HNB group PAT grows 42% in 1H

• Group assets cross Rs. 2.5 t
• Advances growth in Q2 exceeds Rs. 100 b 
• Deposits grow by over Rs. 140 b in Q2 
• Asset quality continues to improve, with net Stage 3 ratio at 1.59%

Chairman Nihal Jayawardene

Managing Director and CEO Damith Pallewatte

Hatton National Bank (HNB) said yesterday that group Profit After Tax (PAT) recorded a growth of 42.5% to Rs. 23.16 billion in the first half of 2025, while the bank PAT rose by 37.9%, reaching Rs. 21.19 billion.

With interest margins being under pressure, the bank’s Net Interest Income remained broadly stable at Rs. 45.6 billion during 1H of 2025, the bank said in a statement. “The 11.3% year-on-year (YoY) drop in interest income amid lower interest rates, despite the strong loan book growth, was offset by the 18.7% YoY drop in interest expenses, aided by strategic initiatives to strengthen Current and Savings Account (CASA) base.”

HNB PLC Chairman Nihal Jayawardena said: “I’m pleased to share our performance for the first half of 2025, a reflection of the unwavering commitment of our Hatna family and the enduring trust our valued customers continue to place in us.” 

“The successful completion of the Fourth Review under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) reinforces macroeconomic stability. As a Domestic Systemically Important Bank, HNB remains a trusted partner in progress, committed to fostering inclusive growth and uplifting communities across the nation,” he added.

Net Fee and Commission Income recorded a notable YoY growth of 19.7%, primarily driven by increased card usage and a significant surge in digital transactions. Additionally, exchange income surged to Rs. 2.8 billion, reversing a loss of Rs. 1.3 billion recorded in the corresponding period of 2024, largely attributable to the depreciation of the Sri Lankan rupee.

Asset quality continued to strengthen during the quarter, supported by the bank’s resilient risk management framework, prudent underwriting and extensive recovery efforts. This progress was reflected in a favourable shift in the Stage 3 portfolio, and an impairment reversal of Rs. 5.1 billion, compared to the impairment charge of Rs. 1.5 billion recorded in the same period last year. Consequently, the Net Stage 3 ratio improved to 1.59% from 1.88% as at December 2024. Meanwhile, the Stage 3 coverage ratio remained strong at 74.88%.

HNB PLC Managing Director and CEO Damith Pallewatte said: “Our performance during the first half of the year stands as a testament to HNB’s innate strength, agility, and strategic focus. While focusing on inclusive growth with the improvement in the operating environment, we continued to accelerate our digital journey by embedding capabilities that elevate customer experience, enhance operational efficiency, and unlock new growth opportunities.”

“This approach has driven meaningful growth across our core businesses, positioning HNB as a future-ready financial institution. Our investments during the year in platforms such TradeX for trade finance and the enhanced digital app with features such as trilingual access, payments to government institutions and instant cash-backed loans, are enabling us to serve our customers with greater speed, simplicity, and inclusivity. As we move forward, our strategic priorities remain clear: to lead in digital innovation, deepen customer relationships, and deliver sustainable value to our stakeholders,” Pallewatte added.

As at end of June 2025, the asset base of the group surpassed Rs. 2.5 trillion, reflecting a 13.7% growth during the six-month period. This growth included a Rs. 137.6 billion increase in net loans and advances of the group, while the deposit base grew by approximately Rs. 160 billion during the first half of the year, reaching Rs. 1.9 trillion. 

During the period, HNB continued to maintain strong capital buffers, with Tier I and Total Capital Adequacy Ratios at 18.42% and 22.46%, respectively, well above the regulatory minimum requirements of 9.5% and 13.5%. The bank also sustained a strong liquidity position, evidenced by an all currency Liquidity Coverage Ratio of 271.54%, significantly exceeding the minimum regulatory threshold of 100%.