In 2008, Hatton National Bank (HNB) became the largest private sector bank in Sri Lanka. It was the result of HNB setting the pace and trends with its innovations for which it won a phalanx of awards confirming its performance and service excellence. As early as 1995 AsiaMoney named HNB 'The Commercial Bank of the Year' hailing it as the flagship of Sri Lanka's banking.
In the following years Lanka Business Review and the National Chamber of Commerce ranked HNB among the most respected institutions. In November 2006 HNB reached international prominence when The Banker magazine of the UK conferred on it the 'Sri Lankan Bank of the Year' award. In 2008, The Asian Banker conferred its coveted 'Excellence Award' on HNB for being the 'Best Retail Bank' in Sri Lanka.
These were HNB's achievements during a tumultuous decade of changing economic and geopolitical scenario in South Asia that also impacted Sri Lanka. HNB rode out the challenging times positioning itself to look for opportunities with prudent business policies and integrating with its stakeholders with flexibility to serve their needs whilst seeking to play a more direct role in the nation's economy by identifying opportunities for sustainable investments. All this was inspired by the bank's long-term vision to play a leading role in the economy of Sri Lanka.
The bank has now positioned itself to play the role desired by all its stakeholders. With the largest network of customer centres spread across the island, and over 100 correspondent banks providing access to the world's major trading centres, HNB offers extensive financial services and products to its stakeholders with diverse needs of the variety of economic activities they are involved in. HNB's success has been its ability to deliver to the widest clientele a vast product portfolio. This profile earned HNB the title of "the flag bearer of modern banking in Sri Lanka" - as recognised by The Banker magazine.
Being the only Sri Lanka bank listed abroad (Luxemburg Stock Exchange), HNB's over-whelming success is also complimented by its expertise in handling trade originating from around the globe. To maximise the benefits of its global relations, HNB revamped its trade banking infrastructure and created a centralised conduit to benefit from the opportunities it offers by using its financial strength and expertise in providing trade processing services at low cost to banks and businesses trading with Sri Lanka. Its links with Pakistan are cemented by close working relationships with 14 top-ranking commercial banks that provide HNB the opportunity to handle bulk of the Sri Lanka-Pakistan trade. Signing of a Free Trade Agreement between Sri Lanka and Pakistan expanded trading opportunities between the markets of the two nations, and along with its Pakistani correspondents, HNB is helping to route its benefits to the trading communities of the two countries.
Clear perception of the evolving international trade scenario and streamlining its trade processing services to optimise resource use as well as gear itself with specialist staff fine-tuned to serve businesses to reap the opportunities offered by FTA was HNB's singular success. Centralising trade services afforded closer monitoring of concentrations and maintaining them within safe limits. This has proved the crucial advantage in the context of risk management in an environment characterised by continuously changing market conditions and fluctuations in the trading sphere.
In offering an extensive range of financial services to cover diverse client needs, HNB faces both financial and non-financial risks, which need expert pro-active management to secure the interest of its stakeholders. Risk management therefore is central; the effort implies clear identification of risks that the bank is exposed to in its activities. HNB's Board of Directors sets the limits to the levels of risks that the bank may accept to undertake. This is a dynamic process that is reviewed periodically in the light of stakeholders' needs and the prevailing economic situation at the time. In consultation with the bank's management, the Board establishes policies, processes and control mechanisms to ensure that risks are managed within defined limits while pursuing the bank's business objectives.
HNB's Board of Directors is the first line in risk management. They define the risk levels that HNB can take. In constant and intensive consultation with HNB's management, the Board establishes policies, guidelines, control structures and a myriad of checks and balances that ensure that risks are contained within prudent limits. The directors are assisted by a number of specialised committees that report to Board members on all aspects of HNB's operations. These are the Asset Liability Management Committee, Risk Committee, Credit Policy Committee and the Treasury Committee, that work closely with one another, and also with HNB's Audit Division to identify strengths and weaknesses, and constantly tweak the system for optimum performance.
Given the impact of globalisation on world economy, its demands as well as the new challenges it has created, HNB strictly follows the Basle Accord-II guidelines for risk management. This includes improving employee skills and IT systems, and providing requisite support infrastructure to fine-tune the bank's delivery capacity and capability corresponding to changing needs of business and industry as the nation interacts and gradually integrates with the world economy.
In today's world, private enterprises form the pillars of the real economy of nations. Though they do not actually govern a nation, collectively they have a crucial role to play since together they form the economy, and are directly involved in all aspects of productivity and therefore exercise considerable influence over national economies. It is therefore imperative for enterprises to play a responsible and integral role benefiting common consumers and the economy of the country.
HNB takes these nation-maker roles very seriously, and from its inception, has striven to contribute and play a central role in the economy. Believing firmly that its existence depends on the success of its customers, HNB has gone out of its way to cater to the diverse opportunities that each customer symbolises. It has developed an innovative range of products and services to cover every need in the island - in the process creating ground breaking banking products and services suited to the people, with the larger interests of the bank's role and the national economic needs always in mind.
Some of HNB's revolutionary initiatives in the recent past were the Shanthi Home Loans, Pathum Vimana, Singithi Saving Accounts and Gami Pubuduwa (Village Reawakening). The unique feature of Shanthi Home Loans is that these loans cater to customers of every income level, extending loans for even very low cost homes. Pathum Vimana's specialty is creating national wealth by making savings very lucrative, which are invested productively in commercial ventures, and Singithi Accounts inculcate saving habits amongst school children through savings centers that have been opened at schools all over the country.
Gami Pubuduwa loans remain a success story in their own unique right. Launched as far back as 1989, this scheme made micro-finance available for villagers to lift their lives through productive activity. Not only was finance provided, but was accompanied by all important advice on how to utilise funds for increased productivity, efficient use of capital, and training of farmers in modern techniques, all with a view to lift more people above the poverty line to live dignified lives. This scheme has proven itself, and has created thousands of self-employment opportunities and continues to gain momentum all over Sri Lanka.
HNB therefore is more than a commercial bank. It is a national institution in its own right, blazing a trail of unprecedented rise in national productivity, enriching lives and helping to build a more progressive nation, credibly, all within the limitations set out by the risk management guidelines that have proven sustainable into the future.