Hatton National Bank continued its growth momentum in the 3rd Quarter ended September 2008 by exceeding Rs. 5.0 Bn in operating profit before taxes while post tax profits increased to Rs. 2.56 Bn, which reflects a growth of 47% in post tax profits over the same period in 2007.

Income for the period increased by 27% to 27.0 Bn. with net interest income increasing by 12% to Rs.9.07 Bn. Effect of high interest rates were reflected in the interest income and expenses which grew by 25% and 34% respectively despite moderate growth in the loan book and deposits.

Non interest income improved by 43% during the period mainly from the increase in other income by approximately Rs. 1.0 Bn. significant contribution of the other income was capital gains derived from the sale of two fully owned subsidiaries HNB Securities (Pvt) Ltd, and HNB Stock Brokers (Pvt) Ltd., to the newly formed Acuity Partners (Pvt) Ltd., which is a joint venture with DFCC Bank. Additionally the Bank was in receipt of Dividend income of over Rs. 500 Mn.

Efficient cost management enabled the Bank to maintain the non interest expenses at mere 8% increase, a remarkable achievement considering the high inflationary conditions prevailed during the period.

Banks pre tax and VAT cost to income ratio improved to 53.70% from 59.3% for the period and the pre tax return on average assets to 2.07% from 1.99% in December 2007.

Financial VAT and Corporate taxes increased to Rs. 1.32 Bn. and 1.13 Bn. an increase of 44% and 21% respectively in comparison with the corresponding period in 2007.

Provision for Bad & Doubtful loans reduced by 21% to Rs. 580 Mn. compared to Rs. 733 Mn, in the corresponding period of 2007 mainly due to the bank's decision in 2007 to accelerate the regulatory requirement of 1% general provision of the loan portfolio. The bank is in line to meet the Central Bank regulatory requirement by end 2008 ahead of the dead line 1st quarter 2009. However the gross non performing loans ratio increased to 7.13% from 5.91% in December 2007 due to the redefinition of classification of non performing advances as per the Central Bank guidelines and the prevailing economic conditions.

Balance sheet of the bank grew by 7% during the past 9 months to Rs. 249.7 Bn with the loan book contributing a growth of 4%.

Group turnover increased by 23% to Rs. 28.1 Bn with profit after tax increasing by 19% to 2.14 Bn

HNB was recently recognised by the National Chamber of Commerce Sri Lanka by receiving the overall gold for National Business Excellence 2008 and bagged four more awards in the categories of winner in extra large category, winner in banking and finance sector, winner in excellence in business and financial performance and runner up in excellence in best performance practices.

Commenting on the success and progress of the Bank its’ Chief Financial Officer Mr. Nihal Kekulawela said that the bank has shown conviction and courage to perform against all odds during difficult times and the real test will be to sustain and move forward in a back drop of financial and economic downturn both locally and internationally.