LMD 100 Q&A

RANK 78

Corporates are increasingly focusing on sustainability: adopting environmental, social and corporate governance (ESG) frameworks to attract international investors

Q: What is the contribution you believe your organisation has made to the industry and the wider economy?

A: HNB Finance plays a pivotal role in empowering Sri Lanka’s small and medium-sized enterprises, and low-income individuals, by offering essential access to credit and financial services.

We foster entrepreneurship through microfinance, which is a key driver for job creation and economic growth.

Our commitment to economic inclusion has allowed us to extend financial support to underserved and rural communities, enabling them to participate actively in the economy and drive growth at the grassroots level.

Financial literacy is promoted amongst clients, ensuring they can make well-informed financial decisions.

Our investment in key economic sectors such as agriculture, construction and services has a direct impact on Sri Lanka’s economic fabric.

On the digital front, our digital transformation has made financial services more accessible, providing customers with streamlined processes and efficient mobile and online platforms that enhance the overall customer experience.

At HNB Finance, we pride ourselves on setting benchmarks in service quality and customer engagement, sparking healthy competition and driving innovation in the financial services industry.

Chaminda Prabhath
Managing Director
CEO

Q: How ready and geared is the corporate sector to drive growth while overcoming past challenges?

A: Corporates are increasingly focusing on sustainability: adopting environmental, social and corporate governance (ESG) frameworks to attract international investors, and investing in renewable energy.

Our sector is embracing digital transformation to enhance efficiency, expand market reach and foster innovation – with growing support for the startup ecosystem.

In terms of global competitiveness, businesses are prioritising export diversification and working to restore investor confidence through transparent governance and political stability.

Talent retention and upskilling are also vital to meet the demands of emerging industries.

Q: What are your company’s main goals and objectives for the financial year 2024/25?

A: Our primary goals are centered on innovation, efficiency and empowerment. We are committed to expanding our range of financial solutions – including gold loans, leasing, fixed deposits and tailored savings products – to meet the evolving needs of our diverse customer base.

We are focused on driving technological integration, enhancing our digital platforms to improve customer access and streamline operations. Operational excellence and disciplined risk management remain top priorities, enabling us to sustain profitability despite challenges in the market.

And we aim to empower underserved segments by supporting entrepreneurship and financial independence through targeted lending solutions.

Lastly, we are deeply committed to building sustainability into our operations, integrating corporate social responsibility initiatives that contribute to Sri Lanka’s economic recovery and resilience.

Q: How is your organisation faring against the backdrop of the macroeconomic milieu?

A: HNB Finance has maintained a solid performance through strategic diversification and operational efficiency.

However, rising inflation and interest rates have pushed up borrowing costs for customers, affecting loan demand and repayment capacity. Regulatory pressures, stemming from the ongoing economic reforms, have required us to adapt quickly.

Despite facing pressure on our unsecured portfolio, we shifted focus to secure industry core products, thereby managing risk effectively.

The drop in interest rates led some customers to seek alternative investment opportunities but we were able to safeguard our fixed deposit base through the strength of the HNB brand and a robust liquidity buffer.

Our diversified product offerings including leasing and gold loans allowed us to mitigate risk, and cater to both urban and rural customers.

And our investments in digital transformation, such as mobile banking and online account management, have improved customer access to services, positioning us well in an increasingly digital market.

By leveraging Hatton National Bank’s (HNB) vast branch and ATM network, our ability to reach underserved communities across Sri Lanka has expanded, positioning us well for the future.

Q: Your wish list for Budget 2025 is…?

A: A new leasing act is the need of the hour as the current leasing policies have led to significant misinterpretation especially regarding the rights of lenders. Due to current policy misinterpretations, there’s a misconception that defaulters will be protected, which severely impacts our business.

The unregulated microfinance sector requires monitoring to ensure fair play as many players are operating without adhering to proper rules and regulations, which disrupts the market and undermines the true purpose of microfinance.

REVENUE (RS. M)
14,909

REVENUE CHANGE
9%

PROFIT AFTER TAX (RS. M)
3%

TOTAL ASSETS (RS. M)5
3,458

SHAREHOLDERS’ FUNDS (RS. M)
5,652

MARKET CAP (RS. M)
6,254

EARNINGS PER SHARE (RS.)
0.36

PRICE EARNINGS RATIO
12.23

EMPLOYEES
2,004

Telephone: 2176262 | Email: info@hnbfinance.lk | Website: www.hnbfinance.lk