JKSB Quarterly Highlights_Hatton National Bank PLC (HNB)_3QCY17
HNB achieved a 10% YoY increase in total operating income during the quarter as the healthy increases experienced in NII (+15% YoY) and net fee & commission income (+22% YoY) was partially offset by a sharp increase experienced in net loss from trading (-165% YoY). Consequently, steep increases in impairment charges caused net operating income to grow at a marginal rate of 4% YoY. Although the growth of total operating expenses was controlled at 9% YoY, the marginal growth rate experienced in net operating profits translated into a flat earnings growth of 1.4% YoY during the quarter.
Following the equity capital infusion from the rights issue in 3Q, HNB’s (Bank) Tier 1 and Total capital adequacy ratios currently stand at 12.91% and 16.42% which is well above the current applicable minimum requirements of 7.75% and 11.75% respectively.
Main Implication from Budget 2018: It was proposed to charge a special levy for debt repayment at the rate of 0.02% on the total transaction made through banks with effect from 01st April 2018 (for 3 years). The aggregate amount that is planned to be raised from the banking sector through this proposal is estimated to be Rs.20 bn.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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