These enabled the company to deliver greater operational efficiencies.

The company’s total assets recorded a 43% growth to Rs. 14.38 billion, whilst loans and advances rose by 60%. The company’s deposit base grew by 38% to cross Rs. 10 billion and other income increased by 52% while savings recorded a growth of 56% for the year. The granting of a National Long-Term Rating of ‘A (lka)’ with a ‘Stable Outlook’ by Fitch Ratings in 2015 boosted customer confidence in the company and helped garner corporate customers who invested in the company’s deposit products.

Speaking about the performance of the company for the financial year 2015/16, Jonathan Alles, Chairman of HNB Grameen and Managing Director/CEO of Hatton National Bank PLC, said: “We are extremely delighted to announce the outstanding performance of HNB Grameen during the year 2015/16.  With the synergies formed through the association with HNB, we have ‘grown together stronger’ and we comprehend that the ‘possibilities are bigger’ for us in the future.  As such, we remain focused and committed to continue our journey towards reaching the pinnacle.”

Commenting on the performance B.M.D.C. Prabhath, the Managing Director/CEO of HNB Grameen said: “One of the key priorities for the financial year was to top the Rs. 1 billion mark and we had employed several effective strategies to deliver this remarkable financial performance. I would like to thank our Chairman, Deputy Chairman and the Board of Directors for their guidance and support and our staff for their unstinted commitment which enabled us to achieve this performance. I would also like to humbly thank our customers and other stakeholders who made this a reality. Our journey does not end here and the company will strive to achieve greater heights in the future.”

In other financial indicators, HNB Grameen’s cost to income ratio significantly improved to 43%, while return on equity increased to 61%. The company has continuously focused on managing its NPA which reflected an exceptional non-performing assets ratio of 0.881% when compared with the industry ratio of 6%. The company’s earnings per share also recorded a steady growth of 110%. 

HNB Grameen significantly enhanced its reach this year, increasing its number of service centres from 11 to 21 for the year under review. This move helped the company grow its lending activities and broaden its client base by 15% during the year. The company also declared a dividend of 17% for the first time in its history and plans to list the company in the Colombo Stock Exchange by end 2016.

HNB Grameen is a subsidiary of Hatton National Bank PLC (HNB). HNB has been recognized by the prestigious ‘Asian Banker Magazine’ as the ‘Best Retail Bank in Sri Lanka’ on eight occasions and is the first local Bank in Sri Lanka to receive an international credit rating on par with the sovereign from Moody’s Investor Services. HNB’s national long term rating of AA-(lka) has also being affirmed by Fitch Ratings Lanka Ltd. recently.