Voting rights of Harry companies owning 18.24% restricted to 10%
The price of gold had declined 28% in 2013 ending a 12-year bullish market for the precious metal adversely affecting gold backed pawning portfolios of banks in South Asia, HNB Chairperson Ranee Jayamaha has said in the bank’s annual report.
"Although many Sri Lankan banks managed to scale down the portfolio through promoting redemption, losses incurred on the auctioning process remained a significant challenge to banks with large pawning portfolios," she said.
The report reveals that the voting rights of three Harry Jayawardena controlled/influenced companies, Milford Exports, Stassen Exports and Distilleries, together owning 18.24% of HNB’s voting shares has been limited to 10% with effect from Mar. 15, 2012, ``as the voting rights of such percentage is deemed invalid from that date.’’
However, it has not been stated that the concerned parties have been required to dispose these shares.
HNB had closed 2013 boosting income both at bank and group levels but seen profit after-tax decline 7% to Rs.7.01 billion for the bank and 3.6% to Rs.7.81 billion for the goup, the results revealed.
The price of gold had declined 28% in 2013 ending a 12-year bullish market for the precious metal adversely affecting gold backed pawning portfolios of banks in South Asia, HNB Chairperson Ranee Jayamaha has said in the bank’s annual report.
"Although many Sri Lankan banks managed to scale down the portfolio through promoting redemption, losses incurred on the auctioning process remained a significant challenge to banks with large pawning portfolios," she said.
The report reveals that the voting rights of three Harry Jayawardena controlled/influenced companies, Milford Exports, Stassen Exports and Distilleries, together owning 18.24% of HNB’s voting shares has been limited to 10% with effect from Mar. 15, 2012, ``as the voting rights of such percentage is deemed invalid from that date.’’
However, it has not been stated that the concerned parties have been required to dispose these shares.
HNB had closed 2013 boosting income both at bank and group levels but seen profit after-tax decline 7% to Rs.7.01 billion for the bank and 3.6% to Rs.7.81 billion for the goup, the results revealed.
Jayamaha said that the bank’s asset base had crossed the Rs.500 billion mark and the non-performing loan ratio of the bank marginally reduced to 3.64% from 3.66% the previous year.
She said she was delighted to propose a final dividend of Rs.7 per share for both voting and non-voting shares on top of an interim dividend of Rs.1.50 per share paid last December giving shareholder a total dividend of Rs.8.50 per share for the year under review.
She welcomed Mr. Jonathan Alles as HNB’s new Managing Director/CEO effective July 2013 succeeding Mr. Rajendra Theagarajah following the latter’s retirement.
Alles joined HNB in 2010 as its Chief Operating Officer and was appointed Deputy CEO in September 2011, thereafter assuming the position of MD/CEO.
"The Board is confident that Jonathan’s leadership qualities, combined with his strategic thinking and extensive experience locally and overseas in the financial services industry, make him the right person to drive HNB to success over the coming years," she said.
"I am confident that his approach and track record of delivering results with his innovative business drive and openness will be valued by shareholders and employees alike."
She said she was delighted to propose a final dividend of Rs.7 per share for both voting and non-voting shares on top of an interim dividend of Rs.1.50 per share paid last December giving shareholder a total dividend of Rs.8.50 per share for the year under review.
She welcomed Mr. Jonathan Alles as HNB’s new Managing Director/CEO effective July 2013 succeeding Mr. Rajendra Theagarajah following the latter’s retirement.
Alles joined HNB in 2010 as its Chief Operating Officer and was appointed Deputy CEO in September 2011, thereafter assuming the position of MD/CEO.
"The Board is confident that Jonathan’s leadership qualities, combined with his strategic thinking and extensive experience locally and overseas in the financial services industry, make him the right person to drive HNB to success over the coming years," she said.
"I am confident that his approach and track record of delivering results with his innovative business drive and openness will be valued by shareholders and employees alike."
Jayamaha expected the proposed Central Bank initiative to consolidate banking and non-banking financial institutions to bring about more resilience in the financial system.
"However, the institutions/entities would be required to deal with the issue of securing necessary finances for the purpose, in addition to the operational challenges involved in the process," she said.
She expressed the view that the reduced interest margins in a low interest environment would force banking institutions to look for alternative sources of income generating activities. Given the intense competition, the success of this search would depend on the effectiveness of the business strategies adopted by banks, she said.
"While technological advances would pave the way for future business growth, challenges involved in the use of technology cannot be ignored. This calls for a collective industry-wide approach to deal with technology based risks, especially cyber crimes," she said.
