HNB delivers strong 9-month performance

Amid shifting economic dynamics, Hatton National Bank PLC (HNB) has recorded a solid financial performance for the nine months ended September 2026. Group Profit After Tax (PAT) reached Rs. 33.6 billion, while the Bank recorded a PAT of Rs. 33 billion.

Balance sheet expansion during 9M 2026 was a key contributor to the Bank’s performance, with Gross Advances recording a Year-to-Date (YTD) increase of Rs 313.5 billion, equivalent to 20.7% growth. This was complemented by Deposit growth of Rs 251.7 billion, a 12.8% YTD. Amid a higher interest rate environment, the Bank preserved a healthy CASA ratio of 32.0%, supporting a well-balanced funding mix.

The Bank recorded a 23.6% YoY increase in Net Interest Income (NII) to Rs 85.5 billion, while Net Interest margin (NIM) stood at 4.50%. Strong lending momentum drove a 19.7% increase in interest income, which translated into stronger NII growth as interest expenses rose at a comparatively lower rate of 16.6% despite policy-driven rate pressures.

A notable improvement in fee-based income further strengthened the Bank’s revenue profile, with Net Fee and Commission income recording a 25.4% YoY increase to Rs 20.6 billion. Increased card and digital transactions, higher trade finance activity and growth in leasing and other services contributed to the improved performance. Exchange-related income also recorded a notable improvement during the period, reflecting gains from foreign currency position and revaluation movements.

Strong growth across the Bank’s income streams translated into a 22.9% YoY increase in Total Operating Income to Rs 112.7 billion. Total Operating Expenses increased by 13.6%, primarily on account of higher other operating expenses, partly attributable to investments in strategic transformation initiatives. The cost-to-income ratio stood at a well-managed 36.1%.

Strong revenue growth and continued cost discipline drove a 28.8% YoY increase in Pre-impairment Operating Profit to Rs 71.9 billion, highlighting the quality of the Bank’s earnings performance.

Growth in lending portfolio was accompanied by impairment provisioning of Rs 5.3 billion, during the period, compared to an impairment reversal of Rs 7.5 billion in the corresponding period of the previous year. The Bank maintained a Net Stage 3 ratio of 1.09% and a Stage 3 Coverage ratio of 73.46%, highlighting the continued focus on managing credit risk and maintaining the quality of its loan portfolio.

HNB PLC Managing Director/CEO Damith Pallewatte said: “As the domestic economy continued to adjust to evolving economic conditions, HNB delivered a strong financial performance for the nine months ended September 2026. We continued to see healthy growth in both lending and deposits, while maintaining a balanced funding mix and a sound CASA position. As we expanded our business, we remained measured in our approach to impairment provisioning, while maintaining strong capital and liquidity positions. Our focus has been on growing responsibly, managing risks effectively and ensuring that the Bank remains well positioned to support its customers.”