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H AT T O N
N AT I O N A L
BANK PLC
Annual Report
2022
BUILT
B U ILT FOR
R
RESILIENCEE
At Hatton National Bank, we have always modelled ourselves after principles of excellence,
continuity and progressive growth — characteristics that have enabled us to shape
and transform ourselves to display a spirit of endurance even in the face of seemingly
insurmountable odds.
Our wide-ranging products and strong partnerships with our stakeholders have always
KPURKTGF RQUKVKXKV[ CPF ITQYVJ VJTQWIJQWV QWT URJGTG QH KPƃWGPEG 1WT UWUVCKPCDNG
framework and adaptive strategies have enabled us to remain buoyant even amid
times of turbulence, even as we continue to augment our value proposition to our
stakeholders year after year.
We are armed with the capacity to serve; and as in the past, we pledge to
employ the resources at our disposal to maintain our momentum; driven
by an overarching purpose to serve as the people’s partner and fuel
the nation’s development. Today, as we look to the future with a
renewed purpose, we are committed to remain at the heart of
Sri Lanka’s journey towards revival.
Ours is the promise of progressive growth both here

and beyond, strengthened by a time-tested
structure of strength and adaptability.
Hatton National Bank. We’re

built for resilience.
The nautilus is an entity that has lasted across millennia — a being that has captivated mankind for
EGPVWTKGU6JGKTNQPIUVCPFKPIFGUKIPJCUKPURKTGFCTVCTEJKVGEVWTGCPFUEKGPVKƂECPFOCVJGOCVKECN
principles, while representing progressive growth, longevity and value.
CONTENTS
INTRODUCTORY
REPORTS
About the Report 4
About HNB Group 6
Connected & Resilient 8
Our Economic Impact 10
Meaningful Relationships 11
Performance Highlights 12
Chairperson’s Message 14
Managing Director/CEO’s Message 18
14
Chairperson’s
Message
18
Managing
Director/
THE STRATEGIC CEO’s Message CAPITAL
REPORT REPORTS
Operating Environment 23 Financial Capital 45
Outlook, Risks & Opportunities 26 An Interconnected Digital Ecosystem 52
Listening to Stakeholders 28 Human Capital 56
Determining Materiality 30 Social and Relationship Capital 63
An Integrated Strategy 32 Natural Capital 74
Value creation Model 34 Intellectual Capital 80
Manufactured Capital 84
BUSINESS LINE
REVIEW
Retail Banking 36
Corporate Banking 37
SME 38
/KETQƂPCPEG 39
Treasury 40
Insurance 41
Finance 42
Real Estate 43
Investment Banking 44
2 | Annual Report 2022

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227
GOVERNANCE Financial FINANCIAL SUPPLEMENTARY
Reports
AND RISK REPORTS INFORMATION
Board of Directors 86 Financial Calendars 228 Market Discipline – Disclosure
Corporate Management 92 %JKGH'ZGEWVKXG1HƂEGToUCPF Requirements Under Pillar III 436
Senior Management 96 %JKGH(KPCPEKCN1HƂEGToU Financial Statements (US Dollars) 459
Responsibility Statement 229 Sources and Utilisation of Income 462
Chairperson’s Message on Corporate
Governance 103 Directors’ Responsibility Value Added Statement 463
for Financial Reporting 230
Corporate Governance 104 Value Created to Stakeholders 464
Independent Auditor’s Report 232
Annual Report of the Board of Directors Ten Year Statistical Summary 465
on the Affairs of the Company 142 Financial Highlights - Bank 237
Quarterly Statistics 466
HR and Remuneration Income Statement 238
Investor Relations 467
Committee Report 153 5VCVGOGPVQH2TQƂVQT.QUUCPF
Independent Assurance Statement 478
Nomination Committee Report 155 Other Comprehensive Income 239
GRI Index 482
Board Integrated Risk Management Statement of Financial Position 240
Committee Report 158 Sustainability Disclosure Topics &
Statement of Changes in Equity 242
Accounting Metrics 486
Board Audit Committee Report 162 Statement of Cash Flows 246
Glossary of Financial/Banking Terms 487
Related Party Transactions Review Notes to the Financial Statements 248
Committee Report 165 Our Branch & smart self-service
machine (SSM) Network 494
Directors’ Statement On Internal Control
Over Financial Reporting 167 Notice of Meeting 496
Independent Assurance Report 169 Form of Proxy (Voting) 499
Directors’ Interest in Form of Proxy (Non - Voting) 501

Contracts with the Bank 170 Investor Feedback Form 503
Risk & Capital Review 176 Corporate Information Inner back cover
Hatton National Bank PLC | 3

INTRODUCTORY REPORTS
ABOUT THE REPORT
The 10th Integrated Annual Report of

Hatton National Bank PLC seeks to FRAMEWORKS REPORTING ENTITY, BOUNDARY AND SCOPE
TGƃGEVJQYVJG)TQWRPCXKICVGFC[GCTQH
Regulatory
unimaginable political, social and economic Financial Reporting Boundary
uncertainty during which the country’s > Companies Act No.7 of 2007
ƂPCPEKCNUGEVQTJCUTGOCKPGFTGUKNKGPV+V > $CPMKPI#EV0QQHCPFFKTGEVKQPU Non-Financial Reporting Boundary
JCUDGGPRTGRCTGFKPCEEQTFCPEGTGƃGEVKPI of the Central Bank of Sri Lanka Holding Company
our commitment towards institutionalising > Sri Lanka Financial Reporting Standards
integrated thinking. The report seeks to
> CSE Continued Listing Rules
provide a balanced review of how the Bank Subsidiaries
and its subsidiaries created value during the Voluntary
ƂPCPEKCN[GCTGPFKPIUV&GEGODGTKP
> <IR> Framework
line with the frameworks set out below.
> GRI Universal Standards
This report covers the operations of Hatton > Code of Best Practice on Corporate Joint Venture
National Bank PLC, its subsidiaries and the Governance
LQKPVXGPVWTG0QPƂPCPEKCNKPHQTOCVKQP
> TCFD Recommendations
presented within the report, unless explicitly
stated, refers to information relating only to > SASB Standards
the Bank and excludes the subsidiaries and
the joint venture as the Bank accounts for
over 89% Group PAT, Total Assets & Total
Liabilities. OVERALL
> Combined the Integrated Report and the Corporate Governance & Risk Reports
ASSURANCE
> Improved connectivity between stakeholder value creation, governance, strategy,
KPMG has provided assurance on the risks and metrics
ƂPCPEKCNUVCVGOGPVUKPENWFKPIVJGPQVGU
to the accounts. They have also reviewed
the Corporate Governance Report and NARRATIVE REPORT
provided assurance to the Central Bank of
Sri Lanka on the Bank’s compliance with the > Reporting in accordance with the GRI Standards 2021
Banking Act, its subsequent amendments > Enhanced scope of narrative reporting by adding on
and directions issued to licensed commercial – SASB Standards for Financial Services Sector
banks.
– Adopting the TCFD Recommendations
DNV has provided assurance that the report > Moving to a more evidence based approach enhancing integrity of the report
is following the IR Framework and GRI
Standards.
REPORT EVOLUTION REPORTING PRINCIPLES

We continue to monitor the developments > Strategic Focus & Future Orientation > Clarity
in sustainability reporting and have
> Sustainability Context > Comparability
noted the efforts to consolidate and
improve the interoperability of standards. > Connectivity of Information > Completeness
The establishment of the International > Stakeholder Relationships > Conciseness
Sustainability Standards Board and the issue > Accuracy > Timeliness
of Exposure Drafts for IFRS Sustainability
> Balance > 8GTKƂCDKNKV[
1 and 2 are noted and considered in
preparation of our road map for ESG
Strategy implementation. Key changes to
the report this year are given alongside.

CONNECTIVITY OF INFORMATION
The connectivity of information has been improved by Governance Risk
the use of the following icons throughout the report.
THE CAPITALS STAKEHOLDERS STRATEGY
Financial Capital Customers Business growth
Human Capital Employees Business Sustainability
Intellectual Capital Business Partners People Development
Digital Capital Government & Regulators Technology Enablement
Improve Customer
Natural Capital Communities
Experience & Productivity
Social & Relationship Capital Investors
Manufactured Capital
FORWARD LOOKING STATEMENTS heightened levels of uncertainty in forward same to the Board Audit Committee who
Forward looking statements based on NQQMKPIUVCVGOGPVUVJGƃWKFKV[QHOCTMGVU recommended the reports to the Board for
our perceptions, opinions and views of and key economic indicators which remain approval in accordance with the delegation
external and internal information available extremely volatile. Users are advised to of authority.
at present are included in this report to make their own judgements using the
latest information available at the time of The Board acknowledges its responsibility
enable assessment of the Group’s ability to
assessment. All forward looking statements to ensure that the Annual Integrated Report
create value in the future. These statements
are provided without recourse or any liability provides a balanced view of its performance
are associated with relatively high levels
whatsoever to the Board or other preparers in 2022 and is of the opinion that it
QHWPEGTVCKPV[YJKEJECPDGEQPƂTOGF
of the Annual Report due to the reasons addresses all material issues that it believes
QPN[YKVJVJGDGPGƂVQHJKPFUKIJVCUVJG[
enumerated above. may have a bearing on the Group’s capacity
relate to future events, outcomes and
to create value over the short term.
impacts which are beyond our control but
JCXGCUKIPKƂECPVKORCEVQPQWTCDKNKV[VQ THE STATEMENT OF RESPONSIBILITY The reports were unanimously approved
create value. As governments around the Management of Hatton National Bank D[VJG$QCTFQPVJ(GDTWCT[CPFKU
YQTNFUGGMVQOCPCIGQHVGPEQPƃKEVKPI PLC have prepared and reviewed the signed on its behalf by
priorities in the aftermath of the COVID-19 Integrated Annual Report and submitted the
pandemic, we wish to advise users of the
Aruni Goonetilleke Devaka Cooray Jonathan Alles

Chairperson Chairman Managing Director / CEO
Board Audit Committee
Colombo, Sri Lanka

VJ(GDTWCT[

ABOUT HNB GROUP
As the holding company Connected

v>`ÛiÀÃwi`w>V>
services Group and a
ìÃÌV>ÞÃ}wV>ÌL>]
Hatton National Bank PLC
is a leading player in the 2.6 Mn 255 787 7,396

ÕÌÀÞ½Ãw>V>ÃiÀÛViÃ Customers Branches SSMs Merchants
sector. A customer centric
culture and an inclusive Correspondent Correspondent
approach to banking honed 3
Banks in Banks in 31 Correspondent
over 135 years is pivotal countries countries
Banks in 26
to our growth. Leadership, countries
governance and prudent

risk management anchor our
growth aspirations, enabling
us to navigate safely through
turbulent times.
OUR VISION
To be the acknowledged
leader and chosen partner in
RTQXKFKPIƂPCPEKCNUQNWVKQPU
through inspired people. Correspondent
Banks in 7 Correspondent Correspondent
countries
OUR MISSION Banks in 6 Banks in2
countries countries
Combining entrepreneurial
spirit with empowered people Relevant
and leading edge technology
to constantly exceed
stakeholder expectations.
10.2% 10.3% 9.5%
OUR VALUES Net Loans & Advances Total Deposits Total Assets
> Leading with courage

> Commitment
> Teamwork
> Excellence 8.7% of Branches 11.5% of ATM’s
HNB’s share of Licensed Commercial Bank Assets and Liabilities (as at end of 3Q 2022)

ÛiÀÃwi`
BANKING SERVICES
INSURANCE
Wholesale Banking
> Corporate Banking INVESTMENT BANKING
> Trade Finance HNB Assurance PLC
Acuity Partners Ltd.
> Treasury
> Payments & Cash Management 60% 100% 100% Acuity Stockbrokers Ltd
> Islamic Banking
> Custodian Services 100% Acuity Securities Ltd
HNB General Insurance Ltd
79.8% Lanka Ventures PLC
Retail Banking
> Retail Banking
> SME
50%
> /KETQƂPCPEG
FINANCE
42% HNB Finance PLC

100%
(Voting rights 51%)
REAL ESTATE
Sithma Developers Ltd
HNB Group in Numbers
8,581 Group 3,069 Group

5,156 Bank 2,268 Bank 11,357 tCO2e Bank
Employees Female Representation Emissions
Rs 1,443 Bn Group Rs 1,108 Bn Group

Rs 1,408 Bn Bank Rs 1,061 Bn Bank
Deposits Loans & Advances
Rs 1,798 Bn Group Rs 183 Bn Group

Rs 1,691 Bn Bank Rs 159 Bn Bank
Total Assets Equity

CONNECTED & RESILIENT

> Acquisition of Habib
Bank Zurich A.G. with the
intention of forming an
Islamic Banking Unit
2002
> Issuance of a Global

Depository Receipts listed
at the Luxembourg Stock
Exchange 2005 > Brown & Co, an
engineering concern
purchased the interests
in Hatton Bank from the
original investors in the
same year that Ceylon
gained independence
> Launch of Acuity Partners

to provide full-service
1948
investment banking
solutions to meet the 2009
specialised needs of
customers
> Hatton National Bank
was formed to combine
the operations of
Hatton Bank and the 1970
Kandy and Nuwara
Eliya branches of the
Grindlays Bank Shortly
afterward the Hatton
National Bank was listed 1888
on the Colombo Stock
Exchange > R.D.Banks and A.T.Atkin
established Hatton Bank
to cater to the needs of
> 200th Branch opened in the investors and workers
2010 in Ceylon’s tea plantations
Yakkala
1974
> HNB acquired Mercantile
Bank of India’s branches
in Pettah and Colombo as
well as a part interest in
Mercantile (a subsidiary of
HSBC)
> Raised subordinated term
debt of USD 25Mn from 2012
&'))GTOCP[HQTVJGƂTUV
time in Sri Lanka
> Launched Islamic Banking
> .CWPEJQH/1/1ƂTUV 2013

mobile POS in Sri Lanka

A historical review of HNB and
> Launch of HNB ÌÃiÃÌiÃÀiyiVÌ}LÌ
Assurance, a 100%
owned subsidiary w>V>iÃÌiÃ>ÃÜi>Ã -
to carry out milestones.
operations as an
insurance company
2000
> HNB acquired Banque
Indosuez’s Colombo
branch > Crossed Rs 1 Trillion mark in
advances
1996
> Recognised as the ‘Best
Corporate Citizen’ in Sri Lanka
by the Ceylon Chamber of
Commerce
1993 2022
> Launch of new brand identity
> Launch of Pathum Vimana > Launch of SOLO digital wallet
– one of a kind savings
product
> Secured no 1 position in Business

6QFC[6QRTCPMKPIU
> HNB acquired Emirates Bank 2020
International’s Colombo > Launch of new digital banking app,
branch and their Sri Lankan which has the highest rating among
1989 Foreign Currency Banking competitors
Unit
> Launch of ‘Gami Pubuduwa’
OKETQƂPCPEGRTQITCOOG
ƂTUVGXGTD[CEQOOGTEKCN 2019
bank in Sri Lanka
> Launch of QR payment
app SOLO
> Acquiring 51% voting

rights of Prime Grameen
which is HNB Finance
2017
PLC today
> Ranked among top 1000
> Launch of mobile World Banks by the
banking and internet Banker magazine UK and
banking continue to be in the list
since 2017
2014

OUR ECONOMIC IMPACT
NURTURING > 4,500

MSMES
/KETQƂPCPEGHCEKNKVKGUNKPMGFVQ
Many MSMEs have microinsurance policies activated to support
JCFCFKHƂEWNVRGTKQF microentrepreneurs without the ability to
since 2019 and we provide collateral. Loan size was limited to
have remained Rs1 Mn or less and insurance policies were attractively
committed to RTKEGFVQCFFTGUUVJGCEEGUUVQƂPCPEGKUUWGU.QCPU
nurturing this sector, were underwritten by 2 guarantors.
strengthening
our processes to Over 80 region-wise Recovery Camps were
manage the risks conducted to assist farmers to regularise their loans,
of expanding our
Rs 77 Bn
EQPUKFGTKPIVJGKTECUJƃQYU
presence in this vital
customer segment. Disbursed during During the year the Bank rescheduled facilities for
the year to MSMEs over 1,000 MSME customers.
ADDRESSING LEADING THE WAY IN DIGITALISATION

FOOD OF THE FINANCIAL SECTOR
SECURITY >2,000 Rs 26 Bn
#ƂGNFHQTEGQH Farmers
OKETQƂPCPEGQHƂEGTU
support farmers address Supported Disbursed
VJGKTƂPCPEKPIPGGFU through to
Additionally, supply supply chain Agriculture
EJCKPƂPCPEKPINKPMKPI ƂPCPEG Sector in
the entire value chain 2022
from corporate to farmer
supports
holistic
solutions for all
value creators.
437k 282k
PROMOTING Downloads Downloads
FOREX
FLOWS
TO THE
COUNTRY USD > USD 105% Rs 682 Mn
Shortage of foreign 1,000 Mn 570 Mn
currency limited
Growth Invested in
the capacity of the Exports Remittances
in digital Digitalisation
banking sector to supported routed
transactions in 2022
support imports. In through
volumes
this backdrop HNB HNB
KPVGPUKƂGFKVUHQEWU
on driving exports
and remittances.
EXPORT

MEANINGFUL RELATIONSHIPS
FOR
INDIVIDUALS
UB
#UCFKXGTUKƂGFƂPCPEKCN
CL
conglomerate, HNB
Group seeks to build
lasting relationships that
grow with the customers’
changing needs,
supporting lifestyle and
business needs. This
year, we deepened our
TY
relationships, supporting
RI
IO
customers through their
PR
Branches | SSMs
journey. Recognition
Internet Banking |
of HNB Assurance as
Mobile Banking
the Best Bancassurance
24x7 Omni Channel
Provider in Sri Lanka 2022 Call Centre
by Global Banking and
Finance Review for the
second consecutive time
CHƂTOUVJGUWEEGUUQHQWT Housing Loans Premier Current Account
CRRTQCEJTGƃGEVKPI Personal Loans Major Investment Plan
Credit Cards Insurance
S
AS
VJGKPETGCUKPIEQPƂFGPEG Leasing Custody Services

of our customers.
M
Premier Current Account Margin Trading

Salary Smart
FOR
BUSINESSES
MICRO SME EMERGING CORPORATES & CORPORATES
PCM
Custody & Trustee
Syndicated Loan
Treasury
Trade
Project Finance
Insurance
Leasing
Working Capital
Value Chain Financing
Capacity building
Payment Solutions Point of Sale (POS) | Mobile POS | Payment App – SOLO | IPG

PERFORMANCE HIGHLIGHTS
BANK GROUP
2022 2021 Change 2022 2021 Change
Rs Mn Rs Mn Rs Mn Rs Mn
A RESILIENT PERFORMANCE
Gross income 242,412 115,047 110.7% 270,509
Net interest income 102,877 49,559 107.6% 111,567 56,462 97.6%
Net fee & commission income 15,174 57.7% 15,902 54.1%
Total operating income 137,924 109.8% 160,875 84,404 90.6%
Impairment charges 90,461 18,778 91,736
Operating expenses 30,388 49,804
1RGTCVKPIRTQƂVDGHQTGVCZQPƂPCPEKCNUGTXKEGU 17,075 -29.8% 19,336 27,521 -29.7%
2TQƂVDGHQTGKPEQOGVCZ 11,974 19,825 14,420
2TQƂVCHVGTVCZ 14,033 -18.9% 15,748 20,084 -21.6%
FINANCIAL STABILITY
Shareholders’ funds 159,327 152,041 4.8% 183,292 176,668
Customer deposits 1,407,800 1,075,709 1,443,179 1,107,066
Gross loans & advances 1,061,372 928,972 1,107,500 968,907
Total assets 1,690,539 24.5% 1,798,275
Total liabilities 1,531,212 1,206,295 26.9% 1,608,188 26.6%
PROFITABILITY
Net interest margin (%) 7.55% 4.04% DRU 7.77% DRU
Cost to income ratio (%) 22.03% -1240 bps 30.96% 44.25% DRU
Return on assets (%) 0.92% DRU 0.97% 1.42% -45 bps
Return on equity (%) 9.01% 12.10% DRU 8.52% 11.50% -298 bps
ASSET QUALITY
+ORCKTGFNQCPU
UVCIGTCVKQ
3.40% 2.55% 85 bps
+ORCKTOGPV
UVCIGVQUVCIGNQCPUTCVKQ
56.99% 56.11% 88 bps
INVESTOR INFORMATION
Earnings per share (Rs) 26.20 -18.9% 28.62 -19.4%
Net assets per share (Rs) 297.50 4.8% 342.25
Market value per voting share (Rs) 78.90 -41.6%
Total dividends per share (Rs) 5.00 9.00 -44.4%
Cash dividends per share (Rs) - 6.50 -
REGULATORY RATIOS
Core capital ratio (%) 11.06% DRU 11.42% 14.45% DRU
Total capital ratio (%) 14.00% 18.16% -416 bps 14.15% 17.80% DRU
Statutory liquid assets ratio (%) 33.95% 28.02% DRU

Brand Value
Rs 24.2 Bn INTELLECTUAL
43% HUMAN
CAPITAL Value created for employees CAPITAL
Rs 1.1 Bn
Brand Rating
9th
Most Valuable Brand
by Brand Finance
Bank
Top 1000 2022 2021
World Bank by # of Employees 5,156 5,042
The Banker UK
Retention Rate 90.5%
New Recruits 645
Average Training Hours Per Employee 24.4 22.2
DIGITAL SOCIAL & RELATIONSHIP

CAPITAL CAPITAL
178k 99.7% Rs 29 Mn 130%

New customer Customer CSR Investments Growth in
relationships Satisfaction no of SOLO
Score Merchants
Deeper
relationship
38% 105% 80% through focused
cross sell
Onboarding
Capex
Volumes
Customer
Values
Rs 682 Mn
Digital Transactions
1,846 MWh NATURAL

MANUFACTURED Solar energy CAPITAL
CAPITAL generated
Property, Plant & Equipment Rs 9.4 Bn 22% 13%

LKR Mn Clean Energy Reduction in Energy consumption
35,000 Portfolio paper usage of branches through
Solar
30,000 Rs 21.6 Bn
250,00 Land & Building
20,000
15,000
48
Branches housed
10,000
in own premises
5,000
0 Rs 721 Mn
2020 2021 2022
Invested in Capex
Land & Building Other
(excluding Digital Capital)

Every crisis is an opportunity for change and Sri Lanka’s economic crisis is no
ĈĳǖĎƂĎœƖ͟΄ åœņƊ΄ ſŉåƼ΄ å΄ āƂĳƖĳāåŉ΄ ƂŜŉĎ΄ ĳœ΄ ƖĮĎ΄ āŜƞœƖƂƼͽƊ΄ ĎǖŜƂƖƊ΄ ƖŜ΄ őŜƵĎ΄ ĀĎƼŜœĈ΄ ƖĮĎ΄
āƞƂƂĎœƖ΄āƂĳƊĳƊ΄őŜĈĎ΄ƖŜ΄å΄ħƂŜƶƖĮ΄őŜĈĎ΄åœĈ΄Ik΄ĳƊ΄ŉĎåĈĳœħ΄ƖĮĎ΄ƶåƼ΄ĳœ΄ƞœŉĎåƊĮĳœħ΄
ſŜƖĎœƖĳåŉ΄ƶĳƖĮ΄åſſƂŜſƂĳåƖĎ΄āĮĎāņƊ΄åœĈ΄ĀåŉåœāĎƊ͟΄ÎĎ΄åƂĎ΄åŉƊŜ΄őŜƵĳœħ΄ĦåƊƖ΄ƖŜ΄ŉĎåĈ΄
ƖĮĎ΄ƶåƼ΄ĳœ΄ƖĮĎ΄ĳœĈƞƊƖƂƼ΄ĀƼ΄ĎœƊƞƂĳœħ΄ƖĮåƖ΄ƶĎ΄ƂĎőåĳœ΄āŜœœĎāƖĎĈ΄ƖŜ΄ħŉŜĀåŉ΄őåƂņĎƖƊ΄
åœĈ΄ŜſſŜƂƖƞœĳƖĳĎƊ΄ĀƼ΄ĮåƂœĎƊƊĳœħ΄ƖĎāĮœŜŉŜħƼ͟

A PATH TO
OPPORTUNITY
CHAIRPERSON’S MESSAGE
Dear Stakeholders, changes nevertheless gave rise to high levels “Cash combined with
of volatility which needed to be managed.
The year under review was unprecedented, In April, the government approached the courage in a time of crisis
with a combination of economic stress, International Monetary Fund for assistance. is priceless”
social unrest, and political instability which The resignation of the Prime Minister in May,
resulted in systemic shocks affecting all Sri the President in July and the appointment
Lankans and all sectors of the economy Warren Buffet
of a President for the remainder of the term
and the banking industry in particular. also added to the volatility which carried
Consequently, the Board remained on till mid-July 2022. The newly appointed
vigilant, carefully recalibrating its priorities government has since implemented certain
to maintain stability whilst supporting measures to reduce subsidies and increase
customers and keeping all stakeholders government revenues through taxation.
closely engaged as the crisis unfolded.
These changes necessitated wide-ranging
RESPONDING TO AN UNFOLDING reviews across the HNB Group to assess
CRISIS their impact on customers, stakeholders and
the Bank. The Bank’s investments in foreign
6JGƂTUVSWCTVGTYCUOCTMGFD[TKUKPI currency denominated sovereign debt was a
KPƃCVKQPCFQNNCTNKSWKFKV[ETKUKUCITQYKPI key issue that was stress tested under various
energy crisis and a devaluation of the rupee scenarios to ensure that the Bank would
which led to economic hardship and social remain liquid and adequately capitalized.
unrest, which gained momentum in the The impact of increased interest rates on
second quarter. Businesses needed dollars customers and the Bank was another area of
for import of raw materials and the country EQPEGTPYJKEJPGGFGFURGEKƂEKPVGTXGPVKQPU
needed dollars for import of essential /CP[EWUVQOGTUHCEGFUKIPKƂECPVFKHƂEWNVKGU
items including gas, food and medicines. KPOCPCIKPIECUJƃQYUFWGVQVJGKPETGCUGF
The Board maintained focus on three key interest rates, necessitating careful
aspects, to maintain liquidity, capital and monitoring of recoveries and asset quality.
people with a view to mitigating potential The Board noted strong growth in deposits
impacts. The Bank was in a strong position CUEWUVQOGTUVQQMƃKIJVVQUCHGV[OQXKPI
going into the crisis with high levels of deposits to the banks which had a tried and
capital, sound asset quality and robust risk tested model for strength and resilience.
management processes. The pace of growth Capital management was a key priority to
YCUOQFGTCVGFVQOCKPVCKPƂPCPEKCNUVCDKNKV[ safeguard the depositors and the Board
while driving growth prudently. Accordingly, remained vigilant throughout the year in
VJG$CPMKPVGPUKƂGFKVUGHHQTVUVQITQY this regard. HNB was one of the few banks
exports and remittances, successfully that did not raise capital during the year
restoring dollar liquidity to manageable as its CAR and SLR remained comfortably
levels and enabling customers to meet their CDQXGTGIWNCVQT[TGSWKTGOGPVUTGƃGEVKPIVJG
requirements. It was heartening to note the cautious approach adopted by the Board
commitment with which employees came in building margins of comfort to capital
to work and kept branches open during this management.
time despite several challenges.
The second half of the year saw a gradual
The devaluation of the rupee, an increase stabilization of the exchange rate and
of 700 bps in policy rates and Sri Lanka’s an easing of dollar liquidity as imports
suspension of payments on foreign debt declined and exports maintained an upward
in April 2022 marked the beginning of the trend. Remittances also increased as a
second quarter. While widely anticipated result of renewed economic activity and
as a much-needed correction, the policy

