HNB reports strong first-half growth with Rs 224 Bn increase in advances
- Balance Sheet crosses key milestones amid strong business growth
- Loan book grew by 15% in 1H 2026
- Asset Quality holds firm with Net Stage 3 at 1.17%
- Liquidity and Capital Strength continue to support Growth
- Named Best Bank for Large Corporates by Euromoney for a second consecutive year
Navigating a period of economic volatility and inflationary pressures, HNB Group reported a Profit After Tax (PAT) of Rs 22.5 Bn for the six months ended June 2026, while the Bank recorded a PAT of Rs 23.1 Bn for the same period. The performance reflected strong balance sheet growth, with advances increasing by Rs 224 Bn and deposits by Rs 138 Bn during the first half of the year, while maintaining strong asset quality with a Net Stage 3 ratio of 1.17%.
The Bank's Net Interest Income increased by 21% YoY to Rs. 55.2 Bn and the Net Interest Margin (NIM) increased to 4.40% from 4.26% in 2025 supported by strong lending momentum, with the significant increase in interest income from loans and advances offsetting funding cost pressures stemming from the evolving interest rate environment.
Further strengthening the Bank's non-interest income streams, net fee and commission income increased by 30% YoY, driven by rising digital banking activity, increased card-related transactions, and strong contributions from the transaction banking and leasing businesses. The combined impact of strong growth in net interest income and non-interest income resulted in a 27% YoY increase in Total Operating Income to Rs. 76.7 Bn. While operating expenses increased moderately during the period, largely due to higher foreign currency-denominated technology and payment processing costs, the Bank maintained prudent expense management, supporting overall profitability and a lower annualised cost‑to‑income ratio of 34.48% compared to 38.56 % in 2025.
Reflecting the significant expansion of the Bank's lending portfolio during the period, impairment provisions amounted to Rs. 4.1 Bn in 1H 2026, compared to an impairment reversal in the corresponding period of the previous year.
Commenting on the performance, Mr. Damith Pallewatte, Managing Director / Chief Executive Officer of HNB PLC, stated, “Our performance during the first half of the year reflects the consistency of our execution and the enduring confidence our customers place in HNB. Despite a challenging operating environment, we continued to grow our lending and deposit portfolios while maintaining sound asset quality and a healthy capital and liquidity position. This has enabled us to support our customers' ambitions while preserving the financial strength of the Bank.
