ECONOMYNEXT - Sri Lanka's Hatton National Bank is expecting to grow its loan portfolio 15 percent in 2016, driven by small and medium enterprises and personal banking, slowing from 26 percent last year, officials said.
HNB grew its loan book 26 percent with strong growth in corporate loans for working capital, projects and dollar denominated loans, Chief Executive Jonathan Alles told an analysts forum.
The bank had also loaned about 100 million in dollar loans including to Maldives based firms in partnership with other lenders, he said.
The margins in dollar loans to Maldives were higher than in Sri Lanka and closer to 7 percent, he said.
In 2015 the loans to customers grew 26 percent to 498 billion rupees with leasing vehicles also picking up sharply from 24 to 40 billion rupees.
Alles said car leases have already slowed, but they were seeing a pick-up in housing loans.
With higher salaries to state workers and a planned tax cut, increasing disposable income, there was also greater potential for personal loans.
Chief Operating Officer Dilshan Rodrigo said the bank was expecting 15 percent loan growth in 2016, with corporate loans slowing but SMEs and personal banking segments accelerating.
Margins were better in SME loans but they were the most risky with the highest defaults, he said. Corporate loans where margins were thin, had the lowest defaults, he said.
Personal loans fell in between.
The bank was also seeing growth in its micro lending.
Alles said the bank was gradually boosting its fee based income becoming active in trade services and also digital delivery.
The bank had invested in digital infrastructure and was able to re-deploy staff to sales, keeping overall costs down, Alles said.
The bank's cost-to-income ratio was about 46 percent and they were hoping to bring it down further. Centralized credit approvals had also reduced staff costs, he said.
HNB grew its loan book 26 percent with strong growth in corporate loans for working capital, projects and dollar denominated loans, Chief Executive Jonathan Alles told an analysts forum.
The bank had also loaned about 100 million in dollar loans including to Maldives based firms in partnership with other lenders, he said.
The margins in dollar loans to Maldives were higher than in Sri Lanka and closer to 7 percent, he said.
In 2015 the loans to customers grew 26 percent to 498 billion rupees with leasing vehicles also picking up sharply from 24 to 40 billion rupees.
Alles said car leases have already slowed, but they were seeing a pick-up in housing loans.
With higher salaries to state workers and a planned tax cut, increasing disposable income, there was also greater potential for personal loans.
Chief Operating Officer Dilshan Rodrigo said the bank was expecting 15 percent loan growth in 2016, with corporate loans slowing but SMEs and personal banking segments accelerating.
Margins were better in SME loans but they were the most risky with the highest defaults, he said. Corporate loans where margins were thin, had the lowest defaults, he said.
Personal loans fell in between.
The bank was also seeing growth in its micro lending.
Alles said the bank was gradually boosting its fee based income becoming active in trade services and also digital delivery.
The bank had invested in digital infrastructure and was able to re-deploy staff to sales, keeping overall costs down, Alles said.
The bank's cost-to-income ratio was about 46 percent and they were hoping to bring it down further. Centralized credit approvals had also reduced staff costs, he said.
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