CHAIRPERSON’S MESSAGE
relative stability in the Country. However, Digitalisation has been at the top of the Board agenda as it is
the uncertainty relating to the foreign
debt restructuring and debt sustainability perhaps the most impactful and the most resource intensive
continues even at the reporting date aspiration. The Bank has consistently invested in IT to deliver
although progress has been made in
discussions with the IMF. future ready solutions to customers to meet the demands of
evolving lifestyles. Reaping the digital dividend is perhaps
RESILIENCE, RETURNS & GROWTH one of the most challenging as technologies change, shifting
The main priority of the Board was building goal posts as projects typically have long gestation periods.
resilience with resultant trade-offs on growth
CPFRTQƂVCDKNKV[YJKEJUCYCOQFGTCVKQPKP Acceptance by users is a key determinant of success and the
2022. number of downloads and app ratings are encouraging.
While the Total Capital Adequacy Ratio
and the Tier 1 Capital Ratio declined to MAINTAINING FOCUS ON THE objectively, using data analytics to support
14% and 11% by the close of 2022, they LONG TERM KVUUEQTGUCPFƂPFKPIU9GCTGRNGCUGFVQ
remain above the regulatory requirements PQVGVJGUKIPKƂECPVRTQITGUUOCFGYKVJC
QHCPFCPFCHWTVJGTQH There is no doubt that three successive
years of crisis have tested our mettle UEQTGQHCHƂTOKPIVJCVVJGYKFGTCPIKPI
capital conservation buffer which the Bank initiatives implemented are effective.
could drawdown upon if required. This was and sharpened our wits. Our long term
achieved despite the increased provisioning commitment to delivering our strategy
Digitalization has been at the top of the
made during the year as discussed below. remains steadfast as we strongly believe that
Board agenda as it is perhaps the most
These were the anchors around which a future focus is necessary to move out of
impactful and the most resource intensive
strategy was realigned in the short term to crisis mode. The long-term strategy laid out
aspiration. The Bank has consistently
QPRCIGDGEQOGUVJGPQTVJUVCTHQTVJG
DWKNFTGUKNKGPEGHQTVJGFKHƂEWNVVKOGUCJGCF invested in IT to deliver future ready
Credit growth moderated to 6% although Group. Our long -term aspirations for the
solutions to customers to meet the demands
Bank are clearly articulated – to be the most
VJGDCNCPEGUJGGVITQYVJTGƃGEVUCJKIJGT of evolving lifestyles. Reaping the digital
rate of 14% largely due to revaluations of customer centric bank, the best digital bank,
dividend is perhaps one of the most
foreign currency denominated assets. the most preferred employer and the most
challenging as technologies change, shifting
resilient and sustainable bank. Every project
goal posts as projects typically have long
Accordingly, the Group and the Bank initiated needs to support the realization of
gestation periods. Acceptance by users
TGEQTFGF2TQƂV#HVGT6CZQH4U$PCPF VJGUGEGPVTCNQDLGEVKXGU6JGJGTKVCIGQH
is a key determinant of success and the
4U$PTGURGEVKXGN[HQTVJG[GCTGPFGFUV years rooted in inclusive banking, a strong
number of downloads and app ratings are
December 2022, curtailing the year on year balance sheet, global networks and future
encouraging. We will continue to focus on
decrease to 22% and 19% in a year in which ready digital infrastructure are key strengths
moving totally away from legacy systems and
the country’s economy contracted by an that support a skilled and motivated team to
practices to continuously enhance customer
GUVKOCVGFKPVJGƂTUVPKPGOQPVJU deliver on these goals.
experience.
It is necessary to discuss the returns to We will continue to focus on becoming
Becoming the preferred employer is
investors, which declined during the year. the most resilient Bank creating value
important as we need to attract, develop
We believe that their longer term interests to customers and contributing to our
and retain the best talent to hone our
were preserved during this challenging communities whilst delivering sustainable
EQORGVKVKXGGFIG9GCNUQPGGFVQƂZVCNGPV
year as decisions were made to manage returns to investors. I am delighted that
NGCMCIGYJKEJJCUDGGPCUKIPKƂECPVKUUWG
a crisis in the shorter term with a view to Hatton National Bank was awarded the Best
in 2022 due to high levels of economic
remaining sustainable for the long term. %QTRQTCVG%KVK\GPCHƂTOKPIVJCVYGCTGQP
migration. The Bank has a dynamic HR
Adverse movements in the Colombo Stock the right track to realising this aspiration. A
Department that continues to review,
Exchange further dampened returns. HNB Board led agenda to mainstream ESG into
realign and enhance the employee value
remains an attractive long term investment strategy, risk management and reporting
proposition proactively with oversight by
at the current valuations and we remain processes is critical to driving this aspiration
the HR & Remuneration Committee of the
committed to strengthening the investor and we are continuously evolving in this
Board.
value proposition through our long term area.
strategy. Every crisis is an opportunity for change
Customer centricity is being actively
and Sri Lanka’s economic crisis is no
driven throughout the Bank as this will
different. Global growth is also moderating
be a key differentiator. A dedicated
YKVJRGTUKUVGPVN[JKIJKPƃCVKQPKORCEVKPI
Customer Experience unit supports the
demand and growth. Geopolitics are also a
Board, monitoring this key area of success

key factor and present tensions need to be ƂPCPEGVQVJQWUCPFUQHHCTOGTUVQIGVJGT
monitored to understand potential impacts with supermarket chains to maintain healthy
of escalation. However, it is important to ECUJƃQYU6JKUYCUCRTKQTKV[FWGVQKVU
focus on driving up the denominator in impact on the country’s food security and we
the debt to GDP formula that is commonly look to roll out more projects that contribute
used to assess economic stress. Banks positively, in collaboration with reliable
play a critical role in the country’s efforts to partners.
move beyond the current crisis mode to a
growth mode and HNB is leading the way in Our own use of resources is being reviewed
unleashing potential with appropriate checks as part of a larger cost management exercise
and balances. We are also moving fast to CPFYGJQRGVQFTKXGUKIPKƂECPVEJCPIGVQ
lead the way in the industry by ensuring that reduce our carbon footprint. We will also
we remain connected to global markets and look to drive change through our own supply
opportunities by harnessing technology. chains, mainstreaming ESG throughout the
HNB Group.
MAINSTREAMING ESG
APPRECIATION
A bank plays a multifaceted role. It is part of
the infrastructure required in a community On behalf of the Board, I commend the
to facilitate economic activity. It becomes dedication and commitment demonstrated
the pivotal point for trade, facilitating by our staff in keeping branches and call
transactions both within its boundaries and centers open and delivering results in
markets beyond its boundaries. It becomes [GVCPQVJGTFKHƂEWNV[GCT5KOKNCTN[VJG
a trusted custodian of wealth and a source leadership provided by the Chief Executives
QHƂPCPEGHQTKPXGUVOGPVCPFEQPUWORVKQP of the Group in rallying their teams has
PGGFU+VECPKPƃWGPEGUWUVCKPCDNG been the critical factor behind the holistic
FGXGNQROGPVD[FKTGEVKPIƂPCPEKCNTGUQWTEGU performance set out in the report. I thank
VQKFGPVKƂGFUGEVQTUQHVJGGEQPQO[6JGTG our stakeholders who trusted us to partner
is now an urgency to direct investment into their journeys and look to work with them
industries that will support the country’s as we move forward. We are appreciative
economic growth while also supporting QHVJGUWRRQTVRTQXKFGFD[VJGQHƂEGTU
its transition to a low carbon economy of the Central Bank of Sri Lanka and
with reduced inequalities. Accordingly, the other regulators. We are moving forward
Bank will look to increase investments into with cautious optimism to support the
exports, local manufacturing, renewable resurgence of a country that has shifted to a
energy, and IT. We will also support the new trajectory of prosperity for all.
recovery of the Leisure sector on a more
selective basis as the industry needs
ƂPCPEKPIVQTGUVQTGKVUXKDTCPE[CPF
accelerate growth in earnings from tourism.
As one of the largest player in the MSME

sector, the Group plays a key role in
CFFTGUUKPIƂPCPEKCNKPGSWCNKV[VJTQWIJ Aruni Goonetilleke
CEEGUUVQƂPCPEGCPFCNUQRTQXKFKPIUCHGV[ Chairperson
nets through HNB Assurance Group. The
Group adopts a holistic approach to the Colombo, Sri Lanka
sector, providing a full spectrum of value VJ(GDTWCT[
adding features that range from the well-
GUVCDNKUJGFECRCEKV[DWKNFKPICPFƂPCPEKCN
literacy to the more innovative access to
markets, technical assistance, export credit
and payment solutions products. We hope
to expand the assistance to this segment
with structured products that combine
the expertise of the Group while also
FTKXKPIU[PGTIKGU5WRRN[EJCKPƂPCPEKPI
is an example of how this sector provided

Îĳœœĳœħ΄ƖĮĳƊ΄åƶåƂĈ΄ĳœ΄å΄ƼĎåƂ΄ĳœ΄ƶĮĳāĮ΄¢Ƃĳ΄aåœņå΄ƶĎœƖ΄ƖĮƂŜƞħĮ΄őƞŉƖĳſŉĎ΄āƂĳƊĎƊ΄
åǗƂőƊ΄ ƖĮåƖ΄ ƖĮĎ΄ Ik΄ BƂŜƞſ΄ ƊƖĎſſĎĈ΄ ƞſ΄ ƖŜ΄ ſŉåƼ΄ ŜƞƂ΄ ſåƂƖ΄ åƊ΄ å΄ ƂĎƊſŜœƊĳĀŉĎ΄
āŜƂſŜƂåƖĎ΄āĳƖĳǆĎœ͟΄¯ĮĳƊ΄ƶåƊ΄œŜƖ΄ĀƼ΄āĮåœāĎ΄ĀƞƖ΄ĀƼ΄ĈĎŉĳĀĎƂåƖĎ΄ƊƖƂåƖĎħƼ΄ƖĮåƖ΄ƶåƊ΄
åŉĳħœĎĈ΄ƖŜ΄őĎĎƖ΄ƖĮĎ΄ƞƂħĎœƖ΄œĎĎĈƊ΄ŜĦ΄ƖĮĎ΄āŜƞœƖƂƼ͚΄ƖĮĎ΄ſĎŜſŉĎ΄åœĈ΄ƖĮĎ΄ĀƞƊĳœĎƊƊĎƊ͟

A PROGRESSIVE
JOURNEY
MANAGING DIRECTOR/CEO’S MESSAGE
To Our Stakeholders, The benchmark AWDR and AWPLR moved

WRD[DRUCPFDRUTGURGEVKXGN[ DELIVERING STRATEGY
Penning this message soon after Hatton FWTKPIVJG[GCTTGƃGEVKPIVJGRTGUUWTG
National Bank was judged as the Best on key market interest rates. As AWPLR – Best Corporate Citizen
Corporate Citizen by the Ceylon Chamber reached 27.24% by the close of the year,
of Commerce, I would like to start by this put enormous pressure on businesses
Most resilient and sustainable
sharing why the HATNA family is elated by VQOCPCIGVJGKTƂPCPEGEQUVUFTKXKPIFQYP bank
this achievement. The awards programme the demand for credit. Accordingly, private
looks for a holistic performance that goes sector credit growth remained relatively
DG[QPFRTQƂVVQCUUGUUJQYOWEJXCNWG ƃCVCUDWUKPGUUGUFGHGTTGFKPXGUVOGPVUHQT
– NPS 62%
the entity creates for the economy and many reasons including the cost of raising
how it contributes towards the sustainable ECRKVCN+PETGCUKPIKPƃCVKQPYCUCMG[HCEVQT
– Deposit growth >30%
development of the country. Therefore, weighing down the economy, rising to a Most customer centric bank
winning this award in a year in which Sri RGCMQHKP5GRVGODGTCPFFGENKPKPI
.CPMCYGPVVJTQWIJOWNVKRNGETKUGUCHƂTOU
that the HNB Group stepped up to play
thereafter to 59.2% by the close of the year.
(QQFKPƃCVKQPYCUCMG[FTKXGTTGCEJKPI
– Digital transactions
our part as a responsible corporate citizen. 94.9% in September 2022 as the sudden volume growth 105%
This was not by chance but by deliberate prohibition of import of fertilizer resulted in
strategy that was aligned to meet the urgent poor harvests and a shortage of food in the – Highest rated digital
needs of the country, the people and the
businesses, which was delivered through
EQWPVT[0QPHQQFKPƃCVKQPCNUQHQNNQYGFCP
upward trajectory driven by increased costs
app and digital wallet in
a network of 255 branches by over 5,000 of fuel, electricity, transport and health. The the market
people. %QWPVT[oURQXGTV[NKPGYJKEJYCU4U
KPOQXGFVQ4UD[&GEGODGT
Best digital bank
BUILD-UP OF STATIC 2022 resulting in an estimated 25% of the
RQRWNCVKQPNKXKPIDGNQYVJGQHƂEKCNRQXGTV[ – Employee retention
The downside risks discussed in my message
last year materialised rapidly, escalating to
line. > 90%
social unrest mere days after signing off Exports were the main source of foreign Most preferred employer
on the report. By the time of the Annual EWTTGPE[KPƃQYUFWTKPIVJG[GCTCOQWPVKPI
General Meeting, the exchange rate had VQ75&$PCPFTGEQTFKPICITQYVJ
risen sharply by 49% for the 1st quarter of of 4.9% boosted by increased demand for
2022, climbing to 80% by May 2022. The industrial and mineral products. Worker
energy and food crises together with rising TGOKVVCPEGUFGENKPGFD[KPVQ75&
KPƃCVKQPICXGTKUGVQKUNCPFYKFGRTQVGUVU $PFWTKPIVJGJGKIJVQHVJGHQTGKIP
that continued to gather momentum exchange liquidity crisis. The situation eased
during the second quarter. These resulted towards the close of the year, resulting
in the installation of a new Governor of in an uptick in worker remittances in the
the Central Bank of Sri Lanka in March fourth quarter. Tourism also moved up in
2022, the resignation of the Prime Minister the 4th quarter with the lifting of the travel
in May 2022 as well as the resignation of advisories upon the restoration of normalcy
the President and the appointment of a in the country.
caretaker President in July 2022.
On 12th April 2022, Central Bank of Sri Lanka
With the installation of the new Governor, announced the temporary suspension of
the Monetary Board increased policy rates repayment of external debt and approached
by 700 bps in April 2022 and by a total of VJG+/(HQTƂPCPEKCNCUUKUVCPEGYJKEJKU
DRUHQTVJG[GCTVCTIGVKPIKPƃCVKQP [GVVQDGƂPCNKUGFCUCVVJGTGRQTVKPIFCVG
which had risen to 17.5% as measured by On a prudent basis banks have made
the National Consumer Price Index by then. provisions on account of the investments in

foreign currency denominated government MSME’s were the most vulnerable during the crisis and we
UGEWTKVKGUCPFVJGUGUKIPKƂECPVKORCKTOGPV
EJCTIGUJCXGYGKIJGFFQYPRTQƂVCDKNKV[QH renewed our efforts in supporting them to manage their
the banking sector. V>ÃyÜÃ° vvÀÌÃvVÕÃi`>ÞiÃÕÀ}LÕÃiÃÃiÃ
Additionally, local banks were adversely ÃÌ>Þi`>y>ÌÃÌÀiÃÃi`V`ÌÃÃÌi>`vÛiÀLÕÀì}
impacted by the related sovereign these entities with costly debt. Accordingly, the more
downgrades as it led to the cancellation
of foreign funding lines by correspondent intensive work of pulling them out of danger commenced
banks and no support from foreign banks with portfolio reviews and realigning payment schedules to
in Sri Lanka. These actions resulted in
increased pressure in managing foreign
iiÌV>ÃyÜÃ>ÃÌÀiÃÃiìVVÃVi>À°
exchange liquidity and limitations in the
ability to provide solutions for our customers
Our commitments to stakeholders through The foreign exchange liquidity crisis was
who needed them.
the time of crisis were wide-ranging. the most troubling to manage as it affected
Potential disruptions to business continuity so many customers who were faced by
STEPPING UP due to the energy and fuel crisis were a import bans and even if they could import,
HNB Group has been supporting its concern for most of the year. I commend the access to foreign currency was a major
customers and other stakeholders weather the commitment of our HATNA team as issue. HNB maintained a priority list giving
HQWTEQPUGEWVKXG[GCTUQHGZVTGOGƂPCPEKCN they kept the branches open and digital preference to food, medicine and energy
vulnerability, commencing with the Easter KPHTCUVTWEVWTGQRGTCVKQPCNYKVJWPTWHƃGFECNO imports to meet the basic needs of the
Sunday terror attacks in 2019, two years CPFRTQHGUUKQPCNKUOVJCVKURCTVQHQWT country, eking out the meagre foreign
of the pandemic and the economic crisis year heritage, ensuring our customers had exchange resources at the height of the
in 2022. From ensuring access to cash to access to funds for urgent needs and that crisis. It was not just importers who were
extending moratoria, the Bank provided urgent transactions could be done. HNB affected but exporters including local
a range of targeted interventions that was able to deliver relief to our customers in manufacturers and also the students who
balanced their interests while ensuring numerous ways due to the concern and hard were unable to send fees overseas for
sustainability of the Group. work of the team to steer them through the GFWECVKQPCNRWTRQUGU#FCKN[ƂTGƂIJVYJGTG
turbulence. we were unable to help so many deserving
customer was a disheartening experience.
We have strategised and moved out of this
very painful period and are now able to
meet rational needs of customers given the
extraordinary circumstances.
MSMEs were the most vulnerable during

the crisis and we renewed our efforts
in supporting them to manage their
ECUJƃQYU'HHQTVUHQEWUGFOCKPN[QP
GPUWTKPIDWUKPGUUGUUVC[GFCƃQCVKPUVTGUUGF
conditions instead of overburdening these
entities with costly debt. Accordingly, the
more intensive work of pulling them out of
danger commenced with portfolio reviews
and realigning payment schedules to meet
ECUJƃQYUKPCUVTGUUGFGEQPQOKEUEGPCTKQ
Consequently, portfolio growth was not an
actively pursued strategy, rather restoring
the health of the businesses and capacity
building. We also focused on creating
market access for MSME with Appigo,
9GDGZ2C[CPF%QTFRCTVPGTUJKR
supporting integration into a digitalised era
to grow the top lines.

DELIVERING STRATEGY and the cautious approach to new lending. banking principles while also catering to the
Despite the daunting challenges, the Consequently, the Loans and Advances discerning high end customers.
leadership of the Bank remained focused portfolio growth was at 14%, with the
on delivering the long term strategy of group gross portfolio amounting to Rs Corporate Banking
the Bank. Resource allocation needed to 1,108 Bn by the close of the year. Liquid Corporate Banking has the largest portfolio
connect very clearly to the goals and linked assets comprising cash, balances with of loans and advances within the Group
to a strategic pillar and our foundation of banks and CBSL noticeably increased by and manages relationships of large and
business sustainability, ensuring that scarce VQ4U$PTGƃGEVKPIVJGGORJCUKU emerging corporates to support their
TGUQWTEGUYGTGQRVKOKUGF1WTTGUWNVUCHƂTO on optimising liquidity while the statutory ƂPCPEKPIVTCFGCPFVTCPUCEVKQPCNPGGFU
that we have made considerable progress NKSWKFCUUGVTCVKQUVQQFCVYGNNCDQXG It offers a full range of corporate banking
along this forecast growth trajectory. the regulatory requirement of 20%. On the services delivered through Relationship
HWPFKPIUKFGFGRQUKVUKPETGCUGFD[VQ Managers who are able to draw on the
As mentioned above, HNB was honoured 4U$PTGƃGEVKPIVJGEQPƂFGPEGRNCEGF specialised expertise within the Bank
as the Best Corporate Citizen and this goes in the Bank and the Brand by customers to structure innovative and customised
a long way towards our goal of becoming during a time of extreme uncertainty. solutions for its customers. It also supported
the most resilient and sustainable bank. Our However, CASA declined as high interest growth in deposits, raising Rs 85 Bn in 2022
customer satisfaction scores as measured rates attracted depositors to time deposits. to record segment liabilities of Rs 258 Bn as
by the NPS Score moved up from 56% in at the close of the year, an increase of 50%
VQKPTGƃGEVKPIVJGRTQITGUU SEGMENTAL PERFORMANCE over the previous year. Loans and advances
made on customer centricity. Our journey to increased by 24% to Rs 552 Bn. Highlights
The Bank has eight business segments
become the best digital bank commenced during the year included the growth of
QHYJKEJƂXGCTGRCTVQHVJG$CPM6JG
a few years ago and we continue to make the export business which offset the lull in
Insurance and Finance businesses are
headway in empowering both internal and import activity to a large extent.
headed by two subsidiaries which are
external customers through digitalisation.
public listed companies and are regulated.
Our app ratings consistently maintain over SME
The Real Estate segment comprises the
4 stars on the Google Playstore and the
operations of Sithma, a subsidiary of the The SME Loans and Advances portfolio
#RRNG#RR5VQTGTGƃGEVKPIQWTRTQITGUUKP
Bank. Subsidiaries are governed by separate TGOCKPGFƃCVCV4U$PCUVJGHQEWUQP
this important aspect. The digital transaction
Boards which include members of the parent this sector was mainly about supporting
volumes have also increased by 105% in
company Board and members of the Senior businesses to ride the storm as discussed
TGƃGEVKPIVJGEWUVQOGTCEEGRVCPEGQH
Leadership Team of the Bank who serve as above. HNB is one of the largest lenders to
our digital platforms providing additional
a conduit for oversight of the operations, this sector which forms the backbone of the
evidence of our progress. The goal of
communication and policy alignment. Country’s economy. This vertical was able to
becoming the most preferred employer is
KPETGCUGVJGFGRQUKVUD[VQ4U$P
also one on which we’ve made considerable
progress, retaining over 90% of our staff in a
Retail Banking in 2022. During the year, the Bank focused
Retail Banking plays a critical role in heavily on supporting customers to revive
year of unprecedented economic hardships
mobilising funds for the Bank through an their businesses.
that led to migration of talent.
island-wide network of branches. Customer
centricity and digital enablement are critical Micro
BUILT FOR RESILIENCE
to the growth of this business segment as The Micro segment remained resilient
*0$)TQWRTGEQTFGFCRTQƂVCHVGTVCZ activity is characterised by a large number during the year, focusing on managing
of Rs15.7 Bn in 2022, a moderation in of small transactions. Retail Banking has asset quality and mobilising deposits. The
RTQƂVCDKNKV[QHFWGVQCDUQTRVKQPQH on-boarded over 700k customers to digital portfolio declined by 10% to Rs 26 Bn as
impairment charges which spiked sharply by platforms which has supported growth and some migrated to SME status while deposits
VQ4U$P6JG)TQWRYCUCDNGVQ customer satisfaction which are key strategic KPETGCUGFUJCTRN[D[VQ4U$P
withstand this industry wide shock stemming KPIs.
from macroeconomic stresses on the credit Treasury
portfolio and the temporary suspension of During 2022, Retail Banking increased
debt repayment on external debt as the FGRQUKVUD[VQ4U$PTCKUKPI4U The Treasury had an extremely challenging
Group has been built for resilience, having 148Bn for the Bank. Although we were year. High interest rates supported a strong
weathered multiple industry cycles over cautious towards lending in the second half growth in NII while the rupee devaluation
KVU[GCTUQHGZKUVGPEG6QVCNCUUGVUQH QHVJG[GCTVJGƂTUVJCNHQHVJG[GCTUCYVJG enabled to record a 47% increase in Foreign
the Group increased by 24% to Rs 1,798 retail segment recording a modest growth. Exchange gains. However, the impairment
Bn largely due to revaluation of foreign The segment is well positioned for growth, charges largely stemming from exposure
currency denominated assets and a modest as the country recovers leading the way to GOSL debt securities denominated in
growth of loans and advances. Low credit in building the Brand through inclusive foreign currency amounting to Rs 59Bn
ITQYVJTGƃGEVGFVJGJKIJKPVGTGUVTCVGU negatively impacted the bottom line.

Insurance čÃ>w>V>ÃiÀÛViÃÀ}>Ã>Ì]«i«i>ÀiÕÀÃÌ
The HNB Assurance Group delivered
a strong performance during the year,
valuable asset as every individual activity is connected
recording its highest Gross Written to create something that is greater than the sum of the
Premiums in its history, outpacing industry parts. This year, every action mattered, due care, diligence,
growth in both Life and General Insurance
business. Growth of its sales force, and application of sound banking principles and ethics were
branches was supported by increased necessary for us to steer through the perfect storm that
investments in its digital infrastructure to
support growth. A comprehensive suite
was 2022. But our work is not done as we need to drive a
of products and clear focus on client resurgence and it is our team that has to deliver the strategy.
segmentation enabled the companies
to identify the potential areas of growth
We are investing in our people as never before, conscious
despite the negative impacts of high that they all face challenges at work and at a personal level.
KPƃCVKQPQPKVUDWUKPGUU
Finance
HNB Finance Group also faced a challenging workplace. This year, the Bank and its ACKNOWLEDGEMENTS
year as their customer base comprising subsidiaries supported our teams through It has been my privilege to have the
MSMEs was adversely impacted by the VJGRGTKQFUQHJKIJKPƃCVKQPCPFCNUQVJG unstinting support of the Hatna family
economic stress. A highlight during the year adjustment to higher levels of taxation. led by the Corporate Management Team,
was the completion of the amalgamation of We remain committed to the wellbeing of with a single-minded vision and passion to
Prime Finance PLC following its acquisition our team, conscious that we can move to perform. I acknowledge the diligence and
in 2021. Consequently, the balance sheet the next level, only if we invest in the skills vigilance of the Board of directors who have
QHVJGEQORCP[ITGYD[VQ4U$P required for the next phase of our journey. guided strategy and provided objective
However, the company made a loss for In recognition of HNB’s pursuit of attracting QXGTUKIJVFWTKPICFKHƂEWNV[GCT+VJCPM
the year, as NII declined and impairment best talent, HNB was once again recognised them for their efforts. I extend my sincere
charges increased. among the Top 20 Employers by AICPA and ITCVKVWFGVQVJG)QXGTPQTCPFVJG1HƂEKCNU
CIMA (UK). of the Central Bank of Sri Lanka for their
Acuity Partners guidance and support to navigate through
Acuity Partners carries on investment SUSTAINABLE GROWTH these turbulent times. The support of our
banking, stockbroking, advisory, and primary – THE WAY FORWARD customers and business partners has been
dealership activities. The Group recorded As we survey the aftermath of 2022, encouraging and these relationships remain
a solid performance, strengthened by the the urgency is to rebuild with stronger the foundation for our success. I thank our
performance of the Primary Dealership and foundations for a longer term recovery. The KPXGUVQTUHQTVJGKTEQPVKPWQWUEQPƂFGPEG
venture capital arm Lanka Ventures PLC. Sustainable Financing direction issued in despite the adverse economic landscape
2022 is timely in this regard as it points the The HNB Group was built for resilience from
way to a country that can transition to a low the days in the hills and we are committed to
PEOPLE strengthening it in the years ahead.
carbon economy and shared prosperity.
#UCƂPCPEKCNUGTXKEGUQTICPKUCVKQPRGQRNG
Uncertainties have become a part of our
are our most valuable asset as every
life and Sri Lanka is not the only country
individual activity is connected to create
facing high levels of stress. However, it is
something that is greater than the sum of
important that we remain risk aware and not
its parts. This year, every action mattered,
necessarily risk wary while the uncertainties
due care, diligence, application of sound
remain largely weighed to the downside.
banking principles and ethics were necessary
HNB is committed to our long term strategy
for us to steer through the perfect storm Jonathan Alles
articulated above and now we are eager to
that was 2022. But our work is not done as Managing Director / CEO
move forward on this agenda. We will select
we need to drive a resurgence and it is our
the right opportunities to pursue as we are
team that has to deliver the strategy. We Colombo, Sri Lanka
aware of the buffers we need to maintain
are investing in our people as never before,
CPFVJGƂPKVGTGUQWTEGUCXCKNCDNG4KUM VJ(GDTWCT[
conscious that they all face challenges at
management will be pivotal to our journey
work and at a personal level. The Bank has
and it is indeed fortunate that we invested in
a broad and important mandate to upskill
these foundations over the past few years.
and enhance capabilities, particularly those
needed to function in a more digitalised

OPERATING ENVIRONMENT
Downside risks in the Heightened challenges in Exchange Rate

the external sector
operating landscape USD/LKR
400
escalated to an economic Impact on foreign reserves witnessed post
crisis in the country Covid continued to further aggravate
300
during 2022 resulting in the usable
resulting in social and QHƂEKCNTGUGTXGUFGRNGVKPIVQPGCT\GTQ
political turmoil in the levels in April 2022. Consequently the 200
wÀÃÌ>vvÓäÓÓ°7i government announced the suspension of all

external foreign currency debt repayments 100
stability has been restored, CPFTGSWGUVGFHQT+/(UWRRQTV6JGCTVKƂEKCN
it remains fragile with high exchange rate cap was removed as a result 0
which led to the currency being devalued by
levels of uncertainty in
2021-Jan
2021-Feb
2021-Mar
2021-Apr
2021-May
2021-Jun
2021-Jul
2021-Aug
2021-Sep
2021-Oct
2021-Nov
2021-Dec
2022-Jan
2022-Feb
2022-Mar
2022-Apr
2022-May
2022-Jun
2022-Jul
2022-Agu
2022-Sep
2022-Oct
2022-Nov
2022-Dec
nearly 80% during a very short period of time.
key aspects. Those issues Source: CBSL
including those stemming

Stakeholders Impacted
from the crisis which had
>Ã}wV>Ì«>VÌ>Ài Our Response
summarised here together > Allocation of foreign exchange for priority sectors
with the HNB Group’s > Support exports and local manufacturing
response. > Drive remittances to the country
> Compliance with increased regulation and monitoring to
HCEKNKVCVGOCPCIGOGPVQH(:ƃQYU
GOSL restructuring of foreign

currency denominated debt
GOSL Debt 5KPEG+/(JCUENCUUKƂGF5TK.CPMCoUFGDVCUWPUWUVCKPCDNG

Sri Lanka’s debt has to be restructured in order to be eligible
Rs Bn
for an extended fund facility from the IMF. The restructuring
35,000
will ensure that Sri Lanka can meet the covenants set out by
30,000 the IMF to ensure debt sustainability.
25,000
At present the government is in negotiation with the bilateral
20,000
creditors of Sri Lanka. India and Paris Club have already
15,000 RTQXKFGFVJGKTƂPCPEKCNCUUWTCPEGUCPFQPEGVJGCUUWTCPEGKU
10,000 received from other parties, Sri Lanka can proceed to obtain
Board Level approval from IMF. Thereafter negotiations will
5,000
commence with private creditors.
0
2018 2019 2020 2021 Jun
2022
Domestic debt Foreign debt Stakeholders Impacted
Source CBSL
Our Response
> $CPMKPIUGEVQTLQKPGFVQIGVJGTVQUGVWRCEQPUQTVKWOCPFVJGEQPUQTVKWOCRRQKPVGFCNGICNCPFƂPCPEKCN
advisor to safeguard the interest of the banking sector.
> Working closely with GOSL, its advisors and the IMF
> 4GEQIPKUGFCUKIPKƂECPVKORCKTOGPVQPKPXGUVOGPVUJGNFKP+5$U
> 5VTGUUVGUVKPIMG[KPFKECVQTUQHƂPCPEKCNUVCDKNKV[VQICKPKPUKIJVU
> Strengthened focus on capital and liquidity management

