HNB Group recorded a PAT of Rs 23.7 bn growing by 26% YoY, while the Bank’s Profit After Tax increased by 34% YoY to Rs 22.2 bn for the nine months ended September 2024.
Decline in AWPLR by nearly 50% compared to last year and remaining at an average level of 10% for the first nine months directly reflected in the loan yields as the loan book repriced at lower rates leading to a 25% decline in Gross Interest Income for the period. The Interest Expense also recorded a 29% drop in line, supported by the strong growth in CASA deposits. The resultant NII for the period was recorded at Rs. 68.5 bn, reflecting an 18% YoY contraction.
Bank’s efforts to minimise the impact of interest rate volatility, resulted in a 10% YoY growth in Net Fee and Commission income despite trade income being relatively lower compared to the previous year with the normalising of the trade tariff to pre-crisis levels.
The net stage 3 ratio improved to 3.32% while the stage 3 provision coverage ratio improved to 60.50%, during the quarter, compared to 4.09% and 56.08% recorded in 1H 2024. The total impairment charge for the nine months amounted to Rs 3.2 bn, compared to Rs 32.4 bn for the corresponding period in 2023. The impairment charge for the previous period included an amount of Rs 25 bn on account of Bank’s investments in International Sovereign Bonds (ISBs).
With the agreement on the external debt restructuring, in line with the industry practice, the Bank maintained its provision cover of 52% on the investments in ISBs. This together with the positive movement in stage-wise loans, led to a significant reduction in the impairment charge for the period.
As of September 30, 2024, the Bank’s gross loans and advances which saw a drop in the first quarter recorded a net growth of Rs 91.1 bn since, reaching Rs 1.1 tn. The Bank’s deposit base continued to grow significantly, reaching Rs 1.62 tn, driven by an increase of Rs 79.9 bn in Rupee CASA over the nine months of 2024. This has elevated the Rupee CASA ratio to 35.8% from 31.8% in December 2023.
HNB’s Tier I and Total Capital Adequacy Ratios stood at 15.51% and 20.01% against the minimum statutory requirements of 9.5% and 13.5%. The tier II ratio was further strengthened during the quarter, by the successful issuance of Basel III compliant subordinated debentures, amounting to Rs 12 bn. HNB continued to maintain a strong liquidity position with an all currency Liquidity Coverage Ratio of 297.39%, against the minimum statutory requirements 100%.
