Sri Lanka’s HNB Finance Group records over Rs. 500 million net profit
The Morning: Reflecting an exceptional turnaround in its financial performance from a loss last year, Sri Lanka’s integrated financial services provider, Hatton National Bank (HNB) Finance PLC, recorded a group net profit of Rs. 515.6 million for the 2021-22 financial year.
“This impressive and well-rounded financial performance during a highly challenging period serves as a resounding endorsement of the stability, resilience and growth prospects of HNB Finance,” stated HNB Finance PLC Chairman Dilshan Rodrigo. “Our well-diversified portfolio, the significant synergies stemming from the merger with Prime Finance and the strength that HNB Finance derives from the backing of HNB PLC and the Prime Lands Group, will strengthen HNB Finance in its growth journey.”
Group Net Interest Income and Group Total Operating Income for the period amounted to Rs. 3,903.9 million and Rs. 4,929.9 million respectively. Group Profit Before Tax for the year was Rs. 615.9 million.
Emphatically overcoming severe macroeconomic challenges, in a momentous year for the company – during which it acquired Prime Finance PLC – HNB Finance saw significant improvement in its asset quality and business performance indicators for the financial year ended 31st March 2022.
All business lines of HNB Finance were profitable during the review period, driven by growth in disbursements and success in cost optimisation efforts – introduced in-line with the prevailing economic conditions. HNB Finance Group’s Loan-to-Deposit ratio for the year was 123.36%, which reflects the Group’s strong liquidity position.
“While our diversified portfolio will assist us in navigating the current economic challenges, we remain strongly committed to supporting micro, small and medium enterprises (MSMEs),” HNB Finance PLC Managing Director/CEO, Chaminda Prabhath said. “These vibrant businesses are at the heart of the engine of economic growth and despite obstacles, we will support them through a co-ordinated initiative encompassing financial literacy, business revival and digital transformation.”
HNB Finance also benefits from a well-diversified portfolio – which includes microfinance, auto and micro-leasing, gold loans and property and business loans.
After obtaining shareholder approval, HNB Finance concluded its merger with Prime Finance in May 2022 and the companies are now operating as a single entity under the HNB Finance brand. Significant synergies are expected from the amalgamation, which also further strengthened the HNB Finance Group’s Total Asset Base to Rs. 46.56 billion as at 31 March 2022. The strengthening of HNB Finance’s balance sheet enables better distribution of risks, with the addition of Prime Finance’s asset-backed loan portfolio. The addition of the capable team of Prime Finance, who possesses significant expertise, particularly in spheres such as real estate financing, will also strengthen HNB Finance’s talent pool.
HNB Finance PLC was established in the year 2000 and is licensed as a registered Finance Company by the Monetary Board of the Central Bank of Sri Lanka. Maintaining an extensive islandwide presence across 77 branches, HNB Finance offers a range of exceptional financial services which include Small and Medium Enterprise (SME) Loans as well as leasing, gold loans, housing loans, personal loans, real estate and property loans and savings and fixed deposits facilities. The company holds a National Long-term Rating at “A(lka)”; as affirmed by Fitch Ratings, certified as a Great Place to Work and ranked 57th among Top 100 brands in Sri Lanka by Brand Finance.
The profit recorded by HNB Finance Group shows the growing business in Sri Lanka’s banking and finance sector. The increasing economic activities and expanding opportunities in the country have all increased opportunities in the banking and finance sector. With the country working towards positioning itself as a business destination in the South Asian region, there’s much importance laid on a strong banking and finance sector. Given the growth and profits recorded by Sri Lanka’s banking and finance sector, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka. Foreign financial institutions could also explore investments, partnerships or joint ventures with local financial institutions for further expansion given the country’s growing business potential.
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