THE STRATEGIC REPORT
OPERATING ENVIRONMENT
Sharp increase in
interest rates
Interest Rates & Liquidity
CBSL tightened the Our Response
% monetary policy,
35
increasing policy interest > Remained at the shorter end of
30 the yield curve on investments
by a total of 950 basis
25
points during the year > Repriced loans
20
15
VQEWTDVJGKPƃCVKQPCT[ > Maintained liquidity through
pressure. Additionally, deposit mobilisation.
10
liquidity concerns also
5 > A cautious approach adopted
exerted upward pressure
towards lending to ensure
0 on benchmark rates as
asset quality is maintained.
2021-Jan
2021-Feb
2021-Mar
2021-Apr
2021-May
2021-Jun
2021-Jul
2021-Aug
2021-Sep
2021-Oct
2021-Nov
2021-Dec
2022-Jan
2022-Feb
2022-Mar
2022-Apr
2022-May
2022-Jun
2022-Jul
2022-Aug
2022-Sep
2022-Oct
2022-Nov
2022-Dec
indicated alongside.
AWDR AWPR
365-day Treasury Bills SRR
Bank rate Stakeholders Impacted
Source: CBSL
Extraordinarily high levels Inflation- NCPI & CCPI

vy>Ì
%
100
Devaluation of the rupee, rising 90
Our Response 80
energy prices, excessive money 70
printing and a reduced harvest > Managing cost escalation 60
resulted in a sharp increase in through reduction in 50
energy consumption and 40
consumer prices. Policy intervention 30
VCTIGVGFCVUVCDKNKUKPIKPƃCVKQPJCU paper usage 20
DGGPGHHGEVKXGKPTGFWEKPIKPƃCVKQP 10
> Negotiate with vendors 0
in 4Q of 2022 although it remains
on discounts especially
2021-Jan
2021-Feb
2021-Mar
2021-Apr
2021-May
2021-Jun
2021-Jul
2021-Aug
2021-Sep
2021-Oct
2021-Nov
2021-Dec
2022-Jan
2022-Feb
2022-Mar
2022-Apr
2022-May
2022-Jun
2022-Jul
2022-Aug
2022-Sep
2022-Oct
2022-Nov
2022-Dec
JKIJ*QYGXGTKPƃCVKQPKUGZRGEVGF
on IT contracts
to settle below 10% levels by end of
VJG[GCT NCPI CCPI
Food inflation
Non-Food inflation
Stakeholders Impacted Source: Department of Census & Statistics
Digitalisation
The 4th Industrial revolution witnessed Our Response

the convergence of internet-connected
21.8 Mn technologies including the Internet
> The Bank embarked on a holistic digital transformation and is
PQYTGCRKPIVJGDGPGƂVUQHVJGKPXGUVOGPV
Internet subscribers of Things (IoT), cloud computing, big
> Customer centric digitalisation and onboarding of customers
FCVCTQDQVKEUCPFCTVKƂEKCNKPVGNNKIGPEG
(AI) - digital transformation. Sri > Reduced turnaround times in internal processes and lower
Increase in Internet based Lanka’s integration is underpinned costs though RPAs
payments (Q2, 2022) by high levels of penetration as given > Investments in IT security
indicated:
39.7% 71.4% > Leveraging data .
Volume Value

Increased risk of default
Credit risk is the largest exposure on the Bank’s balance

sheet and a key factor in determining the soundness. Stage 3 Loans to Total Loans and Advances
Increased interest rates, spillover effects of the pandemic
%
and a challenging macroeconomic environment
12
EQODKPGFVQOCMGCFKHƂEWNV[GCTHQTDWUKPGUUGUCPF
individuals. 10
8
Our Response
> Proactive relationship management 6
> Moratoria to customers in need 4

> Managing customers in distress through a special asset 2
management unit
> Tightening credit approval control processes 0
Q1 Q2 Q3
> Multi-layered processes for recoveries
LCB Banking industry
> Processes to recognise early warning signs Source: CBSL
> Prudent provision for impairments
People issues gain

precedence
The economic crisis saw unprecedented migration of skilled ADB estimates

RTQHGUUKQPCNUKPTGUWNVKPIKPUKIPKƂECPVNGCMCIGKPVCNGPV
RKRGNKPGU+PƃCVKQPCPFKPETGCUGFVCZCVKQPCNUQGZGTVGFRTGUUWTG that over
on payroll necessitating a review of the salaries to retain talent and 220,000 people
address urgent employee concerns.
migrated in the
wÀÃÌÌÃv
Stakeholders Impacted 2022 of which
30% were skilled
Our Response workers
> A proactive HR function that engages with the people to understand
their concerns
> 4GECNKDTCVKQPQHUCNCTKGUCPFDGPGƂVUVQCFFTGUUWTIGPVEQPEGTPU
> Salary scale adjustments based on market survey
> Roadmap developed to improve employee engagement score

t¶¯att_͚΄N¢_¢΄π΄tt¯¶kN¯N*¢
/iÃViVVÕÌvÀÌiVÕÌÀÞ>`ÌÃiÌ>ÀÞ>`wÃV>«ViÃ
impact the performance of the banking sector. Forecasts from reputed
agencies have been set out below to guide investors. Due to the volatility of
markets, investors are advised to update themselves on estimates given below
at the time of evaluation as these could change due to numerous factors.
> Unlocking the IMF USD 2.9 Bn Extended Fund Facility is key
A staff-level agreement on a 48-month Extended Fund Facility programme of USD2.9 Bn
between the IMF and GOSL was reached in September 2022. The government is in the
RTQEGUUQHPGIQVKCVKPIYKVJCNNDKNCVGTCNETGFKVQTUHQTƂPCPEKCNCUUWTCPEGUVQWPNQEMVJGHCEKNKV[
> A contracting economy

The economy is estimated to have contracted by 9.2% in 2022 and is expected to contract
HWTVJGTD[KP
> Interest rates adjust downwards

Improved liquidity in the domestic market, moderating deposit rates and monetary
expansion from peak levels are expected to support downward movement of interest rates.
> /QPGVCT[RQNKE[TGOCKPUVKIJVVQTGKPKPKPƃCVKQP
+PƃCVKQPKUHQTGECUVVQFGENKPGKPEQPVKPWKPIVJGVTGPFQDUGTXGFKPVJGVJSWCTVGT
However, revisions of electricity prices, lags in passing down globally increasing food and
GPGTI[RTKEGUCPFUWRRN[FKUTWRVKQPUEQWNFGZGTVWRYCTFRTGUUWTGQPKPƃCVKQP
> External Sector is expected to remain resilient

Measures implemented to curb imports, steady exports and an uptick in tourism and worker
remittances are expected to support improvement in the external outlook.
INDUSTRY OUTLOOK HNB GROUP PLANS

The Banking sector has remained resilient through four consecutive > HNB Group will continue to prioritise maintenance of liquidity and
years of multiple crises and have moderated growth to build ECRKVCNDWHHGTUVQPCXKICVGGZRGEVGFVWTDWNGPEGKP
capital buffers to weather another year of uncertainty and volatility.
Provisions have been made for foreign currency denominated GOSL > The Group will also pursue its long term strategy as set out
UGEWTKVKGUCPFGZRGEVGFETGFKVNQUUGUYJKEJTGFWEGFRTQƂVCDKNKV[ QPRCIGVGORGTKPIITQYVJCURKTCVKQPUVQDGKPNKPGYKVJ
in 2022. Players in the sector have increased the rigour of capital economic conditions and the Group’s strengths.
and liquidity management as well as credit risk. However, there is
PQFQWDVVJCVVJGƂPCPEKCNUGEVQTKUDGKPIUGXGTGN[VGUVGFD[VJG > Sustainable development will be a key focus as this will support
ongoing crisis. the country’s long term socioeconomic stability with shared
prosperity.

Risks and opportunities are two sides of the same coin and the Group will continue to pursue
opportunities while building adequate buffers to manage risks, leverage its considerable
UVTGPIVJUCUCFQOGUVKECNN[UKIPKƂECPVDCPMCPFCƂPCPEKCNUGEVQTEQPINQOGTCVG
Declining interest rates will drive demand for Declining interest rates will reduce net interest
credit supporting portfolio growth in selected Declining margins of the Bank but this will be balanced by
sectors such as exports, local production, interest rates lower risk which will reduce impairments with an
agriculture, tourism etc., stimulating economic overall positive net impact on sustainable growth
growth. in earnings.
Stability in foreign exchange rates will support A moderation in the exchange rate will reduce
growth of imports boosting trade activity and gains from foreign exchange but it will also
fee-based income while also driving stability in Exchange rate reduce the prevailing volatility, paving the way for
the economy movements sustainable growth for customers and the Group.
$QVJOQPGVCT[CPFƂUECNRQNKE[EJCPIGUJCXGCUKIPKƂECPVKORCEV6JGTGEGPVGNGEVTKEKV[
Political VCTKHHKPETGCUGUCPFVJGKPETGCUGFVCZCVKQPYJKEJKUKPGHHGEVHTQO,CPWCT[CTGMG[
and policy EQPEGTPUVQDGYCVEJGF6JGTGKUUKIPKƂECPVWRUKFGRQVGPVKCNKHVJGIQXGTPOGPVUGVUNQPI
uncertainty term consistent policies that stimulate growth while maintaining macro economic stability
YJKEJECPKORTQXGKPXGUVQTEQPƂFGPEGCPFFTKXGKPXGUVOGPVU
The Group has a sizeable opportunity to align strategy to transition the country to a low
Transitioning to carbon economy. It is well positioned with an islandwide presence and a sound digital
a low carbon infrastructure to encourage awareness, forge partnerships and direct investments to steer
economy the transition in the right direction.
This is an area that HNB has developed strengths in over many years to support growth
of MSMEs. The Bank has focused on supporting their growth through access to market,
Developing ECRCEKV[DWKNFKPICPFƂPCPEKPIKPKVKCVKXGUCPFKUEQOOKVVGFVQITQYVJKUUGEVQT9G
MSMEs DGNKGXGVJGTGYKNNDGQRRQTVWPKVKGUVJTQWIJEQPEGUUKQPCT[ƂPCPEKPIVQRTQXKFGJQNKUVKE
solutions for these entities that make up the backbone of our economy.
HNB has a sizeable agriculture portfolio encompassing all sizes of businesses and is well
Food RQUKVKQPGFVQƂPCPEGVJGITQYVJQHVJKUXKVCNUGEVQTVJCVUWRRQTVUHQQFUGEWTKV[VJTQWIJ
security targeted initiatives. The Bank is reviewing the possibilities of strengthening the value
chains to drive the Country’s food security agenda forward.

LISTENING TO STAKEHOLDERS
We engage extensively with our stakeholders to understand their needs and concerns, particularly over the past four years as paradigms
changed, affecting stakeholders in different ways. The HNB Group has responded with alacrity, carefully balancing the interests of key
stakeholders and business sustainability, taking into consideration the elevated levels of risk in the operating environment for both the Group
and the stakeholder.
OUR STAKEHOLDERS CUSTOMERS EMPLOYEES
How we engage
them
NEWS
NEW
W
Dedicated > Branch network > Proactive engagement by HR

mechanisms > %WUVQOGT4GNCVKQPUJKR1HƂEGTUCPF/KETQ(KPCPEG > 'ORNQ[GG'ZRGTKGPEG1HƂEGT
1HƂEGTU > Grievance mechanism
> AI based digital assistant to assist with simple queries > Performance appraisal
> A dedicated customer care centre > Townhall meetings
> Community based activations > CEO Newsletters
> Engagement surveys
> Employee days
Their concerns > Assistance for business revival > Support through successive years of turmoil
> Flexibility in repayments of loans due to economic > (CKTTGOWPGTCVKQPDGPGƂVU
stress > Opportunities for growth
> Access to markets and opportunities for growth > Training & Development
> Ease of access > A caring and nurturing workplace
> Innovative & relevant products > Health, safety and well-being
> 5QWPFƂPCPEKCNCFXKEG
> #EEGUUVQƂPCPEG
> Privacy and security of information
Our Response > Increased engagement with vulnerable customers > Adjustments to employee salaries to cushion
> Establishment of a Special Asset Management Unit to KPƃCVKQPCPFKPETGCUGFVCZCVKQPHQTXWNPGTCDNG
support customers in distress categories
> Flexibility in repayments where deemed appropriate > Adjustments to rewards schemes through market
surveys.
> Ease of access through improved digital channels
> Increased awareness of emotional and
> Financial literacy and capacity building for MSMEs
mental well-being
> Investments in improving information / cyber security
> %TGCVKPIRCVJYC[UHQTITQYVJVJTQWIJVCNGPVƂVOGPV
and succession planning
> Dedicated management development programmes
> Actions on feedback received through engagement
surveys
More Information $WUKPGUUNKPGTGXKGYUQPRCIGUVQ Human Capital Report on page 56

INVESTORS REGULATORS BUSINESS PARTNERS COMMUNITY
From:
To:
Lorem ipsum dolor sit amet, consect

consectes
adipiscing elit, sed do eiusmod tempo
tempor
incididunt ut labore et dolore mansi.
> Annual General Meeting > Compliance department headed by > Supplier registration > Community
> Annual Report a corporate management member process activities
> Quarterly Financial Statements and > Continuous engagement with > Request for proposals > Islandwide presence
press release regulators at senior levels of the > Feedback where to facilitate last mile
Group relevant FGNKXGT[QHƂPCPEKCN
> Announcements through the
> Timely regulatory reporting services
Colombo Stock Exchange
> Dedicated Investor relations > Access to information
webpage > Responses to queries and reviews
> Investor relations meetings carried out
> Quarterly webinars
> Sound corporate governance > Contribution to resolution of > Opportunities to grow > Inclusive banking
> Liquidity, asset quality and capital multiple crises > Fair terms of trade > Partnering
management > 5VCDKNKV[QHVJGƂPCPEKCNUGEVQT > Timely payments sustainable
> Financial performance and returns > Regulatory compliance development
> Constructive feedback
> Share price and liquidity > Effective implementation of new to improve > Strategic
directions and regulations Philanthropy
> Impact on environment and society
> Partnering sustainable development > Responsible
initiatives of the Government corporate citizen
> Timely statutory reporting
> Timely reporting of performance > Supporting government to raise > E-procurement > Broad MSME
> Clear focus on risk, capital and dollars for imports of fuel, gas and system strengthening development
liquidity management other essentials transparency in initiatives
> Maintaining sound liquidity and procurement process > Financial literacy
> Increased rigour of performance
oversight capital buffers > Increased number and capacity
> Aligning strategy to the sustainable of collaborations, building activities
> Aligning strategy to the sustainable
development needs of the country RCTVKEWNCTN[QPƂPVGEJ > Strategic
development needs of the country
> Effective implementation of philanthropy
directions issued to curtail the crises for Health,
Entrepreneurship,
Environment and
Education
CEO’s & Chairperson’s Messages on CEO’s & Chairperson’s Messages Social & Relationship Social & Relationship
pages 14 to 22 and Financial Capital on pages 14 to 22 and Governance %CRKVCNQPRCIG %CRKVCNQPRCIG
Report on page 45 Report on page 86

DETERMINING MATERIALITY
/CVGTKCNOCVVGTUUGVQWVJGTGTGƃGEVVJG 2022
Board priorities within the context of the Our Material Matters
Rank
crises that developed in 2022, progress
made in the second half and residual Economic Stress & Uncertainty
uncertainties. Sri Lanka’s economy remains scarred by the events of the past 4 years and has
defaulted on repayment of external debt. The coming months are critical to
1 2 3 VJGƂPCPEKCNUVCDKNKV[QHVJGEQWPVT[
Stakeholder How we Opportunities
concerns create value & Risks Credit Risk
Credit risk due to the extreme economic vulnerability facing the country
coupled with the fact that this is the highest exposure on the balance sheet of
a bank, makes this a critical risk.
Financial Stability & Integrated Risk Management

Heightened levels of volatility and uncertainty in both the outlook for the
country’s economy and the global economy together with rising geopolitical
tensions makes disciplined risk management a priority to maintain stability of
VJGƂPCPEKCNUGEVQT
Long list of potential material matters
Technology and Future Readiness
This is critical to service delivery, customer experience and the insights we
need to navigate the uncertainty in the year ahead
Customer Experience
Because making banking enjoyable is key to our strategy.
Brand & Reputation

This impacts our ability to create value as banking business is highly
dependent upon trust
Materiality Test
Employee wellbeing, Talent attraction, development and retention
Impact on strategic goals
Common Interests As a service organisation, nurturing our value creators is key to success
Trade Offs
Managing accountability, oversight and reporting
Ethics, Governance & Compliance
A strong foundation for creating value ensuring Transparency, Accountability,
and Compliance
HIGH
Inclusive growth and responsible lending

It is necessary to balance our depositors and investors concerns with
responsible lending practices for sustainable growth
Stakeholder Concern
Business network relationships

Managing relationships with correspondent banks, franchise owners,
merchants, agents and suppliers and other business partners is vital for
growth
Climate Action
Assessing environmental impacts of businesses we lend to, managing our
own consumption and taking positive action.
Innovation
LOW HIGH Innovation is key to honing our competitive edge and ensuring we remain
relevant to changing customer requirements.
Concern for HNB Group
Stakeholder health and safety which was considered as a separate material matter last year has
been brought under employee well-being,
Sustainable
GRI Topic SDG Goals SDG Targets
Banking Principles

2-16 1.5 1
201-1 1
8.2
2-26, 2-29, 418-1 10.2 4
2-26, 2-28 - - 4
4.4, 8.4, 8.5,8.6

1,405-2,412-2
16.5, 16.6,16.7

2-14, 2-15, 2-16, 2-17, 2-18

2-22, 2-25

12.4, 14.4, 15.1,
15.2, 15.5, 16.2
2-6 17.16 9,11
1.5, 2.4, 1,2,7

201-2 8.2,9.4, 12.2,

17.8

AN INTEGRATED STRATEGY
This is the long-term strategy of the Bank which has been designed to deliver value to all stakeholders. We revisited
and revalidated our model and the strategic plan in the face of the crisis. Our sights are focused on what Sri Lankan
businesses need to drive, contributing to GDP growth that will support recovery for all Sri Lankans.
> No 1 Bank in Sri Lanka

4 Technology
Enablement > Most Customer Centric Bank
> Most Preferred Employer
4 People > Best Digital Bank
Development
> Most Resilient and Sustainable Bank
3 Improve Customer
Experience &
Productivity
1 > Business
2 Business Growth Sustainability
RESOURCE ALLOCATION
7RQPƂPCNKUCVKQPQHVJGUVTCVGIKERNCPVJGCEVKQPUCTGRTKQTKVKUGFDCUGFQPVJGKORCEVQPUVCMGJQNFGTUTGVWTPQPKPXGUVOGPVGVE%CRKVCNHWPFU
would be allocated accordingly and human resources would be allocated based on the nature of the initiative, the skill levels required etc.
BUSINESS GROWTH IMPROVE CUSTOMER EXPERIENCE & PRODUCTIVITY
Objective: Objective:
To be the #1 Bank among private sector banks in Sri Lanka To be the most customer centric bank in Sri Lanka
Medium Term Goals: Medium Term Goals:

/QUVRTQƂVCDNG$CPMCPF)TQWRCOQPIRTKXCVGUGEVQTDCPMU NPS > 65%
%QUVVQKPEQOG
Alignment to SDG Targets:
Plan 2022:
> Continuous improvement of processes
Plan 2022:
> Cost optimisation and automation
> &TKXGHQTGKIPEWTTGPE[ƃQYU
> New brand rollout
> Improve liquidity through deposits
> Support key sectors of the economy Score 2022:
> NPS : 62%
Score 2022:
> CSAT : 99.7%
> )TQWR2TQƂVU4U$P
> Cost to income : 22%
> ROE : 9%
> &GRQUKVITQYVJ Plans 2023:
> Continuous improvement of processes
Plans 2023:
> Automation
> Support national growth
> Customer relationship management
> Optimising group returns
Stakeholders Impacted: Stakeholders Impacted:
Capitals Impacted: Capitals Impacted:

BUSINESS SUSTAINABILITY
Business Sustainability encompasses Environment, Social and Governance (ESG) and Risk Management. These
are the foundations which support our strategic growth pillars, anchoring our values, systems and processes and
RGTHQTOCPEGQXGTUKIJV+VCNKIPUUVTCVGI[YKVJVJGHQNNQYKPI5&)oUYKVJGCEJRKNNCTENGCTN[CNKIPGFVQCURGEKƂEVCTIGV
Objective: Alignment to SDG Targets: Score 2022:

To be the most resilient and D > Best Corporate Citizen in Sri Lanka
sustainable bank > 5VCIG+++TCVKQ
> .#4.%4
Medium Term Goals: Plan 2022:
Best Asset Quality among > Strong governance Plans 2023:
peers Stable capital and > Robust risk management > Enhance governance structures
liquidity levels Zero GhG
> Support business revival > Strong Risk Management
scope 1 and 2
> Liquidity, Asset Quality, Capital
Stakeholders Impacted: Capitals Impacted: management
> Manage impact on society and
environment
PEOPLE DEVELOPMENT TECHNOLOGY ENABLEMENT
Objective: Objective:
To be the most preferred employer To be the best digital bank in Sri Lanka
Medium Medium
Employee engagement score > 70% Active customers > 1.5 Mn
Alignment to SDG Targets: Alignment to SDG Targets:

5.1, 8.5 8.2, 17.8
Plan 2022:
Plan 2022:
> Stabilise core systems
> Capability development
> Strategic workforce planning > Develop enabling systems
> Succession planning > Improve analytic capabilities
> Drive digital usage and enhance capabilities
Score 2022:
Score 2022:
> Retention : >90%
> Training hours per employee : 24 > Growth in digital transactions 105%
> Promotions : 676 > Customers onboarded 178k
> Investment in technology Rs 682 Mn
Plans 2023:
> Retention and Rewards Plans 2023:
> Talent Development > Drive digital adoption
> Succession Planning > Data and analytics
> Employee engagement and wellness > Stabilise core systems/develop enabling systems
Stakeholders Impacted: Stakeholders Impacted:
Capitals Impacted: Capitals Impacted:

VALUE CREATION MODEL
VISION 6QDGVJGCEMPQYNGFIGFNGCFGTCPFEJQUGPRCTVPGTKPRTQXKFKPIƂPCPEKCNUQNWVKQPUVJTQWIJKPURKTGFRGQRNG
OUR STRATEGY
CAPITALS
FINANCIAL CAPITAL
The funding sources from investors Customer
Business People Technology
and customers Experience &
Growth Development Enablement
> Equity Rs159 Bn Productivity
> Customer Deposits Rs 1,408 Bn
> 1VJGT$QTTQYKPIU4U$P
HOW WE
SOCIAL & RELATIONSHIP CREATE VALUE
CAPITAL
Relationships that are necessary to
thrive
nce
> Over 2.6 Mn Customers
> Correspondent Banks in 75 na
Countries v er HNB PLC
> 7,400+ Card Merchants and Go
e
51.1/GTEJCPVU at
g
or
in
nk
rp
HNB Assurance PLC

a
Co
HUMAN CAPITAL
B
The Board and Employees of the

il
HNB Group
ta
Re
> Skilled & Diverse Board HNB Finance PLC

> 5,156 Employees
c e
ce
an
n
ura
DIGITAL CAPITAL
Fin
Sithma Development
Software, networks and platforms
l Ins
(Pvt) Ltd
ro
that drive our operations

Mic
> Investment Rs 682 Mn (Capex)

Genera
> Mobile and Internet banking

platforms
> Core business systems
> Supporting applications
state
Dep
E
INTELLECTUAL CAPITAL
al
Our brand and organisational

e
osi
capabilities
R
e
t
nc
> Systems and processes

M
na
> Tacit knowledge of team

ob
Fi ilis
E at i
SM on
NATURAL CAPITAL
g
Energy and water usage necessary L if

kin
for business continuity Ins

e
n
> Electricity Consumption

t
u ra
en
B nce
> Fuel Consumption le
m
a
> Water Consumption
ge
les a Tr
ea
ho an s
W M ury
MANUFACTURED CAPITAL k
Property, plant and equipment
Ris
necessary for conducting business
> 255 Branches
> 787 SSMs
> Total Value of PP&E Rs 24.8 Bn

Combining entrepreneurial spirit with empowered people and leading edge technology to constantly
MISSION exceed stakeholder expectations.
OUTPUT OUTCOMES STAKEHOLDERS IMPACTED

FINANCIAL CAPITAL
Business
> 2TQƂV#HVGT6CZ4U$P
Sustainability > Earnings Per Share drop by 19%
> Net Assets Per Share improve by 5%
>Rs 191 Bn
LKR deposits mobilised SOCIAL & RELATIONSHIP CAPITAL
> Improved NPS to 62%
> Deeper relationships
>Rs 536 Bn
disbursed in loans
Su
HUMAN CAPITAL
sta
> 676 Promotions

ina
> QHXCNWGETGCVGFFKUVTKDWVGFVQ
bili
>Rs 5.6 Bn employees

ty
> 9.5% attrition

KPKPUWTCPEGDGPGƂVUCPF
claims DIGITAL CAPITAL
> 92% of withdrawals and 75% deposits
through Self Service Machines
> 105% increase in digital banking
transactions
>19.9 Mn > 1XGTVGTOFGRQUKVUQRGPGFQPNKPG
digital transactions
> Brand value increased by Rs 1.1Bn
Shar
> Improved systems and processes

>Rs 9.4 Bn
e
> Improved knowledge

dV
renewable energy
al ue
portfolio
s
NATURAL CAPITAL
> %CTDQPHQQVRTKPVV%12e
> Solar energy generated 1,846 MWh
MANUFACTURED CAPITAL
> Revaluation surplus
> Depreciation

BUSINESS LINE REVIEW
RETAIL BANKING
,iÌ>L>}Ã>y>}Ã«Ãi}iÌvÀ ]V>ÌiÀ}ÌÌiii`ÃvÛiÀ
2.5 Mn Sri Lankans island-wide. HNB Retail offers its customers the full gamut
vw>V>«À`ÕVÌÃ>`ÃiÀÛViÃVÕ`}Ã>Û}Ã>`ì«ÃÌ«À`ÕVÌÃ]
loans and advances and a range of transactional products. Responding to the
evolving needs of our customers we continued to enhance our digital value
proposition through innovative products and services.
CONTEXT
2022 HIGHLIGHTS
+PƃCVKQPCT[RTGUUWTGUVJGFQNNCTETKUKUCPFUNWIIKUJGEQPQOKEEQPFKVKQPUEQPVKPWGFVQCHHGEV
the operating environment, impacting portfolio growth and margins of the retail segment. Earnings
Rs Bn
DELIVERING RESULTS IN 2022 50
40
Performance Highlights 2022 2021 % Change 30
20
NII 14,298 151.7% 10
0
Total operating income 41,969 18,814 -10
2018 2019 2020 2021 2022
Impairment Charge 1,272 178.1%
NII
Advances 274,656 15.2% Fee & commission income
Deposits 21.5% Impairment charge
Total operating income
NII recorded a 151.7% growth supported app and payment solutions. Several new
by the sharp increase in interest rates and features were added to SOLO during Portfolio
commendable portfolio growth in the the year including Peer-to-Peer (P2P) Rs Bn
cards and gold loan segments. As the rates transfers, wallet features, and card-less ATM 1,000
KPETGCUGFUKIPKƂECPVN[VJG$CPMCFQRVGFC withdrawals. Our internet banking solution 800
cautious approach towards retail lending also moved to a new platform with improved
600
in the second half of the year. Fee and functionality and usability.
Commission income meanwhile grew by 400
CNOQUVUWRRQTVGFD[ITQYVJKP BEYOND 2022 200
bancassurance, higher credit card volumes 0
and increased use of digital platforms. Customer relationships will remain a
2018 2019 2020 2021 2022
Consequently, despite an 178.1% increase in priority especially given the additional Advances Deposits
impairment charges, net operating income stress on disposable income levels with
HQTVJGRGTKQFCOQWPVGFVQ4U/PC increased taxes. The Bank will work closely
with the affected customers to ensure that > Recognised as the Best Retail
119.1% YoY growth compared to 2021. The Bank in Sri Lanka for the 12th time
Bank continued to grow its total deposit their repayment plans are in line with the
ECUJƃQYU4GVCKNYKNNEQPVKPWGVQGPJCPEGKVU by ‘The Asian Banker Magazine’
base through targeted deposit mobilisation
efforts. Three new products including digital value proposition to cater to evolving > Market leader in credit card
a Premier Current Account, Investment customer requirements whilst driving acquiring
Plans for adults and children and a Teen + differentiation through superior customer > Leader among commercial
savings account with a linked debit card service and convenience. Meanwhile we banks in Leasing
were added to our retail banking portfolio. remain focused on strengthening our
presence in the payment space and will > Highest rated digital app and
As remittances into the country declined digital wallet among peers
during the year, the Bank continued to focus continue to explore new collaborations and
on attracting remittances by leveraging our partnerships that will transform the banking
relationships with exchange houses, experience of our customers.
relaunching HNB Adhistana, a special
savings package for migrant workers
and offering innovative schemes such as
the Remittance Draw scheme. We also
continued to enhance our digital offering,
with added features to our Digital Banking

CORPORATE BANKING
Corporate Banking faced multiple challenges from the start of 2022. The
foreign exchange crisis and the resultant moderation in imports, the end of
the period of moratoria by Central Bank and macroeconomic stress including
the sharp rise in interest rates affected a number of customers. Despite these
challenges, this key business line played an important role in supporting
growth in exports, energy and food security in the country.
CONTEXT
2022 HIGHLIGHTS
6JGGEQPQOKEETKUKUVJCVWPHQNFGFKPRQUGFUKIPKƂECPVEJCNNGPIGUYJKEJYGTGQXGTEQOG
to a large extent through proactive measures to rehabilitate businesses in sectors operating Earnings
WPFGTUVTGUU5KOWNVCPGQWUN[YGKFGPVKƂGFQRRQTVWPKVKGUCPFCNKIPGFKPXGUVOGPVUKPVQ Rs Bn
priority sectors. The foreign exchange liquidity crisis from the beginning of the year impacted 25
the Bank’s ability to support its import customers. The sharp increase in interest rates and 20
RGTUKUVGPVN[JKIJKPƃCVKQPKORCEVGFVJGRGTHQTOCPEGQHEWUVQOGTUNGCFKPIVQKPETGCUGF 15
10
5VCIGNQCPU6JGTGYCUCNUQCPGGFVQUVGRWRVQCNKIPHWPFKPIVQUGEVQTUYJGTGITQYVJ 5
was vital to the economic recovery of the country such as import substitution, food and 0
agriculture and exports. Digitalisation continued to be a priority for customers who were 2018 2019 2020 2021 2022
embarking on their own journeys. NII
Fee & commission income
DELIVERING RESULTS IN 2022 Impairment charge
Rs Mn 2022 2021 % Change
NII 9,242 5,881 57.2% Portfolio

Total operating income 9,820 9,572 2.6% Rs Bn
600
Impairment Charge 19,727 6,229 216.7%
500
Advances 551,729 445,909 400
Deposits 254,528 169,176 50.5% 300
200
Corporate Banking realigned its growth, implemented. Retention of talent proved a 100
RTKQTKVKUKPIGZRQTVUVQFTKXGVTCFGƂPCPEG challenge amidst the economic migration 0
activity and enhance dollar liquidity to that took place in 2022. We continue to 2018 2019 2020 2021 2022
support urgent needs of importers. Success focus on cross fertilisation of knowledge, Advances Deposits
of these measures is evinced by the increase skill development and high levels of
in the Bank’s share of the country’s exports engagement to drive growth of this highly > Launch of Cord360, B2B platform
HTQOVQ%WUVQOGTUCHHGEVGFD[ motivated team. to facilitate market opportunities
the macroeconomic stress were advised and for HNB export customers
supported together with the expertise of the BEYOND 2022 > State-of-the-art Payment and Cash
Special Assets Management unit to assist Management solution is being
rehabilitation and recovery where necessary. 9GJCXGURGEKƂGFRTKQTKV[UGEVQTUVQFTKXG
prudent growth given the high level of implemented
Export growth was further supported by
establishing desks in Chinese and Japanese uncertainty prevailing over macroeconomic
markets. Import customers were supported factors. The focus on customer convenience
by the establishment of special accounts continues and we plan to launch the next
required by the Reserve Bank of India to phase of Trade Online to improve the
utilise the credit line given to Sri Lanka. functionality of the module while also
increasing the onboarding activities. We will
Impairments were a key challenge, weighing continue to create opportunities for market
FQYPRTQƂVCDKNKV[QHVJGXGTVKECN.KCDKNKV[ CEEGUUYKVJRTQFWEVUUWEJCU%QTFC$$
growth was a higlight, supporting liquidity RNCVHQTOYKVJCWVJGPVKECPFXGTKƂGFDW[GTU
as a number of customers opted to move to support exporters with access to markets.
their main bank accounts to HNB. A new We will also focus on new prospects such
Payments and Cash Management solution as the Port City. Our people development
which is among the most sophisticated initiatives will continue with a multifaceted
systems in the country is currently being plan to support their career progress.

