MONETABRIEF – Profits of Sri Lankas Hatton National Bank group fell 4.6 percent to 10.53 billion rupees in the September 2026 quarter, as higher impairment charges and operating expenses offset growth in interest and fee income, interim accounts show.

HNB reported earnings of 18.24 rupees per share for the quarter, down from 19.12 rupees a year earlier.

For the nine months, earnings were 56.11 rupees per share on total profits attributable to shareholders of 32.39 billion rupees, which fell 3.2 percent.

Sri Lanka's economy is recovering from a currency collapse engineered by the central bank using both monetary and exchange rate policy.

The central bank dishonored its inflated note issue (excess liquidity) created by monetizing balance of payments surpluses, departing from previous techniques of debasing the rupee.

Macro-economists also inflated the note issue executing buy-sell swaps with banks, which was a technique developed in a 2018 currency collapse.

The buy sell swaps also allow banks to give loans out of line with current deposit, creating an external imbalance when the new notes are given for credit which generate imports.

The mis-targeted rates were corrected in May but the rupee debasement was not corrected, which leads to loss of disposable income and sharply appreciated, capital costs for people who were planning projects.

HNB group net interest income grew 24.8 percent to 36.36 billion rupees, with interest income growing 26.1 percent to 76.80 billion rupees and interest expenses growing 27.4 percent to 40.44 billion rupees.

Net fee and commission income grew 14.9 percent to 7.51 billion rupees.

The group recorded impairment charges of 1.59 billion rupees in the quarter, compared with a reversal of 2.09 billion rupees a year earlier.

Operating expenses rose 18.5 percent to 27.28 billion rupees. Profit before income tax fell 4.9 percent to 17.74 billion rupees, while income tax expenses fell 4.8 percent to 6.74 billion rupees.

For the nine months, group net interest income grew 23.7 percent to 103.10 billion rupees, while net fee and commission income grew 22.4 percent to 21.55 billion rupees.

Gross loans and advances grew 20.5 percent to 1.92 trillion rupees by end September 2026, from 1.59 trillion rupees at end December 2025.

Deposits grew 12.9 percent to 2.28 trillion rupees from 2.02 trillion rupees at end December 2025.

Debt and other financial instruments held at amortised cost grew 3.0 percent to 705.14 billion rupees.

At bank level, gross impaired loans (Stage 3) to total loans fell to 4.12 percent at end September 2026, from 4.56 percent at end December 2025.

Net impaired loans to total loans stood at 1.09 percent, unchanged from end December 2025.

Impairment coverage of Stage 3 loans stood at 73.46 percent, down from 75.97 percent at end December 2025.

Gross assets grew 12.1 percent to 2.96 trillion rupees.

(Colombo/Nov13/2026)