HNB unveils 2020 vision

Tuesday, 14 March 2017 00:09 - - {{hitsCtrl.values.hits}}

By Charumini de Silva

Banking on a bullish industry, Hatton National Bank (HNB) yesterday unveiled its vision to achieve strong growth and diversification by 2020 with greater emphasis on digital banking, improving corporate banking and growth in their asset base, which hit Rs. 900 billion last year.

HNB CEO Jonathan Alles told reporters that the bank spent most of 2016 brainstorming on the framework for growth in the next three years and attempting to understand which direction the company should move. He noted that strong internal re-organisation had also played a key role in hammering out a future growth plan for the entity.

“For that we see the importance of growing the balance sheet by growing our Current and Savings Account (CASA) ratio. We don’t see the Fixed Deposit (FD) led model as the ideal way forward although currently there are a lot of FDs coming in and CASA is under threat,” he said.

Alles added that the bank put together nine cross functional teams for the first time in HNB’s history and insisted they were “paramount” to achieving the company’s targets over the next three years.

“For the first time we can say that there is a clear gap between HNB and other private commercial banks. It is not just a few millions but we have crossed it by more than a billion and a half. Net interest for income grew as a function of the interest rates growing up and moderate balance sheet growth. In terms of banking fees, we continue to do well. Tax expenses have gone up but however our PAT has grown by 41.2% to Rs. 15.7 billion.”

Acknowledging that last year was a challenging time for the banking industry, he nonetheless expressed confidence that the sector would grow by 5.29% with HNB aiming for several initiatives within the corporate banking, SME and personal banking segments in order to drive CASA.

“CASA being the most important vertical, achieving success through corporate banking, retail banking, SME driving CASA will give us a lot of push in terms of driving the asset book and healthy margins. Competitive balance sheet and profitability growth, this is what we mean.”

To continue dominating the private commercial banking space, HNB will continue to build its asset quality, which has improved by 200 basis points, emphasised Alles. “Not so long ago we were touching around 4% and today 1.8% and it gives us confidence to aim for a percentage under 1 in the next 3-4 years.”

As with most service-oriented companies, HNB is planning to invest significantly in the digital sphere and has decided to funnel Rs. 2.5 billion into internet banking.

“We clearly want to be the leader in the digital banking sector in Sri Lanka. We have seen a lot of banks in this space doing a lot of good work and we appreciate it. This is the future and all banks should be doing that. Having said that, it is an area that we wouldn’t want to compromise on. For us digital banking means a lot. It is not limited to having the best channels, online support and e-products but also an efficient back-end system secure with the right infrastructure and capacity. I think HNB is leading in this front.”