SME
The expertise we have built over decades of supporting SME’s

in the country, together with our comprehensive portfolio of
OPEN
relevant products enable us to continue to support this vital sector.
During the year the Bank continued to strengthen partnerships to
implement impactful initiatives aimed at reviving the industry.
CONTEXT
2022 HIGHLIGHTS
$QTTQYKPICRRGVKVGCPFTGRC[OGPVECRCEKVKGUQH5/'oUYGTGUKIPKƂECPVN[KORCEVGFD[VJG
subdued economic conditions and high interest rate environment that prevailed in 2022. Earnings
DELIVERING RESULTS IN 2022 Rs Bn

20
Rs Mn 2022 2021 % Change 15
10
NII 10,427
5
Total operating income 14,411 0
2018 2019 2020 2021 2022
Impairment Charge 7,961 121.9% NII
Advances 228,894 228,282 Fee & commission income
Impairment charge
Deposits 258,491 190,505 Total operating income
SME loans and advances growth slowed session with agri-SMEs on pre-harvest and
Portfolio
in 2022 amidst lower demand and a more post-harvest technologies.
cautious approach to lending during Rs Bn
300
the year. A notable growth witnessed in The partnership with USAID catalyst (PSD)
250
QWTGZRQTVVTCFGCPFUWRRNKGTƂPCPEKPI enabled the Bank to provide subsidised
200
businesses resulted in a 70.5% growth in fee UGTXKEGUKP'425QNWVKQPUCPFEGTVKƂECVKQPU
150
and commission income which contributed We also continued to support SME’s adopt
100
VQVJG5/'UGIOGPVTGEQTFKPIC digital methods of cashless transactions
growth in operating income despite by customising our digital products to the 50
challenging market conditions. Asset needs of SMEs, expanding our partnerships 0
2018 2019 2020 2021 2022
quality continued to be a challenge during with ERP service providers and leading
Advances Deposits
the year, however proactive efforts were internet payment gateways.
made to engage with customers through
concessions and moratoriums to ensure BEYOND 2022 > Launched an affordable Group
smooth repayments. New initiative in equity The SME sector will continue to be a key Term Policy for SMEs to facilitate
ƂPCPEKPIYCUOCFGCXCKNCDNGVJTQWIJ area of focus for the bank considering risk protection coverage for a
partnering investors to infuse capital to its integral role in reviving the country’s minimum of 10 employees.
SMEs. This enabled to reduce their debt GEQPQO[9GUGGUKIPKƂECPVRQVGPVKCNHQT > Facilitated local and overseas
exposures creating a sustainable business SME growth in industries such as tourism, market linkage opportunities
model. On the liabilities side, although agriculture, export-based manufacture and through partnerships with
CASA growth decelerated due to higher services and will continue to support the e-commerce platforms such as
deposit rates, total deposits grew by almost Government in its efforts to strengthen the Daraz, SLT, Cord360 and initiatives
FWGVQƃKIJVVQSWCNKV[ sector through our business revival efforts, such as SOLO podi podi Business
concessionary funding, capacity building
We continued to support SME’s revival > Launched affordable POS solutions
programmes and by facilitating greater
efforts through impactful initiatives aimed to SME customers in partnership
digital adoption among SMEs.
at providing concessionary funding to key with WEBXPAY
sectors, facilitating market linkages and by > Partnered with Bileeta (Pvt) Ltd to
carrying out region wise capacity building offer SME customers ERP solutions
RTQITCOOGUCKOGFCVDWKNFKPIƂPCPEKCN at discounted rates
literacy and digital capabilities of the sector.
We partnered with Sri Lanka Agripreneurs’
Forum (SLAF) in facilitating a technical

MICROFINANCE
VÀw>ViVÌÕiÃÌÃÕ««ÀÌVÀ
entrepreneurs and small scale businesses across
the country by offering an all-encompassing
value proposition that includes access to
w>Vi]}}V>«>VÌÞLÕ`}«À}À>iÃ
and market linkages.
MARKET REVIEW
2022 HIGHLIGHTS
The subdued economic conditions that prevailed through much of 2022 negatively impacted
VJGOKETQƂPCPEGUGEVQTFCORGPKPIFGOCPFCPFRNCEKPICUVTCKPQPTGRC[OGPVECRCDKNKVKGU Earnings
of customers. Rs Bn
1.6
DELIVERING RESULTS IN 2022 1.4
1.2
1.0
Rs Mn 2022 2021 % Change 0.8
0.6
NII 862 857 0.5% 0.4
0.2
Total operating income 1,059 1,019 4.0% 2018 2019 2020 2021 2022
NII
Impairment Charge 410 697 -41.1%
Advances 26,116 29,077 -10.2% Impairment charge
Deposits 15,286 9,971
A more cautious approach to lending and BEYOND 2022 Portfolio

lower demand for loans amidst higher Maintaining portfolio quality whilst driving Rs Bn
lending rates resulted in a moderation of growth in the sector will remain the key focus 35
advances to the sector. Deposits however 30
KP9GYKNNEQPVKPWGVQNGXGTCIGQWT 25
ITGYD[CNOQUVDWQ[GFD[JKIJGT XCNWGEJCKPUWRRN[ƂPCPEKPIRCTVPGTUJKRU 20
FGRQUKVTCVGUCPFƃKIJVVQSWCNKV[YKVPGUUGF with large corporates to drive cross selling 15
in the industry. A greater focus on cross while enhancing our value proposition to our 10
selling efforts particularly through value micro customers through innovative product 5
EJCKPUWRRN[ƂPCPEGNKPMCIGUTGUWNVGFKP 0
offerings and greater digitisation. 2018 2019 2020 2021 2022
a 95.6% growth in SOLO users. Despite the
Advances Deposits
KPETGCUKPINGXGNQHƂPCPEKCNUVTGUUHCEGFD[
customers, the Bank was able to manage
the Stage III loan portfolio due to targeted > £äÓw>V>ÌiÀ>VÞ>`V>«>VÌÞ
efforts to closely monitoring asset quality building programmes held
and proactively addressing signs of stress. LiiwÌÌ}x]n{£VÕÃÌiÀÃ
> ÎVÀw>ViÀiVÛiÀÞV>«Ã
held across the Country
> "ÛiÀÓ]äääv>ÀiÀÃLiiwÌi`
from value chain agreements with
corporates
> SOLO PODI PODI BUSINESS
launched during the year to help
small businesses grow and adopt to
cashless transactions
> Scaled-up and graduated 272
VÀw>ViViÌÃÌ- vÀ
VÀw>ViÃi}iÌ

TREASURY
With the primary responsibility of managing liquidity, forex and cost

of funds of the Bank, Treasury played a pivotal role in navigating
the volatility and uncertainty in 2022. Treasury is also a market
>iÀÌiVÕÌÀÞ½Ãw>V>>ÀiÌÃ`ÕiÌÌi}ÛÕiÃv
transactions handled. A skilled and experienced team is supported
by a fully automated platform enabling delivery of innovative
solutions to customers.
CONTEXT
2022 HIGHLIGHTS
Extreme volatility in both foreign exchange rates and interest rates and CBSL suspending
repayment of foreign currency denominated debt resulted in the downgrading of the Earnings
UQXGTGKIPTCVKPIYJKEJOCFGCEEGUUVQHQTGKIPOCTMGVUOQTGFKHƂEWNVFWTKPIVJG[GCT
Rs Bn
50
DELIVERING RESULTS IN 2022 40
Rs Mn 2022 2021 % Change 30
20
NII 44,744 18,441 142.6% 10
0
Total operating income 48,990 21,292 2018 2019 2020 2021 2022
Impairment Charge 58,824 6,965 744.6% NII
FX profit
Trading Gains 12 425.0% Total operating income
The paucity of foreign exchange in the BEYOND 2022 GOSL Investments (LKR)
market reached critical levels and banks Foreign remittance growth in the 4th Rs Mn
needed to prioritise allocation of dollars in 300,000
quarter of the year has been encouraging,
line with national priorities. The Treasury 250,000
signaling effectiveness of measures 200,000
ensured that the Bank honoured demands KORNGOGPVGFVQTGICKPEQPƂFGPEG6JG 150,000
of its correspondent banks and depositors contraction in demand has also supported 100,000
and supported essential imports to the increase in foreign exchange liquidity as 50,000
EQWPVT[OCKPVCKPKPIEQPƂFGPEGYKVJXKVCN controls were gradually eased towards the 0
stakeholders throughout the year. In 2022, ENQUGQHVJG[GCT9GGZRGEVVQDGC 2018 2019 2020 2021 2022
the Bank made a prudent provision of Rs 59 challenging year as well with impending Treasury Bills Treasury bond
Bn increasing its impairment on investments ƂPCNKUCVKQPQHFGDVTGUVTWEVWTKPICPFVJG
KPKPVGTPCVKQPCNUQXGTGKIPDQPFUVQ impact stemming from it, in addition to the GOSL Investments (FCY)
impact of the projected global economic USD Mn
The increase in policy rates during the
downturn. Treasury is positioned to meet the 1,200
year, resulted in government security rates
challenges, focusing on maintaining liquidity
KPETGCUKPIGZRQPGPVKCNN[VQVJGJKIJGUV 1,000
CPFUVCMGJQNFGTEQPƂFGPEGVQUWRRQTV
witnessed by the country in recent times. As
operations of our customers and the Bank. 800
the treasury maintained its investments in
UJQTVFWTCVKQPKVYCUCDNGVQDGPGƂVHTQOVJG 600
KPVGTGUVTCVGUWTIGEQPVTKDWVKPIUKIPKƂECPVN[ 400
towards the Bank’s NII, cushioning the
impact of the impairment charges on 200
investments in internal sovereign bonds. 0
2018 2019 2020 2021 2022
ISB SLDB
> Digitalisation of operations using

state of the art technology enables
ÌiÌi>ÌvÕVÌivwViÌÞ>`
even remotely
> Plays a vital role in managing
foreign transaction and investment
needs of customers

INSURANCE
HNB Assurance outperformed industry norms pursuing its

aspiration of becoming a Tier I player with over 10% market
share in the medium term. Commitment to executing a customer
experience focused strategy, digitalisation and capacity building of
a growing sales force were critical factors that supported delivery
v{n°Ó¯}ÀÜÌ«ÀwÌ>LÌÞ>`Ó{¯}ÀÃÃÜÀÌÌi«ÀiÕ°
CONTEXT
2022 HIGHLIGHTS
The Insurance industry in the Country recorded Gross Written Premium growth of 9% for Life
CPFHQT)GPGTCN+PUWTCPEGFGURKVGVJGWPHQNFKPIGEQPQOKEETKUKU+PVJKUDCEMFTQR*0$# Capital Adequacy Ratios & Capital Structure
posted 26% growth in Life and 21% growth in General Insurance GWP, recording the highest
Rs Mn %
growth among medium and large players in the respective industries. Claims in Life trended 40,000 400
WRYCTFTGƃGEVKPIVJGFGETGCUGKPFKURQUCDNGKPEQOGQHEWUVQOGTUYJKNGKPETGCUGFENCKOUKP 35,000 350
30,000 300
)GPGTCNTGƃGEVGFVJGJKIJGTEQUVQHTGRCKTUCPFPQTOCNKUCVKQPQHVTCHƂE+PXGUVOGPVKPEQOG 25,000 250
YCUUWRRQTVGFD[JKIJGTKPVGTGUVTCVGUDQQUVKPIRTQƂVCDKNKV[QHVJGUGEVQT*0$#RQUVGF 20,000 200
ITQYVJKPRTQƂVCDKNKV[ 15,000 150
10,000 100
5,000 50
DELIVERING RESULTS IN 2022 0 0
2018 2019 2020 2021 2022
Rs Mn 2022 2021 % Change Other liabilities CAR Life %
Contract liabilities CAR General %
Gross Written Premiums 12,647
Equity
PAT 1,810 1,222 48.2%
Total Comprehensive Income 2,218 1,172 89.2% Gross Written Premium
Total Assets 41,698 Rs Mn %
18,000 250
16,000 200
Insurance Contract Liabilities 14,000
12,000 150
- Life 20.8% 10,000 100
8,000 50
- General 4,182 11.9% 6,000 0
4,000
Equity 8,070 4.0% 2,000 -50
0 -100
ROE 22% 15% 2018 2019 2020 2021 2022
General PAT grwoth %
Focused sales growth through both the incubator branches to its network of 64 brick Life ROE %
Agency channel and the Bancassurance and mortar branches which serve to increase
channel were notable success factors coverage, supporting growth in selected
> 1,328 Employees
for growth of new business. The agency customer segments. HNBA launched
EJCPPGNPQYEQWPVUQXGTCIGPVU SupremeHealth Unlimited, an all-inclusive > Female Representation: 40%
who are trained to deliver focused growth. medical rider covering an array of special > 98% of new business proposals
HNBA was able to harness synergies with DGPGƂVUYKFGN[JCKNGFCUVJGDGUVKPVJG generated digitally
the Bank, maintaining its positioning as market.
> Upgrading of core systems for Life
the leading Bancassurance partner in the
and General Insurance Business
country as recognised by the Global Banking BEYOND 2022
and Finance Review. The Bancassurance
channel accounts for around 40% of new HNBA is committed to pursuit of its
business from Life and around 20% of GI. strategy that has delivered strong growth
The Agency and Bancassurance channels and shared stakeholder value. Driving
produced 194 MDRT winners with the synergies with the wider Group will be a
Bank producing 111 winners out of the key focus area in addition to maintaining
VQVCNTGƃGEVKPIVJGGHHGEVKXGPGUUQHVJKU other key partnerships that has proved a
channel. Other alternative channels also key differentiator. Sound governance, risk
demonstrated encouraging growth during management, and ethics continue to be the
VJG[GCTTGƃGEVKPIVJGGHHGEVKXGPGUUQH bedrock on which we build our business as
PQPVTCFKVKQPCNUVTCVGIKGU*0$#CFFGF we level up in market share.

FINANCE
>ViV>ÌiÀÃÌÌiw>V>ii`ÃvÌiÃivi«Þi`]
VÀiÌÀi«ÀiiÕÀÃ>`- Ã>`vviÀÃ>vÕ«ÀÌvvw>V>
«À`ÕVÌÃ>`ÃiÀÛViÃVÕ`}Ã>Û}Ã]wÝi`ì«ÃÌÃ]VÀw>Vi
loans, gold loans, home mortgages, traditional personal and business
loans and vehicle leases. Performance of the company remained
subdued in 2022, amidst a challenging operating environment.
CONTEXT
2022 HIGHLIGHTS
2022 was a challenging year amidst policy measures such as monetary policy tightening and
import restrictions. Meanwhile sluggish economic conditions continued to impact repayment Earnings
capacity of customers, also negatively impacting performance during the year.
Rs Mn
6,000
DELIVERING RESULTS IN 2022 5,000
4,000
Rs Mn 2022 2021 % Change 3,000
2,000
NII -8.4% 1,000
0
Fee & Commission Income 424 -18.2% 2018 2019 2020 2021 2022
PAT NII
(526) 514 -202.5%
ROE 10.7% Impairment charge
Advances 18.4%
Deposits Portfolio
NPA 15.1% 14.8% Rs Mn
50,000
The sharp increase in policy rates resulted BEYOND 2022 40,000
in deposits being repriced much faster than With interest rates expected to remain 30,000
CUUGVUCUOQUVQHVJGCFXCPEGUCTGQPƂZGF GNGXCVGFVJTQWIJCOCLQTRCTVQHYG 20,000
terms. This resulted in a drop in NII YoY. are proactively re-pricing our loan portfolio
Increase in impairment charges amidst rising 10,000
VQDGVVGTTGƃGEVOCTMGVTCVGU9GYKNNCNUQ
NPLs also contributed to the loss of Rs 526 continue to focus on growing our gold loans 0
Mn in 2022. Total assets increased by 19% 2018 2019 2020 2021 2022
and micro loans portfolios as these product
VQ4U/POCKPN[FWGVQVJGOGTIGTYKVJ Advances Deposits
categories witness relatively higher demand
Prime Finance PLC during the year. Similarly, during periods of economic downturn. Our
deposits also witnessed an increase of recent amalgamation with Prime Finance
almost 18%. Despite borrowers’ repayment >
iÀÌwi`>Ã>Ài>Ì*>Vi/7À
PLC meanwhile strengthens our position
ECRCEKV[DGKPIUKIPKƂECPVN[EJCNNGPIGF particularly in the micro leasing space and > Silver award at TAGS-CA Annual
during the year, NPA was closely managed we will continue to leverage our combined Report Awards 2022 in the NBFI
by proactively providing moratoria, closely expertise and market presence to growth category
monitoring the portfolio for signs of stress this segment. > Amalgamated with Prime Finance
and through aggressive recoveries. As a PLC as part of CBSL’s consolidation
result NPA at the end of the year was 15.1%
programme
compared to 14.8% as at the end of 2021.

REAL ESTATE
Sithma Developers Ltd, the Group’s Real estate arm owns and manages the
iconic ‘A’ Grade Smart Building “HNB Towers” in Colombo 10 while also
managing over 48 branch premises located at bank owned properties across
the island. The company performed well during the year recording a 19.5%
growth in PBT. The company’s consistent focus on offering smart, safe and secure
business spaces together with its expertise in project management and property
management continues to attract and retain its premium rental clientele.
MARKET REVIEW
2022 HIGHLIGHTS
The commercial space market continued to witness an excess supply of premium commercial
space. Meanwhile enforced power cuts and the non-availability of fuel due to the energy Earnings
crisis in the country also impacted day-today operations and maintenance costs.
Rs Mn
1,400
DELIVERING RESULTS IN 2022 1,200
1,000
Rs Mn 2022 2021 % Change 800
600
Rental Income 955 910 4.9% 400
200
Investment Income 92 0
2018 2019 2020 2021 2022
PBT 774 648 19.5%
Fee Income PBT
PAT 510 464 9.9% PAT
ROE 6.0% 5.6%
Assets / Liabilities
Sithma’s rental income increased by almost BEYOND 2022 Rs Mn
YJKNGRTQƂVUKPETGCUGFD[FWTKPI 12,000
With businesses seeking to downsize post
the year. The improved performance was 10,000
COVID-19 and explore hybrid arrangements
supported by a normalisation of occupancy 8,000
such as remote working, the commercial 6,000
levels due to the gradual easing of real estate market is expected to continue 4,000
COVID-19 restrictions and an increase in to experience lower demand and rental 2,000
rental rates during the year. Sithma’s ability RTGUUWTGKP0QYOQTGVJCPGXGT 0
to increase rental rates despite excess tenant experience in terms of technology- 2018 2019 2020 2021 2022
supply of commercial space in the market enabled facilities and safe and secure Assets Liabilities
is a true testament of the property’s value spaces will be key factors for tenants seeking
proposition. During the year we commenced RTGOKWOQHƂEGURCEGU9GYKNNVJGTGHQTG
the refurbishment of the building’s electrical continue to explore new technologies that > 100% Occupancy
panels as part of our ongoing maintenance support smart solutions in order to create
efforts. HWVWTGTGCF[QHƂEGURCEGUKPVJGOQUVEQUV
effective manner.

INVESTMENT BANKING
Acuity Partners and its subsidiaries delivered a

2022 HIGHLIGHTS
resilient performance contributing Rs 332 Mn to
ÌiÀÕ«½Ã* /ìÃ«ÌiÌiÛ>ÌÌÞw>V> Earnings
markets in the country. Moreover, they maintain Rs Mn %
2,500 20
market leadership in their highly specialised 2,000 16
wi`ÃviÝ«iÀÌÃiÃÕ««ÀÌ}>}iÀiÛiv 1,500 12
activity upon stabilisation of markets. 1,000 8
500 4
0 0
2018 2019 2020 2021 2022
ACUITY PARTNERS LTD LANKA VENTURES LTD Profit attributable for shareholders
Transaction advisory and wealth ROE %

Venture capital company
management services specialising in renewable power
Assets Under Management
79.8% Rs Mn
30,000
ACUITY SECURITIES LTD
25,000
100%
Primary dealer in Government 20,000
securities
15,000
10,000
5,000
ACUITY STOCKBROKERS LTD
0
100% 2018 2019 2020 2021 2022
Trading member of the Colombo
Stock Exchange
Strategic Differentiators
DELIVERING RESULTS IN 2022 > Market leadership
Rs Mn 2022 2021 % Change
> Skilled talent pool
> ÛiÀÃwV>Ì>VÀÃÃw>V>
2TQƂVHQTVJG[GCT 945 markets
Total Comprehensive Income 2,774 1,215
ROE 9.8% 10.4%
Performance of this cluster of companies drag on performance which was otherwise

was driven by Acuity Securities despite supported by fair weather patterns and
the steep increase in interest rates, due to optimal power generation. The asset
prudent investments. The surge in interest management business which was a joint
rates also gave rise to an increase in the venture with Guardian Fund Management
customer base. Transaction advisory and .VFYCUFKXGUVGFKP,CPWCT[
stockbroking operations were impacted
by the market volatility, dampening BEYOND 2022
activity during the year. Nevertheless,
the stockbroking arm was successful in The outlook for the sector is expected to
maintaining market share during the year. DGRQUKVKXGCUKPVGTGUVTCVGUCPFƂPCPEKCN
Lanka Ventures’ continued to focus on the OCTMGVUCTGGZRGEVGFVQUVCDKNKUGKP
renewable power sector in Sri Lanka and supporting a higher level of activity by
Bangladesh remains a relevant strategy as market participants. The higher rate
energy remains a critical concern globally negotiated for future power projects by
with a growing urgency in the shift to a low Independent Power Producers is also a
carbon economy. With 71% of the portfolio welcome step in the right direction as we
invested in Bangladesh, devaluation of the continue to diversify our portfolio.
Bangladeshi Taka in 2022 proved to be a

FINANCIAL CAPITAL
Liabilities (Rs Bn)

1,000
800
600
400
BALANCING STRATEGIC PRIORITIES 200
HNB Group recalibrated its strategic

priorities to withstand potential systemic 0 100 200 300 400 500 600 700
shocks from the multiple crises that Assets (Rs Bn)
unfolded in 2022. Building resilience with
adequate liquidity and capital buffers was Corporate Retail SME & Micro Treasury Insurance
RTKQTKVKUGFQXGTITQYVJCPFRTQƂVCDKNKV[ NBFI Other subsidiaries
with related tradeoffs. Similarly, wellbeing
QHUVCHHCPFMGGRKPIDWUKPGUUGUCƃQCVYGTG
CNUQVTCFGQHHUYKVJUJQTVVGTORTQƂVCDKNKV[ This graph highlights the contribution made to Total Operating Income by each
DWUKPGUUUGIOGPVKPTGNCVKQPVQVJGHWPFUOQDKNKUGFVQƂPCPEGVJGCEVKXKVKGUQHVJG
to secure the long term sustainability of Group (liabilities) and allocation of funds among them.
the Group. The impacts of these and other
tradeoffs needed close monitoring and
Impairment Charges for Loans and Other Losses
recalibration as the year progressed as they
Rs Bn
impacted the bottom line. The leadership of
the Bank was also vigilant about cushioning
2022
these impacts by seizing opportunities that
come with every crisis. The Financial Capital
Review seeks to provide insights into how 2021
VJGƂPCPEKCNTGUQWTEGUYGTGOCPCIGFYJKNG
balancing key priorities. 0 20 40 60 80 100
Corporate Retail SME & Micro Treasury Insurance NBFI
Shareholder’s Funds
Rs 190.1 Bn
Customer Deposits
3.7% ½
Rs 1,443.2 Bn
30.4% ½
Loans & Advances
BUILT FOR Rs 1,107.5 Bn
RESILIENCE
14.3% ½
Total Assets
Rs 1,798.3 Bn
Total Liabilities
23.7% ½
Rs 1,608.2 Bn
26.6% ½
CAPITAL REPORTS
FINANCIAL CAPITAL
NET INTEREST INCOME
Rs Bn % The increase in policy rates by 950bps during the year

120 9
8 resulted in the average weighted prime lending rate
100 (AWPLR) increasing by over 14 percentage points on
7
80 6 average compared to the previous year. This enabled
5 to boost the NII by 98%. Rising interest rates were
60
4 a double-edged sword, increasing NII but slowing
down credit growth and increasing vulnerabilities
Rs 111.6Bn
40 3
2 of borrowers with high levels of debt, particularly
20
1 those whose safety margins were eroded with the
0 0 terror attacks in 2019 followed by two years of the Ç 97.6%
2018 2019 2020 2021 2022
pandemic.
Bank Bank NIM %
Subsidiaries Group NIM %
NON INTEREST INCOME
Net fee and commission income was boosted by higher

Rs Bn
60 card volumes and trade income which resulted in the
net fee and commission income increasing by 54% to
50
Rs 15.9Bn for the year. Position revaluations as a result
40 QHVJGUKIPKƂECPVTWRGGFGXCNWCVKQPGPCDNGFVQTGEQTF
30 CUKIPKƂECPVITQYVJKPGZEJCPIGKPEQOG*QYGXGT
20 the exchange impact on impairment provisions on
account of foreign currency denominated loans and
Rs 49.3 Bn
10
0
KPXGUVOGPVUCOQWPVKPI4U$PYCUUGVQHHCICKPUVVJG
exchange gains made. Nevertheless the net exchange
Ç 76.5%
2018 2019 2020 2021 2022
gain amounted to approximately Rs 20Bn recording an
Bank Insurance premium increase of over 200% compared to 2021. In addition,
Subsidiaries Bank net fee income HNB Assurance PLC recorded a 22% growth in Gross
Written Premium despite the challenging market
conditions. Accordingly, fee income, exchange income
as well as insurance premium contributed towards the
growth in Non-Interest Income.
TOTAL OPERATING INCOME
Rs Bn As detailed above both NII and Non-Interest Income

200 contributed to the 91% growth in Total Operating
Income. The Bank accounted for 86% of the Total
Operating Income of the Group. Treasury and Retail
150
Banking were the largest contributors accounting for
Rs 160.9 Bn
CPFTGURGEVKXGN[QH6QVCN1RGTCVKPI+PEQOG
100
Ç 90.6%
50
0
2018 2019 2020 2021 2022
Group NII Group non interest income

