HNB Grameen posts pre tax profit growth of 27% for 6 months surpassing Rs. 1 b

Post tax profits grew  by 29% to Rs. 674 m

HNB Grameen a dynamic and fast growing finance company who pioneered microfinance in Sri Lanka reported a remarkable performance during the first half of 2016. For the period under review, the company’s pre-tax profits grew by 26.64% to Rs. 1,080 million from Rs. 852 million. The post-tax profits increased by 28.6% to Rs. 674 million from Rs. 524 million in the corresponding period of the previous financial year. 

Net Interest income grew by 27.16% to Rs. 1.7 billion from Rs. 1.3 billion in the previous six months while revenue grew by 33.3% to Rs. 2.7 billion from Rs. 2 billion in the similar period last year. The company’s loans and advances grew by 50% to Rs. 11.9 billion from Rs. 7.9 billion. HNB Grameen’s NPA ratio increased marginally to 1.12%. This increase was due to the highly competitive market environment, slowing economy, an exponential growth experience in credit. 

While commenting on the mid-year performance of its financial year, HNB Grameen Chairman and Hatton National Bank PLC Managing Director/CEO Jonathan Alles had this to say: “We are pleased to announce the completion of a successful first half for HNB Grameen, which has been in the forefront of micro finance in the Country touching the lives of many rural Sri Lankans. During the last 12 months we have grown our loan book by 50% providing financing needs to many thereby helping them improve their livelihood.  The company’s strategic plan up to 2020 is being currently deliberated giving emphasis to the ability of the micro finance industry to provide inclusive finance and enhance the lives of rural population. HNB Grameen is well positioned to invest in technology and people to further enhance our leadership position in the industry.”

HNB Grameen throughout its tenure of operation has generated a robust growth in its financial performance. The company’s deposit base grew by 36.19% to Rs. 11.8 billion crossing the Rs. 10 Billion mark in the period of review, while savings deposits increased by 53.39% to Rs. 1.9 billion from Rs. 1.2 billion in the similar period affirming the trust amongst our depositors. During the year the company repositioned the Yalu Savings with the introduction of attractive gift schemes to inculcate and encourage the savings habits of the young generations. 

HNB Grameen Managing Director/CEO Chaminda Prabhath stated, “I am happy with the steady progress the company has made in terms of profits and revenue. This was possible due to some of the strategic initiatives taken during the previous year such as a new core banking system which improved the operational efficiencies of the company and the diversification of the product range coupled with the strong HNB brand supported the company in posting a healthy financial performance. The year 2016 has already shown great promise towards achieving our vision, I am confident my team will drive the company towards greater success.” 

The company has identified and understood that the biggest strength lies in its people. HNB Grameen ensures that staff is adequately trained in order to optimise levels of customer service. The company recognises that its success depends on the continued support of its workforce, their commitment, hard work and loyalty.

During the period under review, HNB Grameen has enhanced its focus on the SME sector, personal loans and leasing. Leasing which was the new addition to the company’s portfolio has achieved momentous growth during the last six-month period. Leveraging on the widespread ATM network of its Parent Company HNB, HNB Grameen launched its ATM Card to provide improved access and convenience to its 300,000 plus customer base. 

Although a profit making organisation, HNB Grameen continues to direct its key focus on the upliftment and well-being of local communities to be the trusted partner especially within the rural areas of the country. The company provides training for customers on financial management to enhance their knowledge in achieving sustainable growth in their businesses. The company’s long term vision is to ‘create visible change in the people we serve’ which will have a positive effect in the national economy. 

The financial year 2016/17 is a year of consolidation. HNB Grameen intends to enhance the quality of its loan portfolio whilst managing its NPL’s with the support of better MIS and field staff in effective recovery mechanism. One of the key challenges for the company is the increase in cost of funds and hence aggressive strategies are in place to build the low cost fund base. They will continue to increase our product range to cater to our existing and new clients. HNB Grameen’s ability to leverage on the synergies of its parent, HNB is a positive for the former’s operations, a means to grow its product portfolio further and enhance its value proposition as the leading and preferred finance solution provider.