Sri Lanka’s HNB expects growth in credit in 2020 as credit slowdown and economic growth accelerates
Chief Operating Officer of Sri Lanka’s Hatton National Bank (HNB), Dilshan Rodrigo has reportedly said that the bank is expecting 12-14 percent loan growth in 2020 as the banking system recovers from a credit slowdown and economic growth is expected to accelerate.
In the nine-months to September 2019, HNB’s loans and advances had contracted 4 percent to Rs. 749 billion as Sri Lanka recovered from a currency collapse in 2018, the local media has reported.
HNB is identified as Sri Lanka’s second largest private bank by assets and the group assets totaled Rs. 1,161 billion by September.
The Bank’s profits are also expected to improve on the back of a corporate income tax from 28 percent to 24 percent, lifting of a so-called debt repayment levy, media report have further noted.
A determination by Sri Lanka’s revenue office that government dollar securities styled Sri Lanka Development Bond would again be tax free would also help the bank from 2019 onwards, reports have added.
Sri Lanka’s banks are now trading at earnings multiples that are at 10-year lows, equity researchers at First Capital, a Colombo-based investment house has said.
OSL take:
The expansion in credit is indicative of the expansion of business and economic activities in Sri Lanka. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region. Foreign businesses/investors could therefore explore business opportunities in Sri Lanka.
| Article Code : | VBS/AT/26022020/Z_10 |