IMPAIRMENT
Rs Bn The Bank adopted a prudent approach to provisioning

100 due to the high levels of uncertainty prevailing at the
VKOGQHRTGRCTKPIVJGƂPCPEKCNUVCVGOGPVU#UCVGPF
80
QHVJG[GCT$CPMKPETGCUGFKVURTQXKUKQPUVQQP
account of investments in International Sovereign
60
Bonds. As such, total impairment on account of FCY
bonds increased to Rs 59Bn for the year compared to
Rs 91.7 Bn
40
Rs 6.8Bn in the previous year, accounting for nearly 65%
of the total impairment. Credit related impairment also
Ç 369.6% 20
KPETGCUGFVQ4U$PEQORCTGFVQ4U$PKP
0 as the Bank made higher provisions considering the
2018 2019 2020 2021 2022 economic factors and elevated risk.
Impairment on loans
Other impairment
OPERATING EXPENSES
Rs Bn %
60 60 +PƃCVKQPCT[RTGUUWTGUTWRGGFGXCNWCVKQPCPFHWGNRTKEG
increases resulted in total operating expenses increasing by
50 50
KP6JGKPETGCUGQHKPRGTUQPPGNGZRGPUGUKU
40 40 KPENWUKXGQHC4U$PTGXGTUCNOCFGKPQPCEEQWPVQH
pension fund provision as the retirement age was extended
30 30 to 60 years. Excluding this impact, the increase in personnel
Rs 49.8 Bn 20 20 costs was 16% as the Bank provided additional relief to
staff in executive grade and below in addition to the annual
Ç 33.3% 10 10 increments. Adjusted for this impact operating expenses
0 0 KPETGCUGFD[KPVJGDCEMFTQRQHKPƃCVKQPRGCMKPICV
2018 2019 2020 2021 2022 during the year.
Personel cost
6JG%QUVVQKPEQOGTCVKQHQTVJG)TQWRKORTQXGFHTQO
Benefits, claims & underwriting
VQCPFHTQOVQHQTVJG$CPMNCTIGN[FWGVQVJG
Other operating expenses
Bank cost to income %
relatively higher growth in total operating income.
Group cost to income %
PROFITABILITY
Rs Bn %
40 60 6JGUJCTGQHRTQƂVUHTQOLQKPVXGPVWTGUKPETGCUGFD[VQ4U
PBT 35
50
/PCUVJGRTKOCT[FGCNGTUJKRCPFVJGXGPVWTGECRKVCNCTO
Rs 14.4 Bn
30 EQPVTKDWVGFUKIPKƂECPVN[*KIJKORCKTOGPVEJCTIGUQHHUGVVJGICKPU
25 40 HTQOJKIJGT0++CPF(GG%QOOKUUKQP+PEQOGTGEQTFKPIC
È 37.4% 20 FGENKPGKP2TQƂV$GHQTGVCZQH4U$P8#6QPƂPCPEKCNUGTXKEGU
30
PAT 15 increased due to higher tax rates and the introduction of a Social
Rs 15.7Bn
10 20 Security Contribution of 2.5%. Although tax rates increased, Group
5 Income tax charge was negative due to a reversal of excess tax
10
È 21.6% 0 provisions on settlement of previous year’s tax settlements and
-5 0 CPKPETGCUGKPFGHGTTGFVCZTGEQIPKUGF&GURKVGVJKU2TQƂVCHVGT
2018 2019 2020 2021 2022 6CZFGENKPGFD[CV)TQWRNGXGNVQ4U$PYJKNG2TQƂV
Corp tax PAT #VVTKDWVCDNGVQ5JCTGJQNFGTUFTQRRGFD[VQ4U$P'CTPKPIU
VAT & SSCL Total tax rate % RGT5JCTGFGETGCUGFHTQO4UKPVQ4UKP

CAPITAL REPORTS
FINANCIAL CAPITAL
A SOUND FINANCIAL POSITION

This was the primary goal in 2022 as exposures and funding needed to
be managed to maintain liquidity, capital adequacy and asset quality.
> )TQWRCUUGVUKPETGCUGFD[CUNKSWKFCUUGVUUCYCUKIPKƂECPVITQYVJYKVJKPXGUVOGPVUKP.-4
IQXGTPOGPVUGEWTKVKGUKPETGCUKPID[COKFUVNQYCRRGVKVGHQTETGFKVITQYVJ6JGKPXGUVOGPVUKP
government securities remained mainly in the shorter end with treasury bills accounting for approximately
QHVQVCNNQECNEWTTGPE[IQXGTPOGPVUGEWTKVKGU6JGTWRGGFGXCNWCVKQPCNUQEQPVTKDWVGFVQVJGKPETGCUG
Total Assets in assets in terms of loans and advances and investments.
Rs1,798.3Bn
> )TQYVJQHITQUUNQCPUCPFCFXCPEGUOQFGTCVGFVQENQUKPIVJG[GCTCV4U$P'ZENWFKPI
VJGKORCEVQHVJGTWRGGFGXCNWCVKQPVJGNQCPDQQMITQYVJYCUQPN[CUVJG$CPMCFQRVGFCECWVKQWU
Ç 23.7% approach during the second half of 2022. Loans and advances accounted for 56% of total assets in 2022
EQORCTGFVQKP6JGENCUUKƂECVKQPQHNQCPUKUIKXGPDGNQY
Stage 1 2 3
Gross 821.0 176.6 109.9
Accumulated Impairment 14.9 16.8
Net 806.1 159.8 48.6
5GGPQVGVQVJG(KPCPEKCN5VCVGOGPVUHQTHWTVJGTKPHQTOCVKQP
> &GURKVGVJGEJCNNGPIKPIGPXKTQPOGPVVJG5VCIG+++TCVKQTGOCKPGFCVEQORCTGFVQCUCVGPFQH
2021. The stage provision coverage was at 57% as at end of 2022.
Total liabilities increased by 26.6% to Rs 1,608.2 Bn, with deposits accounting for 90%
QHVQVCNNKCDKNKVKGUITQYKPID[VQ4U$PCUCVGPF*KIJKPVGTGUVTCVGU
UCYCUJKHVHTQO%#5#VQVGTOFGRQUKVUTGUWNVKPIKP%#5#TCVKQFGENKPKPIVQHQT
Total Liabilites the Group. The Loans to Deposits ratio strengthened further to 75.4% for the Bank
Rs1,608.2Bn
and 76.7% for the Group by over 10% percentage points demonstrating the focus on
maintaining liquidity and the cautious approach towards lending.
Ç 26.6%
Capital Ratios
6QVCN5JCTGJQNFGToUGSWKV[KPETGCUGFD[FWTKPI
the year to Rs190.1 Bn due to retained earnings. %
Stated capital increased during the year due to the 20
Total Equity UETKRFKXKFGPFKUUWGFKPCOQWPVKPIVQ4U
Rs190.1Bn
Mn. Bank Tier I Capital and total capital adequacy 15
ratios were at 11.06% and 14% respectively against the
Ç 3.7% TGIWNCVQT[TGSWKTGOGPVQHCPFTGURGEVKXGN[
In addition, CBSL has allowed to draw down a further
10
250bps from the above levels which would require to

maintain the ratios at 7% and 11%. It is noteworthy that 5
the Bank did not raise capital during the year.
0
2018 2019 2020 2021 2022
Bank core capital ratio %
Bank total capital ratio %
Group core capital ratio %
Group total capital ratio %

2022 Highlights
Group Total Assets
Rs Bn > Strong deposit growth across all
1,200 DWUKPGUUUGIOGPVUTGƃGEVKPIVJG
strength of the franchise as customers
1,000 moved deposits to the HNB Group
800 > NII increased sharply across almost all
600 DWUKPGUUXGTVKECNUTGƃGEVKPIVJGURKMGKP
interest rates
400
> Fee & Commission income was
200 boosted by improved credit card
0
volumes and trade income
2018 2019 2020 2021 2022
> +ORCKTOGPVUKPETGCUGFD[HTQO
Loans and advances Rs19.5 Bn in 2021 to Rs 91.7 Bn in
Other assets 2022 due to elevated credit risk and
prudent provision on exposure to
GOSL debt securities denominated
in foreign currencies as the Sri Lankan
Group Liabilities Government temporarily suspended
repayment of external debt in April
Rs Bn % 2022
1,800 45
1,600 40 > +PƃCVKQPCT[RTGUUWTGUCPFFGXCNWCVKQP
1,400 35
of the rupee gave rise to increases in
1,200 30
personnel costs and administration
costs
1,000 25
800 20 > Taxation rate increases applicable to
600 15 the HNB Group are as follows:
400 10
200 5 2022 2021
0 0
2018 2019 2020 2021 2022 8#6QPƂPCPEKCNUGTXKEGU 18% 15%
Deposits Other liabilities CASA (Bank) % Social Security 2.5% -
Contribution
Income Tax rate 24%
Total Equity
> Despite the increase in income tax
200
Rs Bn rates, the taxation charge is negative
180 due to deferred tax adjustments and
160 reversals arising from settlement of
140
120
prior year assessments.
100
80
60
40
20
0
2018 2019 2020 2021 2022
Stated capital
Statutory reserve fund
Other reserves
Retained earnings
Non-controlling interest

CAPITAL REPORTS
FINANCIAL CAPITAL
A SEGMENTAL REVIEW
Segmental NII Contribution Segmental Non Interest Income Contribution Segmental TOI Contribution
2022 2022 2022
3% 8% 2% 3%
4% 3% 19% 13% 7%
7%
INCOME STATEMENT
11% 2% 6% 12%
5% 14%
1%
17% 30%
27% 17%
34%
2021 42% 2021 1% 2021 23%
13%
33% 27%
41% 45% 10%
1% 35%
13%
2% 14% 4% 1% 1%
10%
1% 14% 1% 10%
10% 3%
Corporate Treasury Corporate Treasury Corporate Treasury
Retail Property development Retail Property development Retail Property development
SME Insurance SME Insurance SME Insurance
Micro NBFI Micro NBFI Micro NBFI
> Treasury has the largest portfolio of

Segmental Assets CUUGVUCOQWPVKPIVQQHVJG
2022 Group’s assets.
3% > Corporate Banking is the second largest
1% 2%
31% CEEQWPVKPIHQTQHCUUGVU
3% 3%
1% 31% Corporate Treasury
ASSETS
28% Retail Property development

33% 2021 SME Insurance
Micro NBFI
2%
16% 17%
1% 16%
13%
> Retail banking accounts for the highest

Segmental Liabilities proportion of liabilities due to its strong
2022 deposit mobilisation activities
3% 4%
1% 1%
17%
4% 3%
4%
LIABILITIES
1%
1% 14% Corporate Treasury
18% Retail Property development
16% 2021 SME Insurance
Micro NBFI
57%
56%

A SEGMENTAL REVIEW
RETURN ON EQUITY
Group PAT Average Equity

Rs Bn Rs Rs Bn Rs
25 40 200 350
35
20
30 150
300
15 25
20 100
10 15
250
10 50
5
5
0 0 0 200
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Group PAT Average equity
EPS Rs Net assets per share Rs
Risk Weighted Assets Return on Equity/ Return on Core Capital

Rs Bn %
1,200 The breakdown of ROE 20
GPCDNGUKFGPVKƂECVKQPQH
1,000
the reasons for its movement.
15
800 .QYGTRTQƂVUUVGOOKPIHTQO
increased impairments as well as
600 the growth in risk weighted assets 10
400 are key contributory factors

CUCHƂTOGFD[VJGCPCN[UKU 5
200 alongside
0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Risk weighted assets Return on equity
Return on core capital
Return on Risk Weighted Assets Core Capital Ratio

% %
3.0 16
14
2.5
12
2.0
10
1.5 8
6
1.0
4
0.5
2
0.0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Return on risk weighted assets Core capital ratio

CAPITAL REPORTS
AN INTERCONNECTED DIGITAL ECOSYSTEM
HNB Group has invested in its digital transformation consistently over the
«>ÃÌwÛiÞi>ÀÃÜÌÌi>Ã«À>ÌvLiV}Ìi iÃÌ}Ì> >°7i
believe that it is an important part of integrating Sri Lanka to a rapidly evolving
`}Ì>ÜÀ`]iÃÕÀ}Ì>ÌÜiÀi>ÃiÌiLiiwÌÃÃiÀÌ>>ÌiÀ°7i>Ûi
created digital ecosystems that meet and support the corporate, aspiring
entrepreneurs and individuals. We are aligning our people, activities and
physical infrastructure to realise our aspirations.
VALUE DRIVERS OUR DIGITAL CAPITAL VALUE CREATED
Core Systems
Self Service Machine
No of digital users
Digital Investment
Rs 682 Mn 787 >718k

Digital App
Increase in transactions through

Digital Assets
AppStore 4.4 digital banking app
Rs 9.4 Bn Google Play 4.6
105%
SOLO
AppStore 4.1
Google Play 4.1 SOLO transactions
+51EGTVKƂGF+6QRGTCVKQP Rs 2.4 Bn
IMPACT
Growth in Digital App transactions

No. of transactions
20,000,000
15,000,000
10,000,000
Withdrawals through SSMs Deposits through SSMs
5,000,000
92% 75%
0
2018 2019 2020 2021 2022

IT GOVERNANCE
Policy Framework
The Bank has set out a robust IT governance and policy framework which articulates the
Bank’s priorities, facilitates resource allocation and supports the overall internal control > Information Security Policy
framework of the Bank. Collectively, the Board has the requisite skills and competence
Sets out a framework for
to assess and constructively challenge matters related to technology in exercising
ENCUUKƂECVKQPCPFUCHGIWCTFKPIQH
oversight.
information assets of the Bank
The Board Digital Banking Committee provides oversight in the implementation of > Cyber Security Policy
the digital strategy of the Bank. In 2022, two separate Sub Committees overlooking Set out the Bank’s approach to cyber
the Retail Banking and Wholesale Banking businesses were setup to accelerate the UGEWTKV[CPFFGƂPGUGZRGEVGFWUGT
digital initiatives under these two key verticals. At a management level the IT Steering behaviours
Committee overlooks and drives the IT Strategy of the Bank.
> IT Recovery Policy
Set clear plans for disaster recovery
in line with the Bank’s overall BCP
Strategy and > IT Service Management Policy
THE BOARD Solutioning
Implementing service
Digital Technology UVCPFCTFKUCVKQPYKVJ5.#UFGƂPGF
for service delivery
Digital Banking Enterprise System
Committee
Chief Information System Security
1HƂEGT
Chief Executive
Data Center
1HƂEGT
IT Steering Payment Channels
Committee
IT Administration
Networks and
Branch Support

CAPITAL REPORTS
AN INTERCONNECTED DIGITAL ECOSYSTEM
IT VISION AND STRATEGY

With the vision of being the best in digital, HNB focusses
QPHWVWTGRTQQƂPIKVUFKIKVCNGEQU[UVGO#EEQTFKPIN[
optimising the Bank’s digital infrastructure, forging new Run Change
partnerships and sharpening the capability of our people
underpins the Bank’s IT strategy. The strategy has been
designed taking into account, industry trends, customer
Business Value
Improvements
Infrastructure
Compliance
Technology
expectations and demographics. In line with our digital
Security
Process
Audit
strategy outlined in our 2021 report, we focused on
factors that we need to drive to run the business and
those that are needed to change the business. The key
areas under this framework are graphically summarised.
People Development
EXPANDING OUR DIGITAL PLATFORMS The app also facilitates peer-to-peer fund The digital banking app saw many new
Having launched two apps which are rated transfers and transfers to any mobile phone features being added and the Bank
the highest among peers, we continued which enables even a non HNB customer to migrated its internet banking platform
to enhance the capabilities of our digital withdraw funds from any ATMs across the to the digital layer providing the same
banking app and SOLO app during the year. country. The Solo Wallet now has the full enhanced user experience as the high
Adding the SOLO max wallet feature and range of QR, in-app and direct to merchant rated digital app. The Bank will continue
EQPXGTVKPI51.1KPVQCHWNN[ƃGFIGFFKIKVCN payment options in addition to the digital to focus on adding new features which will
wallet was one of the key milestones in 2022. wallet capability. enable customers to carryout their banking
transactions more conveniently.
> )COKƂECVKQP
SOLO ROAD MAP
> MASTERPASS/ MVISA
> AUM
Continuous feature on
boarding of value additions…
> Wallet
> Loyalty 2022 2023
> Split Pay
> Deals & Filter Tags > 2WUJ0QVKƂECVKQPU

> Coupons App update
0QVKƂECVKQPU > TechCert Reviews > Direct Pay
> Delivery Pay &
> POS Printing
2020 2021 > CBA POS API > Regression Model
Digital On boarding
> Merchant reports > LankaQR > 0QVKƂECVKQPGPIKPG > Merchant IOS
> Billers > $KQOGVTKE+FGPVKƂGTU > Referral Module > API & SDK
SOLO 2.0 Launch

2019 > Customer App
> Merchant App
> Admin portal

+PYGYKNNUGGCPGYRC[OGPVCPFECUJOCPCIGOGPVU[UVGOIQKPINKXGRTQXKFKPIC
far superior service to our corporate customers. The second phase of the project which has Our Digital Suite
a trade platform will commence once phase I is completed. We have also embarked on
For customers
WRITCFKPIQWTECTFUU[UVGOYJKEJKUQPGQHVJGOCKPKVGOUQPVJG+6CIGPFCHQTCPF
(WTVJGTOQTG*0$KUKPVJGƂPCNUVCIGUQHKORNGOGPVKPIC%WUVQOGTRNCVHQTOYJKEJ > Digital Banking App
is integrated to the core banking system to provide a comprehensive view of the customer. > Internet Banking
This will enable cross selling and up selling opportunities in addition to providing superior > Digital wallet
customer service.
Support to businesses
Ensuring the security and privacy of customer information is a priority in an environment
where cyber risk has emerged as one of the highest risks globally and as we rapidly expand > Payment platforms – IPG, SOLO,
our digital and online services. Latest security protocols such as multi-level authentication, MoMo
one-time passwords (OTP) SMS system, biometric authentication are in place to ensure > Connecting markets through
complete security across every transaction. In addition to the data loss prevention system in #RRKIQ9GDGZ2C[%QTF
place we implemented a digital rights management system during the year to improve data > ERP solutions
security. There were no incidents of customer privacy or security breaches during the year.
For Employees
WAY FORWARD > E-learning platform – TalentSpace
As we continue our journey of being future ready, we will continuously focus on enhancing the > Human resource management
capacity and capability of digital system. While we will focus on ensuring stability and security system – TalentEdge
of our systems on one side, we will develop solutions to meet the changing requirements > Online portal on products and
of our customers. We will look at partnerships which can strengthen our proposition to our services - Knowledge Hub
customers and continue to leverage on data and analytics for better insights.
> Training through virtual channels
> Connecting through HatnaNet –
the intranet
> Robotic Process Automation taking
over mundane work

CAPITAL REPORTS
HUMAN CAPITAL
Our Human Capital Strategy is aimed at fostering a “Happy

½ À}Ì»]vÕÌÕÀiwÌÜÀvÀViÌ>Ì`ÀÛiÃ«À`ÕVÌÛÌÞ>`
ivwViVÞ>VÕÌÕÀiÌ>ÌÃVÕÀÕÃ]ÛiÌÛi>`Ã«ÀÌi`°
We continued this Human Capital (HC) journey in 2022,
>ViÛ}Ã}wV>Ì«À}ÀiÃÃÕÀ
Ì>ÌÛiÃ
VALUE DRIVERS WORKFORCE PROFILE VALUE CREATED
BY DESIGNATION
75 Senior Management & above 15
Training Investment 647 Executive 219 Learning hours per employee
Junior Executive
Rs 48.7 Mn 24.4

1,529 Non-Executive 1,654
BY CONTRACT
2679 Permanent 2,010
209 Temporary 258
Mobility Opportunities BY PROVINCE Payments to employees
904 1,710

Western
Central
1,629
179 Rs 15 Bn
Eastern 56
68 North Central 21
167 Northern 98
162 North Western 85
95 Sabaragamuwa 48
180 Southern 117
72 Uva
BY AGE
$GNQY 995
1,790 VQ
Over 50
IMPACT
Province wise Employees Workforce by Gender Pay Gap Analysis (Rs 000)
Employees
1,800
1,600 Bank Associates
56%
1,400
1,200 Junior Executives
1,000
800
600 Executives
400
200 >>}iiÌ
0
44%
Western
Central
Eastern
North Central
Northern
North Western
Sabaragamuwa
Southern
Uva
-iÀ>>}iiÌ
100 200 300 400 500 600 700 800 900
Male Male Female Ɓ>iƁ Ɓi>iƁ

Female

HC GOVERNANCE
A comprehensive Human Capital policy framework,
supported by robust processes and procedures govern Remuneration Nomination
CEO
Committee Committee
HNB’s human capital practices ensuring a dynamic work
environment for all our employees. HC strategies are
designed at the highest level ensuring alignment to
the overall objectives of the Bank. The Human Capital
Department (HCD) is responsible for the Human Capital HUMAN CAPITAL DEPARTMENT
function of the Bank. The structure consists of the Centre
of Expertise that designs human capital solutions, the
Operations vertical which manages the human capital
services, and Human Capital Business Partners that Human
provide the high touch experiential element of human Centre of Capital
Operations
Expertise Business
capital management and development. Partners
TALENT ACQUISITION AND taken an agile approach to manage the

TURNOVER IN 2022 situation by forming an agile workforce.
The Bank was not immune to rising trend Notwithstanding this challenge, proactive HNB Human Capital Policies
of migration in the country and witnessed GHHQTVUVQQHHGTGORNQ[GGUHWNƂNNKPITQNGU
that match their individual talents and > Anti-Bribery & Corruption Policy
a higher level of labour turnover compared
to previous years. The rate of attrition continuously enhancing our employee > Anti-Harassment Policy
for the year 2022 was 9.5% (Male 5.0% value proposition in response to evolving > Disciplinary Guideline Policy
and Female 4.5 %). Whilst over half of needs enabled to successfully meet our
> Employee Recognition & Rewards
attrition was attributed to migration, we workforce requirements continuously. The
Policy
are optimistic that this phenomenon is of revamped Mobility and Acquisition policies
too encouraged talent mobility across the > Employee Share Trading Policy
CVGORQTCT[PCVWTGCPFYGCTGEQPƂFGPV
that the best and most resilient of our staff organisation and supported the Bank’s > Equality and Diversity Policy
continue to remain in the Bank. We have Strategic Workforce Planning efforts. > Grievance Policy
> Health & Safety Policy
Talent Acquisition and Turnover
> Human Rights Policy
New Exits > Industrial Relations Policy
Recruits
No. No. > Foreign Training Policy
> Promotion Policy (Executive & Non-
By Gender Male 258
Executive)
Female
> Remuneration Policy
By Age 7PFGT 654
28 166 > Social Media Policy
Over 50 1 > Succession Planning Policy
By Grade Senior Management - 1 > Talent Acquisition Policy
Middle Management 17 44 > Talent Development Policy
Junior Management 1 47 > Talent Mobility Policy
Clerical & Other 665 > Whistle Blowing Policy
By Provinces Western 417 > Work-Life Balance Policy
Central 69 45
Eastern 16
North Central 27 6
Northern 29 12
North Western 26 17
Sabaragamuwa 24
Southern 15
Uva 25 5

CAPITAL REPORTS
HUMAN CAPITAL
DIVERSITY AND INCLUSION

Diversity and Inclusion are essential components of HNB’s Human Capital Strategy. We therefore strive to ensure that our policies and
RTQEGUUGUEWNVKXCVGCFKXGTUGGSWKVCDNGCPFKPENWUKXGYQTMRNCEGHQTCNN9GEQPVKPWGVQOCMGUKIPKƂECPVUVTKFGUVQYCTFUQWTIGPFGT
parity goals and are proud to note that we were recognised as offering one of the nation’s best working cultures for women at the
second edition of the Women Friendly Workplace Awards 2022 (WFWA). This is a true testament of the progress we have achieved in
reaching our gender parity goals.
ENABLERS
POLICIES > Recruitment Policy PRACTICES > Flexi hours and work from home arrangements
> Mobility Policy > Women and men working in the same pay-
> Equality and Diversity Policy grades are evenly remunerated
> Prevention of Harassment Policy > Merit based promotions
> Human Rights Policy

> Grievance Policy
KEY INITIATIVES
Our branded female empowerment initiative “Woman at Work” continues to provide female
employees with career development opportunities, training opportunities and invaluable support
throughout their career at HNB
IMPACT
2888 Total Employees 2268

Management 75 100% 100% Zero
New Recruits of women returned to of women who returned to work Reported incidents
work after parental leave after parental leave and were of gender based
445 Promotions still employed 12 months after discrimination
258 Exits returning to work

1 3 DIVERSE, EQUITABLE & INCLUSIVE
We continuously Ongoing WORKPLACE PROGRAMME
Data driven
review and update engagement with
We ensure that our decision making is
our HC policies employees ensures The rollout of the Diverse, Equitable
HC strategies are facilitated through
and processes that all employees & Inclusive Workplace for “Happy n
closely aligned with a Human Capital
in response to are up to date on
overall goals of the MIS Dashboard Bright” at HNB will be spearheaded by
evolving dynamics HC processes and
Bank which tracks key 60 members of the HNB Top 100 who
practices
HC indices are participants of the Bank’s “Acumen”
2 4 Development Programme. The project
is sponsored by the Chairman of the
Bank and is overseen by the Chief
PERFORMANCE MANAGEMENT *WOCP4GUQWTEG1HƂEGT
%*416JG
Executives are appraised bi-annually based on KPIs that have been communicated at the following areas are considered as part
beginning of the year. All other employees are evaluated on an annual basis. 100% of of the scope of this project
employees received performance evaluation reviews during the year. > Family friendly workplace
> Ergonomics in the workplace
4GOWPGTCVKQPCPF$GPGƂVU > Disability access and other facilities
The Bank is able to attract and retain some of the best talent in the country by ensuring
> Communication methods,
transparent, unbiased and consistent remuneration and reward schemes that are on par
language and tone
YKVJKPFWUVT[UVCPFCTFU+PCFFKVKQPVQCIWCTCPVGGFƂZGFRC[EQORQPGPVCNNRGTOCPGPV
employees are entitled to a variable pay component that is linked to performance of the > Learning / awareness solutions
individual and the Bank. In addition to remuneration, permanent employees are offered > Management information availability
CYKFGTCPIGQHDGPGƂVUKPENWFKPINKHGKPUWTCPEGOGFKECNCNNQYCPEGUFKUCDKNKV[CPF > Technology and system support
KPXCNKFKV[EQXGTCIGOCVGTPKV[NGCXGRGPUKQPDGPGƂVUJQNKFC[CNNQYCPEGUTGKODWTUGOGPV
of professional subscriptions and stock options among others. As an equal opportunity
employer, HNB practices a strict policy of zero-gender base discrimination when determining
remuneration.
Talent Development
As a talent-led organisation, we are committed in providing our employees opportunities for
continuous learning and development and continue to explore innovative ways and means
to learn and grow professionally in their careers. While we gradually recommenced on-site
physical training programmes, we are increasingly leveraging digitally smart mediums to
provide blended learning opportunities in an agile and engaging manner.
Training provided is need based and designed taking into consideration organisational needs
CPFKPFKXKFWCNPGGFU+FGPVKƂECVKQPQHNGCTPKPIPGGFUCPFFGXGNQROGPVQHRTQITCOOGUKUCP
ongoing consultative process where the individual employee, line managers and HCD work
collaboratively to identify and develop programme that best suit competency requirements
and organisational needs.