She saw 2014 as "another challenging year" saying that in a low interest era, the bank needed to improve its fee generating capabilities and look for new revenue streams due to pressure on margins.
"The proposed new taxes and increased regulatory costs would bring in significant impacts on the profitability of the bank," she warned.
"We will look to technology as an enabler; since we believe that understanding our client’s needs and finding a combination of technological solutions has worked well for the bank."
The new MD/CEO, Mr. Jonathan Alles reported that high interest rates had driven depositors towards high yielding fixed deposits and subordinated debt issues offering tax waivers and liquidity. Notwithstanding this the bank had been able to grow its savings base by 14% through focused marketing communication and a series of regional activities in the savings space.
"We were successful in containing our NPA ratio to 3.64% against an industry average of 5.6% from continuous and concerted efforts through aggressive recoveries, active monitoring and prudent lending," he said.
Alles also said that HNB had identified their top 100 personnel "who will be coached and given the necessary exposure to develop as the future leaders of the bank."
He also reported that during the year under review they had raised USD 49 million on very attractive terms from China Development Bank towards longer term project financing.
The state sector and the Distilleries/Stassen group are major shareholders of HNB where SLIC the top voting shareholder with 14.92% of the voting capital followed by the EPF (9.97%), Milford Export Ceylon Ltd (8.09%), Mr. S.E. Captain (7.42%) and Stassen Exports (7.01%).
"However, the institutions/entities would be required to deal with the issue of securing necessary finances for the purpose, in addition to the operational challenges involved in the process," she said.
She expressed the view that the reduced interest margins in a low interest environment would force banking institutions to look for alternative sources of income generating activities. Given the intense competition, the success of this search would depend on the effectiveness of the business strategies adopted by banks, she said.
"While technological advances would pave the way for future business growth, challenges involved in the use of technology cannot be ignored. This calls for a collective industry-wide approach to deal with technology based risks, especially cyber crimes," she said.
She saw 2014 as "another challenging year" saying that in a low interest era, the bank needed to improve its fee generating capabilities and look for new revenue streams due to pressure on margins.
"The proposed new taxes and increased regulatory costs would bring in significant impacts on the profitability of the bank," she warned.
"We will look to technology as an enabler; since we believe that understanding our client’s needs and finding a combination of technological solutions has worked well for the bank."
The new MD/CEO, Mr. Jonathan Alles reported that high interest rates had driven depositors towards high yielding fixed deposits and subordinated debt issues offering tax waivers and liquidity. Notwithstanding this the bank had been able to grow its savings base by 14% through focused marketing communication and a series of regional activities in the savings space.
"We were successful in containing our NPA ratio to 3.64% against an industry average of 5.6% from continuous and concerted efforts through aggressive recoveries, active monitoring and prudent lending," he said.
Alles also said that HNB had identified their top 100 personnel "who will be coached and given the necessary exposure to develop as the future leaders of the bank."
He also reported that during the year under review they had raised USD 49 million on very attractive terms from China Development Bank towards longer term project financing.
The state sector and the Distilleries/Stassen group are major shareholders of HNB where SLIC the top voting shareholder with 14.92% of the voting capital followed by the EPF (9.97%), Milford Export Ceylon Ltd (8.09%), Mr. S.E. Captain (7.42%) and Stassen Exports (7.01%).
The report also says that an unnamed entity has been removed from the register of shareholders with effete from August 19, 2010 on a direction by the Central Bank but has not explained the reason for such removal nor disclosed what will follow. In previous instances the sale of such unregistered shares has been permitted.
The directors of the HNB are: Dr. Ranee Jayamaha (Chairperson), Mr. Jonathan Alles (MD/CEO), Ms. M.A.R.C. Cooray (Senior Director), Dr. W.W. Gamage, Dr. L.R. Karunaratne, Mr. L.U.D. Fernando, Mr. Sujeewa Mudalige, Ms. D.S.C. Jayawardena and Mr. Rusi S. Captain.
www.island.lk
The directors of the HNB are: Dr. Ranee Jayamaha (Chairperson), Mr. Jonathan Alles (MD/CEO), Ms. M.A.R.C. Cooray (Senior Director), Dr. W.W. Gamage, Dr. L.R. Karunaratne, Mr. L.U.D. Fernando, Mr. Sujeewa Mudalige, Ms. D.S.C. Jayawardena and Mr. Rusi S. Captain.
www.island.lk
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