CAPITAL REPORTS
HUMAN CAPITAL
In spite of the pandemic and economic moratoriums as per Central Bank guidelines gamify learning, enhance knowledge and
constraints faced during the year, 28,607 as well as learning modules aimed at cross-functional collaboration, increase
participants received opportunities to supporting front-line personnel navigate a digital adoption, and encourage the senior
learn, improve and grow, compared to a volatile, uncertain, complex and ambiguous leadership to create a progressive learning
RTGXKQWU[GCTCXGTCIGQH6JKU business environment. culture within the organisation. We believe
YCUNCTIGN[FWGVQVJGDGPGƂVUQHXKTVWCN in making learning enjoyable. When the
learning which facilitated greater reach and Leadership Development programmes were pandemic challenged the implementation of
coverage through every programme. 80% continued during the year with the ‘Catalyst’ traditional learning methods, we wanted to
of participants engaged in training virtually, programme focused on grooming for C suite innovate ways to continue learning and the
and more than 59% of the programmes, and ‘Acumen’ for the senior management HNB LPL was one of those. The response
usually delivered through classroom training, team. The Acumen programme was was overwhelming and the knowledge
were delivered virtually during 2022. delivered in 2 parts with 29 participants enhancement was clearly visible during the
for leadership succession and another 29 tournament. 46 teams, 506 players and over
The total number of programmes delivered participants from the regional leadership RCTVKEKRCPVUYGTGKPXQNXGFYJGTGYG
via classroom, virtual channels and coaching team being coached on business acumen. UCYVJGTQNGDCUGFEGTVKƂECVKQPEQORNGVKQP
interventions grew to 817, higher than the The ‘Impact’ programme is aimed at long OQXGWRUKIPKƂECPVN[(WTVJGTOQTGVJG
RTGXKQWU[GCTCXGTCIGQH+PCFFKVKQP term succession within expert teams. During senior management involvement as
to this, more than 50,000 engagements were 2022 programmes were held for the retail sponsors have also set the foundation to
recorded on the Bank’s e-Learning system banking and support services verticals creating the leadership inspired learning
n6CNGPV5RCEGoYKVJEQWTUGUCPFSWK\\GU following the success of the programme culture that we aim to create.
being active as at year end. The activity held for the wholesale banking group.
on Talent Space included (but not limited Anti-Bribery & Corruption
to) quizzes to compliment virtual learning We continued to encourage the ‘Role
Based Training’ focused on strengthening 9GƂTON[DGNKGXGVJCVDTKDGT[EQTTWRVKQP
sessions.
the knowledge of front-line staff. Basic are unethical, unacceptable and inconsistent
With the focus of consumers shifting towards NGXGNEGTVKƂECVKQPUYGTGEQORNGVGFD[QXGT with our Values and the Bank’s Code of
technology and digital solutions, talent 90% of the frontline and the intermediate Conduct. Our Anti Bribery policy provides
development initiatives during the year were EGTVKƂECVKQPUYQWNFDGTQNNGFQWVFWTKPI the guidance for employees and during the
aimed at equipping our employees with the year special campaigns were carried out to
skills and knowledge required to support reinforce the practices. HNB has partnered
customers in this transition. 7% of the The Bank’s “Committed to Serve” the Business Against Corruption (BAC)
learning solutions during the year focused campaign was supported by rigorous initiative, which is a collaboration between
on technology enablement while a greater training opportunities and monitored for the Sri Lanka Institute of Directors (SLID) and
part of the Business Growth related training closure for completion. Transparency International Sri Lanka (TISL) as
also focused on the delivery of our digital an anchor partner.
solutions, SOLO and eBanking solutions. The HNB Learning Premier League
Business Sustainability training focused on (HNB LPL)
strengthening governance, enhancing asset Modelled after the popular game of cricket,
quality and building a compliance culture. VJG*0$.2.KUCPKPFWUVT[ƂTUVNGCTPKPI
Business Sustainability training also included experience that connects with staff on a
training on implementing and managing virtual platform. The initiative aimed to

LEARNING AND DEVELOPMENT AT HNB
LEARNING SOLUTIONS
Classroom e-Learning Structured HNB Learning

Role Based “Committed to
and Virtual (Talent Space Leadership Premier League
Training Serve” Campaign
Training Platform) Training Programmes (HNB LPL)
817 55,853 online 125 employees Role based training Service excellence )COKƂGF
Programmes engagements participated in modules for related training learning
delivered through including courses Catalyst (grooming front line staff for opportunities
classroom training and quizzes for C Suite), Acumen EGTVKƂECVKQP
for C1 and ‘Impact’
for long term
succession Learning Hours by Employee Category
Learning Hours per Employee
%
Rs 48.7 Mn
40
35
Female Total Training Investment 30
25
20
Male 125,631 hours 15
Total Learning Hours 10
20 21 22 23 24 25 26 27 5
Hours 0
24.4 hours
Senior
Management
Management
Executive
Clerical
Other
Average Learning Hours

per Employee
TRAINING FOCUS
Business People Technology Business Improve CX

Sustainability Development Enablement Growth and Productivity
Programmes
225 399 40 43 80
No. of
Participants 10,722 7,158 1,686 3,207 5,834

CAPITAL REPORTS
HUMAN CAPITAL
HEALTH AND SAFETY External Programs among its staff. The programme ran over a
We are committed to provide a safe, > National Occupational, Safety & Health period of 6 weeks including auditions, the
secure and healthy work environment for Conference 2022 UGOKƂPCNCPFVJG)TCPF(KPCNGYCUJGNFKP
our employees and have in place a health early December 2022.
and safety policy that goes well beyond EMPLOYEE ENGAGEMENT INITIATIVES > “Saru Gewatta” – HNB Ambalantota
the minimum health and safety regulations
Open lines of communication and innovative branch established a model farm, which is
stipulated by law. Although the stringent
employee engagement initiatives ensure a great example of employee engagement.
health and safety measures put in place
that employees at all levels have multiple The project motivated and brought the
during the height of the pandemic were
channels of communication and easy staff closer together, while promoting
relaxed, with the lessening of the pandemic,
access to information. While strengthening home gardening and organic farming,
the Bank continued to have in place basic
engagement via virtual platforms we impacting the community positively.
health and safety protocols such as the mask
mandate and social distancing guidelines. also re-commenced many of our physical 6JGƂTUVJCTXGUVYCUFKUVTKDWVGFVQVJG
engagement activities during the year. community, with the project providing
Meanwhile we continued with our mental
the staff with satisfaction and motivation.
wellness programmes aimed at supporting
Multiple channels were also made available Such initiatives showcase the importance
employees through the pandemic.
for employees to raise the views and of employee engagement and community
All full-time employees are entitled to life grievances. At a ground level, the Human impact.
KPUWTCPEGCPFJGCNVJECTGDGPGƂVUUWEJCU Capital Business Partners continued to have
one-to-one conversations with staff and
reimbursement of surgical and hospitalisation LABOUR RELATIONS
expenses for self and family. We also support the implementation of personal
development plans. The CHRO also 72% of our staff are members of the Ceylon
continued to conduct periodic health and Bank Employees Union (CBEU) and the
wellness programmes to promote better continues to have one-to-one discussions
with staff on a regular basis. In addition *0$1HƂEGTUo7PKQPCUCVVJGGPFQH
health among our employees and 1,098 2022. We continue to engage closely with
participated in 2022. to this, the Chief Employee Experience
1HƂEGT
%''1EQPVKPWGUVQQRGTCVGCUCP trade union representatives and maintain
independent party taking up employee amicable relations with all unions. The notice
Employee Wellness Initiative conducted
grievances and discusses same with the period and provisions for consultation and
during the year.
Human Capital function, for resolution. In PGIQVKCVKQPCTGURGEKƂGFKPVJG%QNNGEVKXG
Internal Programmes addition to this, the Whistle-Blowing policy Agreements with respective trade unions.
> Cycling for Health for Females and process is also in place for staff to raise There were no incidents of industrial action
serious concerns directly to the designated during the year.
> Ensuring personal well-being during a
crisis Board Member/s.
WAY FORWARD
> Living with COVID 19 - Current Status & Other employee engagement initiatives
Managing Change With rising migration levels expected to
continued throughout the year with initiatives
continue to challenge Sri Lanka’s labour
> Program on First-Aid conducted at regional level. These included
market, enhancing employee value
> Staying Calm & Healthy the Sports Fiesta, Annual Carols and other
proposition in terms of remuneration, rewards
staff social events. Few new initiatives were;
> Staying Motivated in the New Normal and job satisfaction will be a key focus area
> Wellness for Performance > “WBG Voice” is a programme designed going forward. Meanwhile we will continue
to accentuate the talent of Wholesale on our human capital roadmap as envisaged
> Work-Life Balance & Mental Well-being
Banking Group (WBG) staff. The event was in “Project Everest” by driving inititaves to
a blend of interaction and competition create a tech-enabled future ready happy
and bright workforce.

SOCIAL AND RELATIONSHIP CAPITAL
The success of our value proposition can be measured by the

strength of our relationships with our customers, business partners
and community. During the year we continued to engage with these
stakeholders to understand their evolving needs, drive greater
synergies and make a meaningful impact in our communities.
VALUE DRIVERS OUR SOCIAL AND RELATIONSHIP CAPITAL VALUE CREATED
Customers
Committed to serve initiative extended to

the entire network and closely monitored 2.6 Mn Over 178k
in 100 branches customers acquired
Business Partners
Correspondent banks 769

Exchange houses 98
Greater engagement with Merchants 7,396 52
merchant additions
business partners. Suppliers 263
Communities
CSR Investment Rural communities Rs 1.1 Bn

Rs 29.1 Mn
in payments
to suppliers
IMPACT
CSR Spend by focus area
14%
32%
Health
Education
Net Promoter Score improved to Entrepreneurship
62% Environment
from 56% in 2021 33%
21%

CAPITAL REPORTS
VALUE TO CONSUMERS
During the year we continued to focus on driving our new brand ethos of “Making Banking Enjoyable” by striving to
deliver convenient, seamless and enjoyable banking solutions that meet the evolving needs of our diverse customer base.
MAKING BANKING ENJOYABLE
DEAL EASY COUNT ON US

7iVÌÕiÌ>iÕÀÌÕV«ÌÃivwViÌ]Ã«i We ensure that our customers can rely on us by being transparent
and agile to make our customers more comfortable. >`vÀ>ÌÛi]ÜÃÌÀi>ÃÃÕÀ}ÌiLiÃÌÃiÀÛVi°
Expanding our Smart Service Machines (SSM) network Product Responsibility

Our network of 787 on- site and off- site SSM’s enable Information on fees and charges, product features, terms and
customers to carry out a range of banking functions conditions are clearly communicated to clients through our branch
without needing to come to a branch or counter. Seven staff, through our contact center and through our corporate
new SSM’s were added to the network during the year. website. Meanwhile a clearly articulated customer charter is in
Meanwhile we continue to expand the range of services place to ensure responsible behaviour towards our customers at
offered through SSMs. all times. There were no reported instances privacy breaches or of
non- compliance concerning product and service information or
Improving Branch Layouts marketing communications during the year.
We are also in the process of redesigning our branches
to better align the branch layout with customer Customer Engagement
requirements. The new layout which includes a A 24x7, multilingual and Omni Channel Contact Centre is available
transaction zone and sales zone was rolled out to three for customers to reach us at any time. We continued to scale
key branches and will gradually be rolled out across the up our engagement capabilities with the implementation
network. The new layout is aimed at simplifying the
customer experience. 1 of Robotic Process Automation (RPA) to establish
automated chat services that provide real time
responses to client queries.
WE KNOW YOU BETTER

We are committed to making our customers 4 2
feel seen by proactively delighting them.
Digital Enablement
FEEL SPECIAL
As customers increasingly seek to transition 3 We strive to make our customers feel valued by
to digital mediums, we remain committed to
supporting this transition by offering our customers being personal and respecting their needs.
CUKORNGCPFGHƂEKGPVFKIKVCNXCNWGRTQRQUKVKQP9G
Superior Customer service
EQPVKPWGFVQTGƂPGQWTFKIKVCNDCPMKPICRRYKVJCFFGF
capabilities and enhanced useability. The most recent addition was a A dedicated Customer Experience Unit continues
HGCVWTGHQTQRGPKPICPFENQUKPIQHƂZGFFGRQUKVUVJTQWIJVJGCRR5GXGTCN to drive service excellence programmes across
new features were also added to our digital payment app SOLO during the Bank. “The Committed to Serve Initiative”
the year including Peer-to-Peer (P2P) transfers, wallet features, and card- led by the Customer Experience Unit is a holistic
less ATM withdrawals. Award winning digital products such as IoT enabled approach to identifying customer pain points and
HNB FIT meanwhile continue to attract a new generation of digitally savvy driving meaningful change to achieve superior
customers. (For more information on our digital initiatives please refer customer service. The inititave involves training,
page 52). mindset change and process improvements that
JCXGTGUWNVGFKPUKIPKƂECPVXCNWGCFFKVKQPUVQ
New Products customers.
&CVCCPCN[VKEUCPFCTVKƂEKCNKPVGNNKIGPEG
#+EQPVKPWGVQRTQXKFGFGGRGT
insights into our customers’ needs, wants and aspirations which in turn
GPCDNGWUVQQHHGTOQTGOGCPKPIHWNƂPCPEKCNUQNWVKQPU&WTKPIVJG[GCT
we introduced three new products including a Premier Current Account,
Investment Plans for adults and children and a Teen + savings account
YKVJVJGNKPMGFFGDKVECTF6JGUGVCKNQTOCFGRTQFWEVUOGGVVJGURGEKƂE
requirments of our diverse customer base.

VALUE TO BUSINESS PARTNERS
PAYMENT GATEWAYS AND E-COMMERCE
Our network of business partners consisting of Correspondent Banks, PLATFORMS ACCESSIBLE TO OUR MERCHANTS
Exchange Houses, merchants and suppliers continue to grow as we
expand our operation locally and globally. We continue to develop Sector No. of Credit Facilities
these relationships deriving mutual value in terms of operational
synergies, market access and new business opportunities. HNB SOLO Helps merchants shift to contactless and
cashless payment solutions
Stronger partnerships with Exchange Houses HNB Payfast Secure internet based payment gateway
HNB has relationships with 98 exchange houses in over 40 countries. HNB MOMO A low cost mobile card payment gateway for
During the year we commenced operations with four new exchange merchants
houses in Israel, Spain, UAE and United Kingdom and deployed HNB
4GRTGUGPVCVKXG1HƂEGTUVQFGUVKPCVKQPUUWEJCU.QPFQPCPF/CNG CyberSource Helps merchants worldwide to grow their
HQTVJGƂTUVVKOGVQDQQUVTGOKVVCPEGTGNCVGFDWUKPGUUQRRQTVWPKVKGU sales, protect their brands and operate with
The strong relationships we have formed with overseas counterparts greater agility.
proved invaluable in our remittance mobilisation efforts during the OnePay Helps merchants grow their businesses by
year. developing an online sales channel.
Daraz Enables merchants on network establish an
Foray into Agency Banking online presence.
The Bank marked its entry into the Agency Banking space with the
launch of HNB Ithuru Ithuru, a Agency banking partnership with SLT
Mobitel which enables HNB customers to make deposits to HNB
General and Minor Savings Accounts through Mobitel mCash agents.
Strategic Tie-ups
We continue to enter into partnerships that generate new business
opportunities and widen our reach. During the year PFS entered
into partnerships with 12 real estate developers while HNB leasing
entered into partnerships with 14 vehicle traders.
Merchant Network
We are committed to adding value to our ever-expanding merchant
network. In addition to enabling digital payments through reputed
digital payment gateways we continue to invest in introducing
new technology to merchants. Services provided include Dynamic
Currency Conversion on foreign cards, processing, in-app payments
through tokenization, and mobile POS payments through HNB
MOMO.
Sustainable Supplier Relationships

Our supplier base consisting of utility service suppliers, material
suppliers, transport providers and maintenance service providers
play an integral role in carrying out a seamless operation. During the
year total payments to suppliers amounted to Rs 1.1 Bn.
Our relationships with our suppliers are partnerships we invest in by

ensuring transparent and sustainable procurement practices, regular
engagement, and capacity building initiatives. We ensure strict
adherence to procurement guidelines as per our Board Approved
Procurement Policy and continuously monitor performance of
suppliers to ensure compliance to service standards. All new
suppliers are screened using environmental and social considerations
including nonuse of child labour and/ or forced labour.

CAPITAL REPORTS
VALUE TO COMMUNITY
We are committed to supporting the Government in its efforts to transition towards a green, inclusive and balanced economy and continue
to focus our lending and CSR efforts towards driving sustainable growth from the grassroots. Our efforts to support a more inclusive and
balanced economy is discussed in the following section while our efforts to create a greener economy are discussed fully in our natural capital
section on page 74.
DRIVING FINANCIAL INCLUSIVITY TO REDUCE INEQUALITIES
As an active ‘Participating Credit Institution’ for almost all credit lines funded by the Asian Development Bank, World Bank, International
Fund for Agricultural Development, as well as concessionary credit lines introduced by the Government of Sri Lanka, HNB has acted as a
catalyst of change for Sri Lanka’s rural communities and underbanked segments.
We drive growth in the SME sector by offering SME’s a Over 28,000 micro entrepreneurs have been
QPGUVQRUQNWVKQPVJCVKPENWFGUƂPCPEKCNCPFVGEJPKECN UWRRQTVGFVJTQWIJ*0$oUOKETQƂPCPEKPI
support. A key focus in recent years has been to support programme “Gami Pubuduwa”. In addition to
the digital enablement of our SME clients. HNB’s value ƂPCPEKCNUWRRQTVOKETQGPVGTRTKUGUCTGQHHGTGF
EJCKPƂPCPEKPIFTKXGVQQJCUDTQWIJVUKIPKƂECPV technical support including capacity building as well
DGPGƂVUVQ5/'oUCPF/KETQGPVGTRTKUGTUD[ as market linkages through initiatives such as
RTQXKFKPIITGCVGTCEEGUUVQƂPCPEGCPF the HNB Avurudu pola and podi podi business
markets. Fueling initiatives.
Supporting
SME Micro
(for more information on support to Growth (for more information on support
Entrepreneurs
the sector refer our SME to the sector refer our micro
sector review of page 38 ) w>ViÃiVÌÀÀiÛiÜv«>}iÎ®
Encouraging and
supporting women
entrepreneurs.
9JKNGQHHGTKPICTCPIGQHYQOGPURGEKƂERTQFWEVUVQGPEQWTCIG
ƂPCPEKCNKPFGRGPFGPEGQHYQOGPYGCNUQEQPVKPWGVQGPEQWTCIG
and support more women to become entrepreneurs.

STRATEGIC CSR
The Bank’s corporate citizenship agenda is driven by
HNB’s Sustainability Foundation, which was established in 2009.
Key projects carried out during the year are described below.
HNB >èJĐÛGJĐÛA/áE
/áE Oba Venuwen Api’ Hospital Donations
Much needed medical equipment was provided to six hospitals across the country during the
The Oba Venuwen Api Fund was established [GCT(TQOVQJQURKVCNUTGEGKXGFOGFKECNGSWKROGPVCPFUWRRNKGUCURCTVQHVJG
in 2020 to help Sri Lankans who were hospital donations project.
HCEKPIOCP[FKHƂEWNVKGUDTQWIJVQPD[VJG
pandemic. Over the year, the fund and its
goals have evolved to work with different
segments of the public and offer support
where possible
‘Oba Venuwen Api’ Micro Finance Grant

Following the Rs 20 Mn allocated in 2021,
the Bank allocated a further Rs 10 Mn to
assist entrepreneurs affected by the ongoing
GEQPQOKEETKUKUCUCRCTVQHKVUƃCIUJKRn1DC
Venuwen Api’ initiative to rebuild and revive
the economy. ‘Oba Venuwen Api’ Nutrition Drive for expectant mothers
6JG$CPMYQTMGFYKVJ/1*QHƂEGU&KXKUKQPCN5GETGVCTKCVUCPFOKFYKXGUVQEJQQUG
GZRGEVCPVOQVJGTUYJQYKNNDGDGPGƂEKCTKGUQHVJGPWVTKVKQPRCEMHQTVJTGGEQPUGEWVKXG
months
30
03
11
06 04
04
04
01
15 02
10 02
06
19 01 14
04
02
06
03
09 09
06 10
10
Hospital Support 2020 - 2022 Micro Finance Grant 2021 - 2022 Nutrition Drive for

*QURKVCNU/1*1HƂEGU expectant mothers for 2022

CAPITAL REPORTS
Ride for Apeksha “Donate a book for Change” CSR campaign

Ride for Apeksha is a fundraising campaign HNB partnered with M. D. Gunasena to launch the “Donate a Book for Change” CSR
to raise funds for urgent medical supplies campaign. New and used books were collected from customers and staff members and
to support cancer patients at the Apeksha donated to libraries of rural schools in partnership with M. D. Gunasena.
Cancer Hospital in Sri Lanka. Employees of
the Bank took part in “Ride for Apeksha” and
donated milk packets to the hospital.
‘Season of Giving’ donation campaign Infrastructure facilities for Financial support for
The ‘Season of Giving’ donation campaign underserved communities cancer patients and families
was launched in collaboration with Caritas The Bank partnered with Capital Maharaja An ongoing project by HNB’s Sustainability
Sri Lanka with the aim of raising funds for Group and Gammedda, Sri Lanka's largest Foundation, The HNB Sustainability
disadvantaged families that do not have rural development movement, to enhance (QWPFCVKQPJCURTQXKFGFƂPCPEKCN
access to proper meals, sanitation, or shelter infrastructure in Yaaya 6 Mahawilachchiya. The assistance to over 15,000 cancer
in Sri Lanka. All donations made via HNB initial phase of the project concentrated on the RCVKGPVUCPFVJGKTHCOKNKGUKFGPVKƂGF
SOLO were directly sent to the Caritas Sri installation of an RO plant to offer safe drinking by the Apeksha Hospital Maharagama
Lanka accounts, with the bank making an water to the community of 650 families. The Counselling Center. The annual
additional donation for every transaction second phase included constructing sanitary maintenance cost of the counselling centre
facilities and a digital lab at Saliyamala Maha
made by users. is also funded through HNB’s Sustainability
vidyalaya Pemaduwa. The third phase, which
Foundation.
involves renovating a 2km roadway from
Mannaram junction, is currently in progress.
The Club HNB, the Bank's private banking Cancer Councelling Progress Report 2022
proposition, powers this initiative by providing
a platform for its members to participate in No. of Patients
140
meaningful philanthropy. 120
100
80
60
40
20
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
New Patients Follow up Patients

Group activities with children
Yarl Geek Challenge

The primary objective of the Yarl Geek
Challenge is to encourage entrepreneurs
and social entrepreneurs to launch their
businesses by creating new technological
products and services that address market
gaps. Bank has provided venue sponsorship
HQTVJG;CTN)GGM%JCNNGPIGHQTVJGRCUVƂXG
years by providing the Jaffna auditorium and
cash awards to the winners.

OUR Rs Bn
CONTRIBUTION 40
TO SDG’S 35
We contribute to 30
several of the United 25
Nations Sustainable 20
Development Goals 15
(SDGs) through our 10
banking operations 5
and strategic CSR 0
initiatives.
ENVIRONMENT
> HNB sponsored the World Habitat Day Art Competition by the Urban Settlement Development Authority
to promote environmental awareness among children.
> HNB implemented an intervention programme in the Colombo and Gampaha districts aimed at
enhancing the economic well-being of underrepresented urban communities through the development of
UGNHGORNQ[OGPVCPFGPVTGRTGPGWTUJKRDGPGƂVKPIRGQRNG
> HNB successfully completed its 5-year initiative of restoring and conserving a 2.5-acres portion of
degraded rainforest within the Kanneliya Forest Reserve
> The HNB>èJĐÛGJĐÛA/áEinitiative donated Personal Protective Equipment to Clean Ocean Force Lanka
to support efforts to reduce the plastic pollution on beaches and waterways.
For more information on environmental CSR inititaves refer our Natural Capital Report on page 74-79
Employees Cycling to work

> HNB Walk the Talk was launched to promote
eco-friendly commuting among staff members,
including cycling, walking, and ride sharing
Employees cycling to work

No. of Employees
60
50
40
30
20
10
0
HO SR USR COL GCR NR NWR NCR ER CR SWR
0-10 Km 11-20 Km 21-30 Km

31-40 Km 41- 50 Km 51 Km Above

CAPITAL REPORTS
Conserve and sustainably use the Protect, restore and promote sustainable use of terrestrial ecosystems,
oceans, seas and marine resources for UWUVCKPCDN[OCPCIGHQTGUVUEQODCVFGUGTVKƂECVKQPCPFJCNVCPFTGXGTUG
sustainable development land degradation and halt biodiversity loss
> As per the bank’s environmental policy, > *0$FQGUPQVƂPCPEGVQEQOOGTEKCNNQIIKPIQRGTCVKQPUHQTWUGKPRTKOCT[
YGFQPoVƂPCPEGKNNGICNƂUJKPIOGVJQFU tropical moist forests, production or trade in wood or other forestry products
UWEJCUp&TKHVPGVƂUJKPIKPVJGOCTKPG other than those from sustainably managed forests, or trade in wildlife or wildlife
environment using nets in excess of 2.5 products regulated under CITES.
km. in length” to ensure the sustainable > .GPFKPIVQ4CKP(QTGUV#NNKCPEGEGTVKƂGFVGCRNCPVCVKQPU4U/P
use of marine resources
> HNB has taken a series of initiatives to reduce its environmental impact, including
> From our total lending portfolio value digitization and GHG emission assessment.
QH4U/PYGKFGPVKƂGFNGPFKPIHQT > 6JG$CPMJCUHQEWUGFQPTGFWEKPIRCRGTWUCIGCPFKPETGCUKPIGPGTI[GHƂEKGPE[
UWUVCKPCDNGƂUJGTKGUCEVKXKVKGUCURGT both of which have helped minimise its impact on the environment.
the CBSL Green Finance Taxonomy > *0$JCUCNUQKPXGUVGFKPTGPGYCDNGGPGTI[UQWTEGUCPFGPGTI[GHƂEKGPV
)WKFGNKPGU
(TKGPFQH5GC%GTVKƂECVKQP technology, reducing its GHG emissions and becoming more environmentally
friendly. Additionally, the bank has introduced sustainable deposit products, such
as the HNB FIT account, to encourage customers to adopt more sustainable
practices.
Ensure access to affordable, reliable sustainable and modern energy for all
> Emission reduction from our renewable energy lending projects
Housing Loan Portfolio for 2022
Rs Bn
20
18
16
14
12
44,623 88,143 165,366 10
tCO2e/year tCO2e/year tCO2e/year 8
6
4
Sri Lanka- Energy Balance 2019 An Analysis of Energy Sector Performance Published by 2
Sustainable Energy Authority 0
Central
Colombo
Eastern
GCR
NCR
NWR
Nothern
SWR
Southern
Uva/
sabaragamuwa
> *QWUKPINQCPUVQVCNNKPI4UOKNNKQPCPFTGUKFGPVKCNRTQRGTV[FGXGNQROGPV
loans totalling Rs 1,020 million.
> +ORTQXGRCUUGPIGTVTCPURQTVD[4U/P Region
> (KPCPEGHQTYCUVGOCPCIGOGPVRTQLGEVUVQVCNKPI4UOKNNKQPGZENWFKPIYCUVG 2020 2021 2022
to-energy projects.
SOCIAL
> Over Rs 14 Mn worth of medical equipment was donated to key > As part of the Sustainable Banking Initiative, HNB enabled the
JQURKVCNUCPF/1*QHƂEGUCETQUUVJGEQWPVT[VJTQWIJ6JG>è SLBA Website’s sustainable banking e-learning module.
JĐÛGJĐÛA/áE initiative > The Saru Gewatte project was initiated during the year with the
> “HNB >èJĐÛGJĐÛA/áE“ nutritional drive for expectant mothers aim of revitalising Sri Lanka’s agricultural sector at the grassroots.
CPFOKETQƂPCPEGITCPVHQTOKETQGPVTGRTGPGWTU Launched in collaboration with provincial and district agricultural
> The “Ride for Apeksha” fund-raising project was carried out QHƂEGUVJGRTQLGEVNGXGTCIGFVJG$CPMoUEWUVQOGTPGVYQTMVQNKPM
to raise funds to purchase medical equipment for the Apeksha rural farmers with urban consumers. The project also seeks to
Cancer Hospital. promote home gardening in urban areas by providing seeds and
fertilizer at discounted prices and conducting knowledge and
> 6JG*0$5WUVCKPCDKNKV[(QWPFCVKQPJCURTQXKFGFƂPCPEKCN
capacity building sessions on home gardening. The project was
CUUKUVCPEGVQQXGTECPEGTRCVKGPVUCPFHCOKNKGUKFGPVKƂGF
piloted in the Central Province and will be rolled out island wide.
by the Apeksha Hospital Counseling Center in Maharagama.
> “Donate a Book for Change” was launched to increase literacy
among rural children with M.D. Gunasena
> Over 202 Nenapubuduwa school libraries have been established
island wide through the Nanapubuduwa project.

Grow beyond boundaries with Achieve gender equality and empower all women and girls
smart solutions from HNB > Value of Rs 151Mn portfolio for sustainable women empowerment
> Loan schemes at concessionary > During the year 2022 SME division was able to disburse loans to the value of
interest rates for capex and Rs 1.45Bn under ADB funded SMELoC schemes, for both SMEs & Tea smallholders.
working capital requirements The bank also accommodated We-Fi grants for women Led enterprises to the value of
> Facilitating Exports 4U/PCPFRTQXKFGFITCPVUHQT6GCUOCNNJQNFGTUVQVJGXCNWGQH4U/P
(Expo Credit)
> Export market places

%QTF'SYVC[
*-.VF Ensure availability and sustainable No of Beneficiaries -Water Supply Project
management of water and sanitation
> Local market place opportunities 209,270 50,000
for all
(Cochchi.lk, Daraz)
> In 2022, the bank funded water supply
> e-Commerce and payment gateway 81,700
RTQLGEVUVJCVDGPGƂVGFQXGT
options (appigo, WEBXPAY)
people across the country.
> Enterprise Resource Planning (ERP)
solutions at a discounted rate 90,000
(Bileeta,Thinkcube)
> Technical and advisory consultation 150,000
/QPCTCICNC$WVVCNC+PVGITCVGF9CVGT5WRRN[|RTQLGEV
services for women-led SMEs #PCOCFWYC+PVGITCVGF9CVGT5WRRN[2TQLGEV|
> Equity investment options through )TGCVGT/CVCNG9CVGT5WRRN[2TQLGEV
Kelani Right Bank Water Treatment Plant Phase II
partner investors (Eqwtay (HK) Ltd) #OCRCTC9CVGT5WRRN[|||||
End hunger, achieve food security and improved nutrition Food production from our lending
and promote sustainable agriculture
Area cultivated production
> Income generation to the farmers and employment generation in (ha) (Mt)
poverty province were carried out through our lending for paddy
cultivation in 2022 Paddy 6,791
Minor foods* 1,175
Gross Income Employment
(Rs Mn) Generation * Big Onions, Chillies, Potatoes, Red Onions, Cowpea, Green Gram, Ground Nuts, Kurakkan and
(man days) * Maize
> From our cultivation loan portfolio (fruits, vegetables and minor
Northern 294
food crops) value of 484Mn (around 40%) contributes to enhance
Eastern 406 22,505 sustainable agricultural practices in the country.
Uva 9 525 > Lending for Fisheries and aquaculture sector in 2022 - Rs 2,108Mn
*Hired Labour > Total Milk Production - 50 Mn L
Total income and employment generation in Sri Lanka through paddy cultivation lending in 2021. > 6QVCNOGCVRTQFWEVKQPHTQORQWNVT[HCTOKPI/V
858Mn gross income generation to the farmers.
> 6,524 Mt of Rice from paddy production. It could produce the
47,533(man days) employment generation equivalent of 182,916 meals in 2022, or enough food to provide
approximately 60,972 people.
Assumptions were based to the above calculations
Used information for calculations
1.Paddy cultivate in Sri Lanka under different water management (irrigation and rain-fed) in two
Cost per cultivation of one hectare of paddy
seasons (Yala and Maha).
Average Yield per hectare
6QVCNEQUVCPFQVJGTƂIWTGUEQPUKFGTWPFGTKTTKICVKQPYCVGTOCPCIGOGPV
NCTIGCOQWPVQH
Cost of cultivations of minor food crops and average yield per hectare
commercial paddy cultivation occur under the IR)
Cost of production of 1L fresh milk
Cost of production of 1kg of meat from poultry farming
2.Total cost Including cost of farmer owned inputs
Sources- Socio Economics and Planning Centre of the Department of Agriculture, Peradeniya.
6QƂPFQWVGORNQ[OGPVIGPGTCVKQPQPN[EQPUKFGTJKTGFNCDQWT
Key Statistics of Dairy Industry-The Department of Animal Production and Health- Annual report
2021
*Used information for calculations
Assumption-Total rice production use only for human consumption
Cost per cultivation of one hectare of paddy
Average Yield per hectare
1 MT rice = 1.43 MT paddy (paddy conversion factor)
Employment Requirements per hectare
Source: Central Bank of Sri Lanka
Gross return per hectare
Rice per capita consumption
Sources- Socio Economics and Planning Centre of the Department of Agriculture, Peradeniya Total Population in Sri Lanka
Source: Department of Census and Statistics Sri Lanka

CAPITAL REPORTS
Total Lending for poverty provinces in Ensure healthy lives and promote well-
2022 being for all at all ages > Employee wages and
Eastern Rs 5,677 Mn > Lending for health care services LiiwÌÃRs 15 Bn
Northern Rs 6,647 Mn development projects Rs 5,628 Mn
> Interest on deposits
> Pharmaceutical and healthcare product
7XC 4U/P
OCPWHCEVWTKPI4U/P Rs 104 Bn
> From our cultivation loan portfolio (fruits,
vegetables, and minor food crops), > Pharmaceutical imports - Rs 2,691 Mn > Dividend payments
the value of Rs 484Mn (around 40%) > 9GFQPQVƂPCPEGVJGRTQFWEVKQPQT 2.7 Bn
contributes to enhancing sustainable trade in alcoholic beverages (except beer
agricultural practises in the country. and wine) or tobacco because of the > Income Tax payments
> Lending for Fisheries and aquaculture social implications. Rs 25.6 Bn
sector in 2022 Rs 2,108 Mn.
Value addition to agriculture products
in 2022 Build resilient infrastructure
Ensure inclusive and equitable quality promote inclusive and sustainable
> Lending for Food and Beverages
education and promote lifelong industrialisation and foster innovation
manufacturing - Rs 4,675Mn
learning opportunities for all
Increase agricultural productivity and > Projects for Road Development
Lending for, : Rs 22,920 Mn
production
> Development of primary and secondary > Rs 1,551 Mn for the development of the
> Lending for farm mechanisation Rs 181 education Rs 9 Mn
Mn telecommunications sector
> Tertiary education development Rs 78 Mn > Rs 5,898 Mn in loans for the development
> Through HNB >èJĐÛGJĐÛA/áE the
> Other educational advancement activities of the information technology and
OKETQƂPCPEGCPF5/'UGEVQTUJCXG
received grants totaling Rs 22 Mn to date.
4U/P communication sectors
Financing Export of Production

1%1%
18% Financing to main export crops
25% Tea
Crop Amount (Mn) Production Used information for calculations
1% of Lending for from Lending Total cost of production per one kg tea Sources: CBSL Annual
6% Production Report 2021 Coconut
Tea 7,094 /V Coconut

11% Coconut 1,728 81 Mn nuts Total cost of production per one nut Sources: CBSL Annual
Report 2021
17% Rubber 1,796 8,126 Mt
1%
4% Rubber
> Lending to minor export crops Used information for calculations
15% RTQFWEVKQP4U/P Total cost of production per one kg rubber
Sources: CBSL Annual Report 2021
Gems > *0$RCTVPGTGFYKVJ%QTFEQOVJG
Diamonds/Ceramic/Leather ƂTUVGXGTFKIKVCNOCTMGVRNCEGVQGPCDNG Assumption: For perennial crops and long-term livestock
development, the outstanding amount as of December 31,
Garments and Fabrics local exporters and manufacturers 2022, was taken per calculations. Amounts granted during the
Food Items to engage with global supply chains, year were taken for other short term agricultural development
Tea extending the work undertaken to activities.
Coconut support growth.
Rubber
Minor export crops
> Lending to tourism sector development
Fish and marine products Rs 5,771Mn
Unprocessed Agricultural Products
Other

.GPFKPIHQT5WUVCKPCDKNKV[%GTVKƂGFGPVKVKGU
Sector Description
iÀÌwV>ÌÀÃÕLìÃVÀ«Ì No. of Value of the outstanding
Credit credit facilities as at
facilities 31/12/2022 (Mn)
Agriculture, Forestry 5WUVCKPCDNGEGTVKƂGF ).1$#.)#2EGTVKƂECVKQP 22 Rs. 484

and Logging agriculture business
1VJGTUWUVCKPCDKNKV[EGTVKƂECVKQPU Rs. 11
5WUVCKPCDNGEGTVKƂGFVGC Rain forest alliance 17 Rs. 892
plantations
5WUVCKPCDNGƂUJGTKGU (TKGPFQH5GCEGTVKƂECVKQP 4U
Replacement of organic '71TICPKEEGTVKƂECVKQP75&#
012 5 4U
fertilizers 1TICPKEEGTVKƂECVKQP
Manufacturing Other sustainable 1TICPKEEGTVKƂECVKQPHQTEQEQPWVQKN Rs. 698
manufacturing
5WUVCKPCDKNKV[EGTVKƂGF6GZVKNGU 4U
5WUVCKPCDKNKV[EGTVKƂGFTWDDGTRTQFWEVU 17 4U
Sustainable tourism National sustainable tourism 12 Rs. 805
and recreation EGTVKƂECVKQP
Total Rs. 9,741
GOVERNANCE
> The Bank signed a Memorandum of > 105 projects were evaluated for social
Understanding with The Capital Maharaja and environmental criteria in line with
Groups initiative Gammadda Sri Lanka, the Bank’s ESMS policy to ensure there
the country’s largest rural development were no adverse social or environmental
movement to develop infrastructure impacts.
facilities of the Yaya 6 village > 9GFQPQVRTQXKFGƂPCPEKCNUWRRQTVHQT
Mahawilachchiya, in the Anuradhapura the production of or activities involving
District. harmful or exploitative forms of forced
> The Bank has entered into an agreement labour or harmful child labour.
with Private Sector Development > We uphold transparent procurement
(PSD) a grant project under Palladium practices in accordance with our board-
International funded by USAID, to approved procurement policy guidelines.
UWRRQTVOKETQƂPCPEGCPFVJG5/'UGEVQT Additionally, we prioritize responsible
> The bank partnered with PPOD supplier partnerships, ensuring that
consultations to provide capacity-building they meet fundamental environmental
programmes to potential SMEs. Regional and social performance standards. The
capacity-building sessions covering principles and standards governing our
ƂPCPEKCNOCPCIGOGPVKPXQKEKPI bank operations are consistently applied
taxation, supplier management, and throughout our supply chain.
other HNB SME products were to be
held.
> An MOU was signed with Bileeta (Pvt)
Ltd. to provide ERP solutions at a
discounted rate to potential SMEs

CAPITAL REPORTS
NATURAL CAPITAL
We recognise the important role we can play

in driving CBSL’s Road Map for Sustainable
Finance in Sri Lanka and continue to take
progressive action to manage our direct and
indirect environmental impact.
VALUE DRIVERS THE RESOURCES WE CONSUME VALUE DRIVERS
Energy Consumption within the Organisation
Investment in branch solarisation project

CPFQVJGTGPGTI[GHƂEKGPE[KPKVKCVKXGU
Electricity from National Grid 11,681
MWh Rs 78.4 Mn
Rs 82 Mn
+PXGUVOGPVKPGPGTI[GHƂEKGPV
Solar Power Generation 1,846 MWh invertor air conditioning technology
Fuel 301,375 L
Energy Consumption outside the organisation
Digitisation drive and

paperless inititave
22%
Reduction in paper consumption
Fuel 225,282 L
Material Consumption
Investment in environment related
CSR activities Extent of reforested land
Rs 29.1 Mn 2.5 acres

Paper Consumption
76,586 Kg
IMPACT
Green finance portfolio

Carbon Foot Print
%
tCo2 7 Agriculture, Forestry
12,000 11 and Logging
3
10,000 Manufacturing
8,000 Electric power generation,
transmission and distribution
6,000
23 Water supply, sewerage and
4,000
waste management
2,000
Sustainable Tourism and
0 recreation
2021 2022
Other Sectors
45 11
Direct Scope 1 Emissions Indirect Scope 2 Emissions
Total Carbon Footprint As per CBSL green finance taxonomy : 2022

MANAGEMENT APPROACH
ISO 14064 CERTIFICATION
#EMPQYNGFIKPIVJGUKIPKƂECPVFKTGEVCPFKPFKTGEVGPXKTQPOGPVCNCPFUQEKCNKORCEVUETGCVGF
through our operations, our environmental agenda is aimed at managing our carbon
footprint and promoting sustainable environmental practices within and outside our
organisation. HNB’s environmental agenda is embedded in the Bank’s overall environmental GREENHOUSE GAS VERIFICATION OPINION
and social policy and is closely aligned to the principles of the Sri Lanka Sustainable Sri Lanka Climate Fund (Pvt) Ltd
Ministry of Environment
Banking Initiatives (SLSBI) put forward by the Sri Lankan Bankers’ Association (SLBA) where
Organization Level GHG statement developed by
Hatton National Bank PLC

No. 479, T B Jayah Mawatha, Colombo 10, Sri Lanka
the overarching goal is to put in place responsible banking practices that avoid, minimise
complying with the requirements of ISO 14064-1:2018 has been verified in
accordance with the specification of ISO 14064-3:2019 with reasonable level
of assurance*
and mitigate the negative impact on the environment and promote sustainable economic
Opinion No : SLCF/CFP/0140
Date of Issue : 23.02.2023
Period of Assessment : 01.01.2022 – 31.12.2022
development. The Bank has also aligned its sustainability initiatives with the Sri Lanka
Selected Boundary : Operationally controlled business operations of Hatton
National Bank PLC (Head office and 255 Branches
Island wide)
Direct GHG Emissions : 2,813 tonnes of CO2 equivalent
Sustainable Finance Roadmap of the Central Bank of Sri Lanka, Indirect GHG Emissions
Total GHG Emissions
: 8,544 tonnes of CO2 equivalent
: 11,357 tonnes of CO2 equivalent
ISO 14065
ENVIRONMENTAL GOVERNANCE
GHG 001-01
««««««««««
Chief Executive Officer
Sri Lanka Climate Fund (Pvt) Ltd
Period of Validity: 23.02.2023 – 31.03.2024
Policy Framework The HNB Monitoring performance

Exclusions: GHG Emissions from em pl oy ee c omm uting, paid by t he c om pany and paper wast e dis pos al.
*Materiality threshold is below 5%
Sustainability Foundation and Reporting

Two key policies govern The HNB Sustainability Monitoring and reporting on
environmental and social Foundation functions sustainability performance
practices across our as the decision making is an important part of
operations. The Bank’s and monitoring body for environmental and social &$5%21&216&,286&(57,),&$7(
&OLPDWH6PDUW,QLWLDWLYHV3YW/WGDVVXUHVWKDW*+*,QYHQWRU\RI
Environmental and Social sustainability at HNB. The governance. We have in

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2
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Management Policy is sustainability foundation place multiple mechanisms

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TXDQWL¿FDWLRQDQGUHSRUWLQJRIJUHHQKRXVHJDVHPLVVLRQVDQGUHPRYDOV

&HUWL¿FDWH1R&OLPDWH6,0593
aimed at mitigating the which also has board to reliably track and report on
'DWHRI&HUWL¿FDWLRQ223
3HULRGRI$VVHVVPHQW2WR2
6FRSHRI&HUWL¿FDWLRQ2SHUDWLRQDOO\FRQWUROOHGEXVLQHVVDFWLYLWLHVEHORQJVWR+DWWRQ1DWLRQDO%DQN3/&
environmental and social representation comprises of ESG performance. 2,813WRQQHVRI&2HTXLYDOHQW

7RWDO'LUHFW*+*(PLVVLRQV
impacts of our lending

7RWDO,QGLUHFW*+*(PLVVLRQV544WRQQHVRI&2HTXLYDOHQW
VJGHQNNQYKPIQHƂEGTU

Key environmental and 7RWDO

11,357WRQQHV of CO equivalent
activities while the Green social indicators are

Pledge policy is aimed at

(QJ + 0
(QJ+0%XGGLND+HPDVKDQWKD
tracked on a bi-monthly
%6F+RQV(QJ0(QJ
Chairman of the Foundation

&KLHI([HFXWLYH2ႈFHU
&OLPDWH6PDUW,QLWLDWLYHV3YW/WG
GPUWTKPITGUQWTEGGHƂEKGPE[ MD /CEO basis and reported 'LUHFW(PLVVLRQV6WDQGE\GLHVHOJHQHUDWRUV5HIULJHUDQWOHDNDJHV)LUHH[WLQJXLVKHUV&RPSDQ\RZQYHKLFOHV

,QGLUHFW(PLVVLRQV,PSRUWHGHQHUJ\*ULGHOHFWULFLW\%XVLQHVVDLUWUDYHOV7UDQVPLVVLRQ GLVWULEXWLRQORVV0XQLFLSDOZDWHU
and responsible behaviour

7UDQVSRUWKLUHG
to the sustainability
([FOXVLRQV(PSOR\HHFRPPXWLQJ7UDQVSRUWORFDOO\SXUFKDVHGLWHPV:DVWHGLVSRVDO:DVWHWUDQVSRUW

within the organisation. foundation on a

3HULRGRIYDOLGLW\WR
NED/NID
quarterly basis through Marking a key milestone in its
ED/COO the CEO Dash Board sustainability journey, HNB PLC
Annual sustainability was awarded the ISO 14064-1:2018
assurance audit EGTVKƂECVKQPD[VJG5TK.CPMC%NKOCVG
DGM-CHRO
(external) Fund in recognition for its commitment
Head of Legal/ Periodic internal to quantify, report and reduce its
Board Secretary sustainability audits for greenhouse gas (GHG) emissions.
selected branches (Since 2021, HNB has been systematically
quantifying GHG emissions.)
AGM Risk Smart Carbon Calculator
system was introduced
AGM Strategy in 2021 to assess and GHG emissions for the year 2022
monitor Bank’s carbon Emission source
footprint. Refrigerant Leakage
Head of Finance Fire extinguishers
ESMS performance is Business air travel
reported in the Annual Company owned vehicles
Head of Marketing Transport Rented, Not Paid
Report Municipal Water
Transport Hired,Not Paid
T & D loss
Head of Services Stand by Generators
Grid Electricity
8,000
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
tCO2e

CAPITAL REPORTS
NATURAL CAPITAL
CLIMATE ACTION
Climate change, caused by excessive greenhouse gas emissions, continues to be a growing challenge with wide ranging implications both
globally and locally. Having understood the critical importance of a concerted effort by society to meaningfully address the issue, the Bank
has formulated a ‘carbon management plan’ as part of its efforts to combat climate change by reducing the carbon footprints of the Bank, its
employees, customers and wider economy.
BRANCH SOLARISATION
We are gradually reducing our dependence on the
national grid through our branch solarisation project.
ENERGY EFFICIENT
TECHNOLOGY PAPERLESS DRIVE
We strive to achieve greater Our strong digitisation
GPGTI[GHƂEKGPE[D[KPXGUVKPI drive, has reduced and in
KPGPGTI[GHƂEKGPVVGEJPQNQI[ some cases completely
such as LED lighting, energy eliminated the need for
GHƂEKGPVNKHVUCPFKPXGTVQTCKT paper-based processes.
conditioning.
PROMOTING SUSTAINABLE GREEN FINANCING

LIFESTYLES
We remain committed to
Environmentally sustainable combating climate change
practices are built into the culture by promoting projects and
of HNB through the HNB Green activities that contribute to
Pledge - a pledge by every a greener, more sustainable
HNB employee to integrate economy in Sri Lanka.
environmentally friendly practices
into their daily activities at work
and at home.
BIODIVERSITY INDUSTRY E&S

CONSERVATION RISK REVIEWS
THROUGH CSR ACTION Are carried out by the
Over Rs 29.1 Mn was ESMS unit to identify
invested in CSR activities climate change related
relating to biodiversity risks and impacts.
conservation.

OUR EFFORTS TO DRIVE CLIMATE ACTION
A total of 95 branches have been solarised The Bank’s renewable energy portfolio, HNB Rideshare initiative was
as of 2022, resulting in which includes investments in solar, introduced during the year to
13% of our total branch energy mini-hydro, wind, and biomass energy, support employees in reducing
requirement being met through solar power surpasses Rs 98 Bn. their individual carbon footprint
by opting for eco-friendly modes
of transport such as carpooling.
Solar Roof Top Branches Renewable energy portfolio
The initiative is an extension of
Nos Rs Bn VJG*0$oUƃCIUJKRn9CNMVJG6CNMo
100 4,000 campaign launched in 2018.
3,500
80
3,000
60 2,500
2,000
40 1,500
1,000
20
500
0 0
2017 2018 2019 2020 2021 2022 Hydro Wind Solar Biomass Waste
to energy
2019 2020 2021 2022
The Bank is committed to reducing paper consumption across its value chain as part of
the paper-less drive initiated in 2009. Digitisation throughout the value chain has led to a
UKIPKƂECPVTGFWEVKQPKPRCRGTEQPUWORVKQP
One of our key long-term projects,
VENDORS AND EMPLOYEES CUSTOMERS the Kanneliya Conservation
SUPPLIERS Project aims to develop a
> E-procurement > Digitisation of internal > Cashless/digital biodiversity credit accrual system
processes payments and transfers for Sri Lanka through reforestation.
> Promote a cashless
society > E-learning > E-statements
> Authorised recyclers > Remote work > Digital Banking APPs
are contracted to > 'ƂNKPI5[UVGOU > Switch to digital
provide a total channels
> Octoplex for approval
recycling solution
and emails for internal > Introducing the ‘Green
> Operate responsibly communications PIN’ The Bank’s ESMS unit carried
and meet basic
> Reusing stationery and > Discontinuing the out industry E&S risk reviews for
standards of
ƂZGFCUUGVU issuance of passbooks CITKEWNVWTGƂUJGTKGUCPFCRRCTGN
environmental and
> Lean Six Sigma for teen accounts sectors to assess the challenges and
social performance
initiatives > E-commerce platform impacts of climate change. Based
> Monitoring and QPVJGƂPFKPIUTGEQOOGPFCVKQPU
> Re-engineering of ‘AppiGo’ to support
reporting of our were proposed to avoid, minimise,
business processes small and medium
performance against mitigate, or offset the negative
enterprises
sustainability KPIs impacts, while also recommending
how to respond to the climate
related challenges.

CAPITAL REPORTS
NATURAL CAPITAL
WASTE MANAGEMENT ENVIRONMENT AND SOCIAL RISK

Waste generated from our operation consist MANAGEMENT
mainly of paper waste and electronic waste. Our Environmental and Social Risk
While driving efforts to reduce paper Management process ensures that the
Paper usage
consumption through the Bank’s paperless environmental and social impacts of our
drive we also encourage recycling paper customers and partners are accurately 76,587 kg
wherever possible. All locations practice KFGPVKƂGFCUUGUUGFCPFCFFTGUUGFQPCP
waste segregation and contracted third ongoing basis. The policy and procedures
parties ensure safe disposal of hazardous are compatible with locally applicable Sri
waste such as e-waste. Waste management Lanka Banks Association’s Sustainable Recycled 100%
practices are monitored on an ongoing basis Banking Principles and the Central Bank
and updated as necessary. of Sri Lanka (CBSL) Sustainable Finance
Roadmap, as well as internationally
RESPONSIBLE LENDING accepted IFC Performance Standards and
Increased online
ADB safeguards. During the year, a total
We are committed to supporting the Transactions
of 105 lending projects were evaluated by
Government’s efforts to transition towards the ESMS unit, out of which 2 were rejected 105%
a green, inclusive, and balanced economy on the basis that they did not comply
in Sri Lanka as laid out in CBSL’s ‘Road with our ESMS standards. We also build
Map for Sustainable Finance in Sri Lanka’. environmental and social considerations into No of customers converted
Accordingly, we ensure that our lending and QWTNQCPCITGGOGPVUYKVJURGEKƂEEQXGPCPVU to E-statements
investment activities are environmentally that address social and environmental risks.
and socially responsible and compatible 356,562
Adherence to these covenants are strictly
with the country’s environmental and social monitored through regular site visits and
regulations, as well as globally accepted ongoing client engagement.
best practices and standards. Our investment in paper
recycling translate to the
saving of
THE ESMS PROCESS
1,913 Trees
Review client activities against the Bank’s exclusion list
Customer’s activity is in the Customer’s activity is not in the

exclusion list exclusion list
197,508 Litres
Initial screening of customer’s of oil
Request not entertained activities, project site and other
aspects as per the checklist provided
E&S risk categorisation using the tool

450,160 kWh
of electricity
Category A Category B Category C
High-risk projects Medium-risk projects Low-risk projects
Refer the facility to the ESMS The Relationship Manager/ 3,576,521 Litres
unit for due diligence. The 1HƂEGTUJCNNEQPFWEVVJG'5 of water
customer needs to follow IFC due diligence exercise as per
performance standards. A gap the format provided.
analysis will be done by the Standard E&S conditions
Compliance
ESMS unit, and an action plan should be included in the loan
statement from 338 Cubic Meter
YKNNDGRTQXKFGFVQƂNNVJGICRU agreement as per the circular QHNCPFƂNN
instructions. all regional
(if any). Special conditions for
QHƂEGUEQPƂTOKPI
the loan agreement will be
the ESMS
provided.
procedures are
followed
Proceed with the appraisal 112,540 kg

of Co2 of GHG Emission
Post-disbursement monitoring

Sustainable Financing Activities BIODIVERSITY CONSERVATION
&WTKPIVJG[GCTYGITCPVGFQXGTHCEKNKVKGUVQUGEVQTUCPFUWDUGEVQTUKFGPVKƂGFCU Throughout the year, the Bank implemented
priority sectors in the Sri Lanka Green Finance Taxonomy introduced in May 2022. a number of innovative environmental
(See the table below). Meanwhile we continue to offer our customers a range of initiatives.
environmentally friendly loan schemes as part of our efforts to promote sustainable initiatives.
Project LIFE
PRIORITY SECTORS AS IDENTIFIED IN SRI LANKA’S GREEN FINANCING The Bank completed its fourth year of
TAXONOMY restoring and managing a 2.5 acres block
The Central Bank of Sri Lanka has introduced the Green Finance Taxonomy in 2022 and HNB of degraded rainforest land at the Kanneliya
JCUKFGPVKƂGFVJGDCPMoUITGGPƂPCPEGRQTVHQNKQCURGTVJGETKVGTKCURGEKƂGFKPVJGVCZQPQO[ (QTGUV4GUGTXG6JGƂXG[GCTTGUVQTCVKQP
6JG$CPMKUKPVJGRTQEGUUQHHWTVJGTKFGPVKH[KPIQHHCEKNKVKGUGNKIKDNGVQDGENCUUKƂGFCU)TGGP programme implemented by Biodiversity
Finance. Sri Lanka (BSL) with the technical support of
the International Union for Conservation of
Nature (IUCN), functions under the guidance
Sector No of credit Value of
facilities outstanding credit of the Forest Department. The Bank has
facilities as at been an active contributor to the restoration
31.12.22 (Rs Mn) project which ensures the establishment
of on-site nurseries, fertilising plants, soil
Agriculture, forestry and logging 72
conservation, improving plant protection
Manufacturing 88 methods and ensuring the plants are
Electric power generation, transmission and distribution 911 watered during the dry season.
Water supply, sewerage and waste management 57 12,687
PPE donation for Ocean Force Lanka
Sustainable tourism and recreation 12 805
The HNB>èJĐÛGJĐÛA/áEinitiative
Other sectors donated Personal Protective Equipment to
(Sustainable Women empowerment initiatives, Waste-to-Energy the ‘Clean Ocean Force Lanka’ as part of
RTQLGEVCPFHCEKNKVKGUITCPVGFVQTGVTQƂVGPGTI[GHƂEKGPVOCEJKPGT[
its efforts to reduce the plastic pollution on
Total 28,007 beaches and waterways.
Environmental awareness programmes This unique, collaborative effort involves

partnering with local communities, drawing
%TGCVKPICYCTGPGUUCPFGFWECVKPIQWTEWUVQOGTUCPFDWUKPGUURCTVPGTUQPVJGDGPGƂVUQH
both volunteers and a task force to tackle
environmental and social sustainability and supporting them in their journey towards a more
the issue of plastic pollution on Sri Lankan
environmentally friendly operation is an important way in which we can have a positive impact
beaches.
on our community. In addition to regular engagement with suppliers and customers, targeted
groups are subjected to awareness and capacity-building workshops on a regular basis.
WAY FORWARD
We also continue to develop the internal capacity required to identify, assess and manage We remain committed to aligning our
environmental and social risks and opportunities associated with our business operations. operations with CBSL’s Roadmap for
Our strategy for greening our business processes is documented in the Green Pledge policy 5WUVCKPCDNG(KPCPEGKP5TK.CPMC+PYG
and the Environmental and Social policy. will continue to strengthen our sustainability
governance framework to bring in greater
board oversight of sustainability practices.
The “Green Pledge” which was launched in
2019 as an employee oath will be upgraded
as the “Green Pledge Policy” and will serve
as the umbrella sustainability policy of HNB.
Meanwhile we will strengthen our reporting
and monitoring mechanisms to better track
our impact on the environment.

CAPITAL REPORTS
Ongoing efforts to nurture our intellectual

capital have enabled us to remain agile and
dynamic while continuing to grow our brand
value. During the year we launched our new
brand identity and rolled out several initiatives
to drive our new brand ethos.
VALUE DRIVERS OUR INTELLECTUAL CAPITAL VALUE CREATED

BRAND EQUITY
Brand Value (2022)
Rs 24.2 Bn
Investment in brand EMPLOYEES BY TENURE
Rs 1.1 Bn
building initiatives Increase in
Over 15 year 2,422 brand value
Over 10 years 826
1XGT[GCTU
SYSTEMS AND PROCESSES
Training investments (WNN[ƃGFIGFFKIKVCNYCNNGV
Rs 48.7 Mn
RPAs
Chatbots
3
New deposit products
IMPACT
9th Best Retail Bank for

Most Valued Brand in the Country
(Brand Finance)
12 years

A NEW BRAND IDENTITY > We Know You Better – making our
customers feel seen by proactively NEW LOGO
With HNB’s decade-long transformational
journey, we unveiled our vibrant new brand delighting them.
identity earlier this year. This new look and
With this brand transformation and post
heightened focus towards our brand-led
the launch of HNB’s new brand identity, one
strategy represents the culmination of an
of the key initiatives in place is investing
ambitious journey to realign HNB and its rich
on our brand visibility at each customer The logo icon referred to as the peak
NGICE[QH[GCTUVQCUKORNGCPFUKPIWNCT
touchpoint, which includes mass media, represents the zenith of growth we want
idea that we make banking enjoyable for all
out-of-home media, digital and social to reach with our stakeholders. Whilst the
Sri Lankans.
media, ATM and Branch screens and most colour yellow represents our customers/
importantly, through our employees as stakeholders whom we enlighten with
To reinforce this idea, an attractive thematic
brand ambassadors of HNB. clarity through consistent optimism and
marketing campaign was launched on mass
RTQOQVKPIRQUKVKXKV[VJGFCTMDNWGUKIPKƂGU
media, under the campaign theme ‘a joy to
This resulted in a positive growth in brand the HNB family; intelligent and trustworthy
bank with’, establishing the fact that HNB is
value by Rs 1.1 Bn, according to the annual individuals who drive technology and the
an intrinsic part of bringing joy to the lives
Brand Finance evaluation, making HNB the light blue, our journey together to achieve
of our people, whilst highlighting our key
9th Most Valued Brand in the country with growth and prosperity, while making
product offering and establishing our four
a brand value of Rs 24.2 Bn, which supports banking enjoyable and creating happiness.
experience principles:
the theory that “brands do not grow by
> Deal Easy – making our touchpoints default but by design”. We are determined
GHƂEKGPVUKORNGCPFCIKNGVQOCMGQWT CPFEQPƂFGPVVJCVVJKUTCPMKPIECPDG
customers comfortable. further enhanced by strongly positioning
HNB as the bank which makes banking
> Count on Us – emphasizing that our
enjoyable. HNB’s brand experience is the
customers can rely on us by being
sum of all sensations, thoughts, feelings, and
transparent and informative, whilst
reactions that our customers will gather in
reassuring the best service.
response to what we do. Brand experience
> Feel Special – making customers feel KUPQVURGEKƂGFVQCEJCPPGNQTOGFKC
valued by being personal and respecting type. Rather, it is the result or the lasting
their needs. impression we want to establish that remains
after someone encounters or engages with
*0$KPCP[GPXKTQPOGPVYJKEJƂPCNN[TGUWNVU
in higher brand equity.

CAPITAL REPORTS
PROCESS IMPROVEMENTS
9GEQPVKPWGVQVTCPUHQTOJQYYGFQVJKPIUDTKPIKPICDQWVITGCVGTGHƂEKGPEKGUCPFƃGZKDKNKV[ HARNESSING OUR INTELLECTUAL
through ongoing process improvements. CAPITAL TO DRIVE EXCELLENCE
-“Committed to Serve Initiative”
A culture of continuous improvement drives these efforts and enables us to stand apart from Led by the Customer Experience Unit
the rest by achieving service and operational excellence. the ‘Committed to Serve’ initiative brings
together cross functional expertise from
Business > Process improvements and people development initiatives were Operations, Human Capital, Talent Centre
Processes carried out at the centers (Credit Admin Department and Centralised and Regional Leadership to identify focus
Credit Operations) with the aim of standardising processes and areas and develop customised learning
RTCEVKEGUKPETGCUKPI(KTUV6KOG4KIJV
(64KORTQXKPIRGQRNGƂVOGPV modules to address customer concerns
upskilling and right sizing to enable improved productivity. highlighted through Customer Service
Survey, the Knowledge Audits and the
> Cross functional initiative led by the Customer Experience
feedback from the Regional Leadership.
&GRCTVOGPVVQHWTVJGTƂPGVWPGRTQEGUUGUCVVJGDTCPEJPGVYQTM
The initiative includes over 100 branches
> Process studies were carried out with the aim of improving island-wide
the Corporate RM productivity to enable more time for client
engagement and relationship management thereby improving client
experience.
Process > Robotic Process Automation was implemented in the Trade Process
Automation VQCWVQOCVKECNN[WRNQCF59+(6FQEWOGPVUVQVJGYQTMƃQYU[UVGO
resulting in productivity improvement of 266%
> Robotic Process Automation is in the process of being deployed
for the Insurance Renewal Process which will eliminate manual
processing from the branch network, resulting in an expected
productivity improvement of 250%
HR Processes 4GURQPFKPIVQVJGITQYKPIPGGFHQTƃGZKDNGYQTMCTTCPIGOGPVUYG
rolled out a pilot project across selected verticals to offer hot desking
CPFƃGZKYQTMQRVKQPUHQTGORNQ[GGU6JGRTQLGEVKUGZRGEVGFVQ
promote a family friendly workplace while also resulting in space
optimisation.
LEVERAGING OUR TACIT KNOWLEDGE banking industry enable us to continue to

The tacit knowledge and collective offer customers innovative new products.
experience of our team of 5,156 employees During the year we introduced three new
is a vital component of our intellectual deposit products namely HNB Teen Plus,
capital as it provides deep insights into HNB Investment Plans and Premier Current
a rapidly evolving banking industry. We Account. We also launched the wallet
EQPVKPWGVQƂPFYC[UQHJCTPGUUKPI feature on our payment app upgrading it to
enhancing and retaining this valuable CHWNN[ƃGFIGFFKIKVCNYCNNGV
resource through innovative learning
opportunities, talent mobility programmes, AWARDS AND ACCOLADES
leadership programmes and knowledge Our commitment to driving excellence in
sharing initiatives. For more details on our all aspects of our operation continues to be
learning and development initiatives please recognised both locally and internationally.
refer page 61 (Human Capital section) of this This local and global recognition contributes
report. in no small measure to our brand value.
NEW PRODUCT DEVELOPMENT

Remaining attuned to evolving customer
requirements is a key element of staying
ahead of the competition. A culture of
innovation combined with our deep
understanding of our customers and the

WAY FORWARD
KEY AWARDS AND ACCOLADES DURING 2022
Enhancing our brand equity will be a main
> Best Corporate Citizen Sustainability Awards 2022 (CCC BCCSA) organised by the focus as we continue with our journey of
prestigious Ceylon Chamber of Commerce transformation in an increasingly competitive
– Overall Winner of the coveted ‘Best Corporate Citizen Sustainability Award’ for and complex banking landscape. We
2022 will therefore continue to strengthen our
systems and processes and leverage our
– Ranked among the Top 10 Best Corporate Citizens extensive base of tacit knowledge to drive
– Governance category winner operational excellence and greater brand
– Sustainability Champion for the Finance sector value.
– Second runner-up for Demonstrated Resilient Practices for COVID-19 category
> Ranked among the top 1,000 World Banks for the sixth consecutive year by Banker
Magazine
> Recognised among CIMA, ICCSL Most Admired Companies in Sri Lanka
> Best Retail Bank in Sri Lanka - International Excellence in Retail Financial Services
Awards 2022 hosted by the Asian Banker Magazine, awarded for the 12th occasion
> ‘Best Service Bank’ and the ‘Market Leader’ in the Euromoney Trade Finance Survey

> No. 5 in the Business Today Top 40 companies rankings
> LankaPay Technnovation Awards 2022
– Gold Award for the Bank of the Year for Financial Inclusivity
– Gold award for the Bank of the Year for Excellence in Customer Convenience
– Silver award for ‘Financial Institution of the Year for Best Digital Payment Strategy
– Bronze award for ‘Overall Award - Excellence in Interbank Digital Payments’
(Banking Institutions)
> Best all-round growth at the annual Daraz Payment Partner Performance Awards 2022
> Best IoT initiative for HNB FIT APP- Asian Digital Finance Forum and Awards
> Silver Award for Best Use of Data at the SLIM DIGIs 2.1 for ‘Leasing Guru’ campaign
to HNB together with ikman.lk
> HNB Chairperson, Ms. Aruni Goonetilleke honored as ‘trailblazer of the year’ in the
11th edition of “Top 50 Professional and Career Women Awards” hosted by Women
in Management (WIM)
> Recognized as offering one of the nation’s best working cultures for women at the
second edition of the Women Friendly Work Awards 2022
> Bronze award in the Private Sector Banks category at the TAGS Annual report awards
by CA Sri Lanka
> Large Scale Services sector Silver award at the National Productivity awards
> #YCTFGFVJG+51EGTVKƂECVKQPD[VJG5TK.CPMC%NKOCVG(WPFTGEQIPK\KPIVJG
commitment to quantify, report and reduce its greenhouse gas (GHG) emissions

CAPITAL REPORTS
MANUFACTURED CAPITAL
Our manufactured capital enables us to

communicate our brand ethos by creating customer
and employee friendly spaces. During the year
we invested Rs 157 Mn in revamping our branch
network to reiterate the banks new brand identity.
VALUE DRIVERS OUR MANUFACTURED CAPITAL VALUE CREATED
Property, Plant & Equipment

LKR Mn
35,000
Investment in branch
revamping initiative
30,000 95
Solarised
Rs 157 Mn
250,00
branches
20,000
15,000
10,000
5,000
Investments in PPE 0
Rs 721 Mn 2020 2021
Land & Building Other
2022
2.4 Mwp
Solar power capacity

REVAMPING OUR BRANCH LOOK GREENING OUR PHYSICAL FOOTPRINT
RETHINKING OUR SPACES
During the year we commenced upgrading We continue to invest in greening our
the look and feel of our branch network physical footprint. 95 branches have been The new branch, referred to as ‘the
VQDGVVGTTGƃGEVQWTPGYDTCPFKFGPVKV[ solarised as at the end of 2022 through Customer Centre’ is designed with the
Accordingly façades, signages, colour our branch solarisation project. Meanwhile customer journey in mind. Customer
themes and branch layouts were redesigned we continue to adopt sustainable building Center spaces are being redesigned
with the overarching aim of “making practices such as LED lighting, Invertor to simplify customer experiences while
banking more enjoyable”. The new look technology, space optimisation and natural ensuring that customers are engaged
was rolled out in a total of 25 branches lighting in all of our premises. We also have and that their every need is met. The
across the network while layout changes in place a robust building management spaces include experimental zones,
were implemented at our branches at U[UVGOVQGPUWTGGHƂEKGPVWUGQHTGUQWTEGU lounges and sitting areas, self-help
Battaramulla, Katugastota and Padukka. within our premises. Three of our branches kiosks and digital screens powered by
(Jaffna, Nittambuwa and Kalmunai) are speed and simple systems.
CREATING WORKSPACES OF THE )TGGP$WKNFKPI%GTVKƂGFCPFYGJQRGVQ
gradually increase this number. > 6JGƂTUVJCNHQHVJGURCEGECVGTU
FUTURE
to quick transactions and includes
As we continue to transform into a a digital zone that is accessible to
workplace of the future we strive to create WAY FORWARD
customers 24X7
inspiring workspaces for our staff. Concepts The branch revamping initiative will continue
UWEJCUJQVFGUMKPICPFQRGPRNCPQHƂEGU KPCUYGUVTKXGVQETGCVGHWVWTGƂV > The rear half of the space is designed
are being explored while the overall spaces that espouse our evolved brand to accommodate customers who
look and feel of work spaces is aimed at ethos. We will also continue to optimise our require longer transactions.
creating “Happy and Bright” spaces for our branch network through branch re-locations
employees. to high footfall areas.
Northern
North Central Province 21
Province 60
10 29 Central
Province
26 80
North Western
Province
Eastern
Province
18 56
25
Western Sabaragamuwa
Province Province
107 11
Uva Province
Southern
Province
12
25
Branches
Self Service Machines

GOVERNANCE AND RISK
BOARD OF DIRECTORS
JONATHAN ALLES ARUNI GOONETILLEKE NIHAL JAYAWARDENE PC

Managing Director / Chairperson Director
DILSHAN RODRIGO

iv ÝiVÕÌÛi"vwViÀ (Independent / Non-Executive) (Non- Independent /
(Executive Director) Director Non-Executive Director)
(Executive Director /

iv"«iÀ>Ì}"vwViÀ®
AMAL CABRAAL MADU RATNAYAKE

Director Director
(Independent / Non-Executive) (Independent /
Non-Executive Director)

DEVAKA COORAY RASITHA GUNAWARDANA DR. PRASAD SAMARASINGHE
Director OSMAN CHANDRAWANSA Director Director
(Independent / Director (Independent Director / (Non-Independent Director /
Non-Executive Director (Independent / Non-Executive) Non-Executive)
Non-Executive Director)
MRS K A L THUSHARI RANAWEERA

PRAWIRA RIMOE SALDIN Company Secretary KITHSIRI GUNAWARDENA
Director Director
(Non Independent / (Non-Independent Director /
Non-Executive Director) Non-Executive)

GOVERNANCE AND RISK
BOARD OF DIRECTORS
ARUNI GOONETILLEKE JONATHAN ALLES Mr Alles was also a Director of Lanka

Chairperson >>}}ÀiVÌÀÉ
iv ÝiVÕÌÛi"vwViÀ Clear (Pvt) Ltd, HNB Assurance Plc, Sithma
(Independent / Non-Executive) (Executive Director) Development (Pvt) Ltd, HNB General
LLM (USA), LLB (SL) M.B.A. Finance (Stirling), A.I.B. Sri Lanka Insurance Ltd, Acuity Stock Brokers (Pvt)
Ltd and Prime Grameen Micro Finance
Appointed Director: April 2021 Appointed: July 2013
Ltd. He served as a member of the Main
Chairperson: September 2021 Executive Director Appointed: May 2013
Committee of the Ceylon Chamber of
Skills & Experience: Skills & Experience: Commerce and was also a member of the
Advisory Committee of Sri Lanka Business &
#TWPK)QQPGVKNNGMGKUCƂPCPEKCNUGTXKEGU #PGZRGTKGPEGFDCPMGTEQWPVKPIQXGT
Biodiversity Platform.
GZRGTVYKVJQXGTVYGPV[ƂXG[GCTUQH years of Banking experience, having served
GZRGTKGPEGKPTGIKQPCNƂPCPEKCNOCTMGVU in several international Banks including the
She has extensive experience in enterprise National Bank of Abu-Dhabi, Saudi British AMAL CABRAAL
Director
risk management, credit, audit and business Bank-Riyadh, British Bank of the Middle-East
(Independent / Non-Executive)
origination and has held leadership and HSBC, Dubai and Colombo, before
positions in local and international Banks. taking on the reins at HNB. Holds an MBA Chartered Marketer - FCIM (U.K.), MBA - University of
from the University of Stirling, UK and is Colombo, Alumnus - INSEAD - France
She has a Master of Laws from Harvard
an Associate Member of the Institute of Appointed: April 2014
Law School, USA and a Bachelor of Laws
Bankers of Sri Lanka.
(Honours) from the Faculty of Law, University
Skills & Experience:
of Colombo. She has been a visiting lecturer Other Current Appointments:
in law at the Faculty of Law and lectured Counts over four decades of business
Mr. Alles is a Director of the Sri Lanka Banks’ experience predominantly in a multinational
in Gender Studies at the Department of
Association (SLBA). He is also a Director corporation with leadership roles in General
Graduate Studies, University of Colombo.
of the Asian Bankers Association (ABA) Management, Marketing and Customer
She has a special interest in issues relating
and serves as the Chairman of its Advisory Management in Sri Lanka and overseas.
to Women’s Empowerment, Diversity and
Council. He is also a member of Sri Lanka
Inclusion in the workplace. Is an Executive Education Alumnus of
Institute of Directors.
She was appointed as a Director of the Bank INSEAD - France and holds a MBA from
Mr Alles is a dynamic Banker and a the University of Colombo. A Marketer by
on 1st April 2021 and was appointed as the
corporate leader; he has contributed to profession and a Fellow of the Chartered
Chairperson on 29th September 2021. At the
HNB’s macro development with the Bank Institute of Marketing - U.K.
time of her appointed as the Chairperson
now operating through 254 customer
of the Bank Mrs Goonetilleke held the Chair
centres, using cutting edge technological Other Current Appointments:
of the Board Integrated Risk Management
platforms and enabling a new paradigm Mr. Cabraal is the Chairman of Ceylon
Committee of HNB PLC.
in Sri Lanka’s banking culture. Under his Beverage Holdings PLC and Lion Brewery
Other Current Appointments: leadership, HNB has received recognition (Ceylon) PLC and also the Chairman
from numerous international and local of Sunshine Holdings PLC, Silvermill
She currently holds the positions of Non-
institutions and continues to set new Investment Holdings and CIC Feeds Group
Executive / Independent Director of Tea
benchmarks in the Sri Lankan banking of Companies. He is also a Non-Executive
Small Holder Factories Plc, Softlogic Finance
industry. Director of John Keells Holdings PLC and
Plc, Goodhope Asia Holdings Ltd and
Eswaran Brothers Exports Pvt Limited. serves as a business advisor to a number of
Previous appointments
companies. He is a member of the Board
Previous appointments He served on many Boards within the HNB of the Ceylon Chamber of Commerce and
Group as well as in the Banking Industry. serves on the Management committee of
Her last role was Head of Corporate Banking
He was the Chairman of Sri Lanka Banks’ the Mercantile Services Provident Society.
at People’s Bank, where she was responsible
Association (Guarantee) Ltd from 2014 to
for a large portfolio of public and private
2016 and in 2018, he was elected Chairman Previous appointments
sector clients. Immediately prior to that,
of Asian Bankers Association for the Chairman and CEO of Unilever Sri Lanka.
she was the Head of Credit for Commercial
period 2018 to 2021. He also served as the
Banking, at Standard Chartered Bank,
Chairman of Financial Ombudsman Sri Lanka
Singapore. She has also held the positions
(Guarantee) Ltd, HNB Finance Plc, Acuity
of Head of Credit for SME at Standard
Partners (Pvt) Ltd, Lanka Ventures Plc, LVL
Chartered Bank, Singapore, Chief Risk
Energy Fund and Lanka Financial Services
1HƂEGT5VCPFCTF%JCTVGTGF$CPM5TK.CPMC
Bureau Ltd. He served as the Vice Chairman
and Global Audit roles in Wholesale and
of Banking, Financial & Insurance Services
Retail Banking at Standard Chartered Bank.
Group of the Employers’ Federation of
Ceylon.

DR. PRASAD SAMARASINGHE Degree in Software Engineering from City DEVAKA COORAY
Director University in London and Dip.in Computer Director
(Non-Independent Director / Non-Executive) System Design (NIBM) Sri Lanka. (Independent / Non-Executive Director)
PhD (Australia), MEng (Sri Lanka), BSc. (Eng.) FCA (SL), FCMA (UK)
Has over 20 years’ experience in IT, digital
Hons (Sri Lanka)
transformation, project and service delivery. Appointed: July 2020
Appointed: October 2022 He has experience in large scale business
transformation program design and Skills & Experience:
Skills & Experience: execution, driving corporate innovation, Mr Cooray is a Fellow Member of the
Appointed as a Director in October 2022. cyber security, solution architecture, Institute of Chartered Accountants of
Dr Prasad Samarasinghe holds a Doctorate customer support, consultancy and general Sri Lanka and the Chartered Institute of
in Telecommunications bestowed upon by management in UK, USA, Australia, India Management Accountants of the United
Australian National University of Canberra. and Sri Lanka. He has delivered multi- Kingdom.
He achieved Master of Engineering and million-dollar projects to Fortune 1000
Bachelor of Science in Electronics and companies with geographically spread Other Current Appointments:
Telecommunications with a First Class from software teams. Mr. Cooray is the Chairman of United Motors
University of Moratuwa. PLC and its subsidiaries. He is also the
Other Current Appointments: Managing Director of Management Systems
In addition, Dr Samarasinghe is a Licentiate
Mr Ratnayake is the Co-Founder and (Pvt) Ltd and its subsidiaries. He serves
of Part I and Part II of Institute of Chartered
Chairman of Scybers (Pvt) Ltd, a global as Director of Life Insurance Corporation
Accountants of Sri Lanka and the recipient
cybersecurity consulting and managed (Lanka) Ltd, HVA Foods PLC and JAT
of best achiever status from the Institute in
services company, and Director of HSenid Holdings PLC.
Financial Accounting, Business Mathematics
$WUKPGUU5QNWVKQPU
2XV.VFƂTUVNKUVGF
Statistics and Data Processing in the year Previous appointments
software technology company in Sri Lanka.
1991.
He has worked with Ernst & Young for over
He represents the IT industry on the boards
Other Current Appointments: of several leading universities / institutions.
[GCTUQHYJKEJ[GCTUYCUCUC5GPKQT
Assurance and Talent Partner. He functioned
Dr Samarasinghe is the Managing Director/
Previous appointments as the Deputy Managing Partner from 2016
Director of Lanka Bell (Pvt) Ltd from July
to 2019 and served as a member of Ernst
2005 and also the Managing Director of Mr. Ratnayake was the Executive Vice
& Young’s Management Committee from
Telecom Frontier (Pvt) Ltd, Bell Solutions President / Global CIO and the Center Head
the time the Management Committee was
(Pvt) Ltd from September 2008 and for Virtusa Sri Lanka. He has also served as a
established in 1998 until his retirement in
Bellvantage (Pvt) Ltd from April 2021. Director of Sanasa Development Bank from
2019. He was instrumental in establishing
December 2014 to January 2016 and Sri
Dr Samarasinghe is also a Director of the Ernst & Young Practice in the Republic
Lanka Institute of Information Technology.
Hayleys Fibre PLC, serving in its Board of Maldives in 1995 and functioned as
from September 2017, Director of DCSL He is also the Founder Director and the Partner responsible for the overall
Brewery (Pvt) Ltd and Maganeguma Road former Chairman of Sri Lanka Association management of the Maldivian Practice from
construction Equipment Company (Pvt) Ltd. for Software and Services Companies its inception. He represented Sri Lanka
Dr Samarasinghe represents Mr Damien (SLASSCOM), the industry body for IT and Maldives for a number of years in the
Fernando on the Boards of HNB Assurance and BPM in Sri Lanka and the Chairman EY ASEAN Regional Partner Forum. He
PLC and HNB General Insurance Ltd, as his of Sarvodaya Fusion, the ICT4D arm of was seconded to EY USA for a year, where
alternate Director. Sarvodaya, the largest NGO in Sri Lanka practical experience was gained by being
and he was an Independent/Non-Executive part of assurance teams that performed
MADU RATNAYAKE Director of Sri Lanka CERT (Pvt) Ltd, national audit engagements on several large
Director cybersecurity agency and Director of enterprises.
(Independent / Non-Executive Director) Information Communication Technology
Mr. Cooray also spearheaded the Ernst
B.Eng (Hons) (London), MBA (Sri Jayawardenapura), Agency (ICTA), the National Agency for
and Young Sri Lanka/ Maldives Family
Dip.in Computer System Design (NIBM Sri Lanka) Digital Government.
Business Centre for Excellence which was
Appointed: October 2018 instrumental in sending several eminent
second generation family members to
Skills & Experience: business schools worldwide. He has also
A Chartered Engineer, he holds a MBA from served as a member of the Council of
the Postgraduate Institute of Management the Chartered Institute of Management
(Sri Jayawardenapura), a First Class Honors Accountants UK.

GOVERNANCE AND RISK
BOARD OF DIRECTORS
DILSHAN RODRIGO papers in various forums locally and overseas National Gem & Jewellery Authority as a
Director on Strategy, Business Transformation and &KTGEVQTGZQHƂEKQHTQO#WIWUVVQ
ÝiVÕÌÛiÀiVÌÀÉ
iv"«iÀ>Ì}"vwViÀ® Risk Management. Mr. Rodrigo has also September 2014.
MBA (UK), FCCA (UK), FCMA (UK) served on local governing councils of CIMA,
APB, ACCA and Risk Professional Forum and PRAWIRA RIMOE SALDIN
Appointed: July 2020
in the latter two as President. Director
Skills & Experience: (Non Independent / Non-Executive Director)
Mr. Rodrigo possesses over two decades OSMAN CHANDRAWANSA FCA (Sri Lanka), FCMA (UK), CMA (Australia)
Director
in banking experience and is the Executive Appointed: April 2021
(Independent / Non-Executive Director)
&KTGEVQT%JKGH1RGTCVKPI1HƂEGTQH
Hatton National Bank PLC. He provides MSc (UK), BTI (SL), Dip. In Money & Banking (UK) Skills & Experience:
administrative leadership to Finance, IT, Appointed: April 2021 Appointed as a Director in April 2021. He
Credit, Operations, Risk Management, is a fellow of the Institute of Chartered
Banking Services, Compliance and Internal Skills & Experience: Accountants of Sri Lanka, an associate
Audit functions. He is overseeing the cross Mr Chandrawansa served as the Controller of Institute of Chartered Accountants
functional teams involved in improving of Exchange in Central Bank of Sri Lanka of England and Wales, a fellow of the
governance and compliance by serving in from 2009 to 2014 till his retirement. He Chartered Institute of Management
several Board and Management committees holds a Master of Science degree in Banking #EEQWPVCPVUQH.QPFQPCPFC%GTVKƂGF
in the Bank. Mr. Rodrigo holds a MBA from and Finance and a postgraduate Diploma in Management Accountant Australia.
%TCPƂGF7PKXGTUKV[7-(%/#7-CPF(%%# Money and Banking from the University of
UK. /T5CNFKPJCUQXGT[GCTUQHGZRGTKGPEG
Birmingham UK.
in Finance, Operations and General
He has played a catalyst role in the bank’s Mr Chandrawansa has published papers Management.
transformation and cultural change by being on foreign exchange forward market in
the driving force towards centralization, Prior to being appointed to the Board of
Sri Lanka and Measures for Development,
automation, outsourcing and process Directors of Hatton National Bank PLC, Mr.
(GCUKDKNKV[QH+PƃCVKQP6CTIGVKPIKP5TK.CPMC
improvement initiatives and recognized Saldin functioned as Alternate Director to
and empirical studies of the exchange rate
for driving a performance culture through Mr. R.S. Captain from 26th July 2018 to 2nd
XQNCVKNKV[CHVGTVJGƃQCVCVKQPQHVJG4WRGG
training, talent acquisition and introducing April 2021.
and its implications for the Economy. He has
several break through cost optimization contributed his knowledge in the capacity Other Current Appointments:
initiatives. of a member of the Central Banks’ Financial
He is presently the Director/CEO of Polypak
5VCDKNKV[%QOOKVVGG5VWF[6GCOQP+PƃCVKQP
Other Current Appointments: Secco Ltd, a Director of Paints & General
Targeting for Sri Lanka and Annual Reports
Mr Rodrigo has held many senior positions Industries Ltd and Polytex Properties and
Perpetration Committee from time to time.
in multiple industries ranging from banking, Investments Ltd. He is also the Chairman
He is a regular writer to the weekly papers
insurance, investment banking and apparel. of Chemanex PLC and a Director of CIC
published in the Island as well.
He presently functions as Chairman of Holdings PLC and serves on the Board of
HNB Finance PLC and holds Directorships Previous appointments Directors of a number of companies in the
in HNB Assurance PLC, Guardian Acquity CIC Group.
Mr Chandrawansa had a long term service in
Management, Lanka Financial Services the Central Bank starting from the year 1975. Mr. Saldin is an alumni of the Asia Institute of
Bureau and Credit Information Bureau. Mr During his tenure he has held the positions Management.
Rodrigo serves on the councils of the Sri in the Central Banks’ EPF Department,
Lanka Institute of Directors (SLID) and was /CVCTC4GIKQPCN1HƂEG+PVGTPCVKQPCN Previous appointments
the Chairman Policy Advocacy Committee Operations Department, Economic Research Mr. Saldin has served as the Commercial
of Asian Bankers Association (Taiwan) during Department as a Senior Economist, Director and Group Finance Director of CIC
2011/12 and 2019/20. Domestic Operations Department, Holdings PLC for the period 1995-2005.
Financial System Stability Department, He was the Country Controller & Group
Previous appointments
Department of Supervision on non-Bank Finance Director for Shell Sri Lanka for
He has served as a lecturer and examiner on ƂPCPEKCNKPUVKVWVKQPUCPFVJG'ZEJCPIG the period 2005-2010 and also the Group
various undergraduate and postgraduate Control Department. He had received %JKGH1RGTCVKPI1HƂEGT$TQYPU)TQWRQH
programs (CIMA, ACCA, PIM and University GZVGPUKXGVTCKPKPIKPDCPMKPIƂPCPEGDQVJ Companies PLC and the Managing Director
of Wales MBA programs) and is a Guest internationally and locally. Mr Chandrawnasa of Browns Investments PLC from 2010-2014.
.GEVWTGTHQT5.+&&KTGEVQT%GTVKƂECVKQP CNUQUGTXGFKPVJG'ZQHƂEKQQHƂEGQHVJG
Program. He has presented various technical

NIHAL JAYAWARDENE PC Ltd from 2005 -2008 and he also served as KITHSIRI GUNAWARDENA
Director a Director of People’s Leasing and Finance Director
(Non- Independent / Non-Executive Director) PLC. (Non-Independent Director / Non-Executive)
LL.M (Lond), President’s Counsel Attorney-at-Law, Postgraduate Diploma in Marketing
RASITHA GUNAWARDANA Management (PIM, Sri Jayewardenepura)
Appointed: August 2021
Director Appointed - January 2022
Skills & Experience: (Independent Director / Non-Executive)
/T,C[CYCTFGPGLQKPGFVJG$CTKP*G Chartered Management Accountant of United Skills & Experience:
JCUJKUECTGGTGZRGTKGPEGCUCPQHƂEGTQHVJG Kingdom Chartered Global Management Accountant Has held a number of important positions
Ƃ

iÀÌwi`/Ài>ÃÕÀÞ"«iÀ>ÌÃ
Attorney General’s Department of Sri Lanka KPVJG5VCVGKPENWFKPIVJGQHƂEGQH5VCVG
in excess of 20 years, Senior Lecturer of Sri Appointed – January 2022 Counsel attached to the Attorney General’s
Lanka Law College and Legal Consultant &GRCTVOGPVVJG1HƂEGQH&KTGEVQTs.GICN
and Board Member in numerous Institutions. Skills & Experience: Enforcement of the Securities and Exchange
He is an Attorney at Law of the Supreme Mr. Rasitha Gunawardana is a senior Banker Commission of Sri Lanka and the Insurance
Court of Sri Lanka and Solicitor of the YKVJQXGTFGECFGUQHGZRGTKGPEGEQXGTKPI Board of Sri Lanka and was involved in
Supreme Court of England & Wales. major aspects of Banking. setting up the Consumer Affairs Authority as
KVUƂTUV&KTGEVQT)GPGTCN
Mr. Jayawardene has actively contributed Previous Appointments:
for many law reforms initiatives taken place Other Current Appointments:
He served as the CEO/ General Manager
KP5TK.CPMCKPVJGƂGNFQH%KXKN#XKCVKQP Mr. Kithsiri Gunawardena is the Chief
of the Peoples Bank during the period
Company Law, and has extensive experience 1RGTCVKPI1HƂEGTs.1.%%JKGH'ZGEWVKXG
2019-2020. Prior to that, He held a number
in Public Enterprises reforms programmes 1HƂEGT.1.%+PUWTCPEGJG,QKPGF.1.%KP
of Corporate and executive level positions,
carried out in the areas of Insurance, CPFEQWPVUQXGT[GCTUQHGZRGTKGPEG
namely,
Telecommunication, Aviation, Port & as a Lawyer. He serves on the Boards of a
Shipping and Plantation sectors. » Senior Deputy General Manager (Business
number of local and overseas subsidiaries
Banking)
In recognition of immense contribution within the LOLC Group.
» Deputy General Manager (Risk
made to the Legal Profession as an eminent
Management)
senior counsel in Corporate, Commercial, THUSHARI RANAWEERA (MRS)
Aviation and Public Law he was appointed as » Deputy General Manager (Credit Control) Company /Board Secretary
a President’s Counsel in the year 2012. » Assistant General Manager (Treasury (upto 1st January 2023)
Operations) Appointed: January 2012
Mr. Jayawardene also played a leading role
in the process of drafting the Colombo Port During this period, he played a major role
Skills & Experience:
City Economic Commissions Act. Presently in improving the Credit and Risk culture of
involved in drafting Electricity Sector Reform the Bank, through introduction of risk-based She is an Attorney-at-Law and counts over
Laws. credit and business policies/ procedures. [GCTUQHGZRGTKGPEGKP$CPMKPI
Other Current Appointments: He held directorships in following Mrs Ranaweera holds a Master’s Degree
establishments; in Law (LLM) – University of Cambridge,
He is presently the Chairman of Company U.K. and a Diploma in International Affairs
Law Advisory Commission and a Member » Peoples Leasing and Finance PLC – Bandaranaike Centre for International
of the Board of Civil Aviation Authority Studies, Sri Lanka.
» Peoples Insurance PLC
of Sri Lanka, a member of Board of
Governors in Asian Institute of Business and » Peoples Merchant Finance PLC
Other Current Appointments:
Science (AIBS) and the in-house Counsel » Lanka Clear Ltd
Deputy General Manager - Legal of
of Capital City Law. He is also a Member » Institute of Bankers of Sri Lanka HNB, a Director of Acuity Stock Brokers
of the Intellectual Property Law Advisory (Pvt) Limited, Vice President of Sri Lanka
» Credit Information Bureau of Sri Lanka
Commission. Bank Company Secretaries Association
(CRIB)
Previous appointments » Peoples Travels Ltd & a Council Member of Association of
Professional Bankers of Sri Lanka (APB).
Mr. Jayawardena has served as the founder » Peoples Micro Finance Ltd
Chairman of Lanka Sathosa Limited and a » Lankan Alliance Finance Ltd- Bangladesh Previous Appointments:
Director of Hotel Developers Lanka Limited Member of Board of Governors of Sri Lanka
from 2004 to 2015, a Director of Milco (Pvt) National Arbitration Centre (2012-2017).

GOVERNANCE AND RISK
CORPORATE MANAGEMENT
2 3 4 1 5 6 7
1 JONATHAN ALLES 4 RUWAN MANATUNGA 6 NIROSHANA SENEVIRATNE

M.B.A. Finance (Stirling), A.I.B. (Sri Lanka) F.C.M.A (UK), C.G.M.A, F.C.A (Sri Lanka) Attorney at Law, F.C.A., F.I.B., C.P.A.,
>>}}ÀiVÌÀÉ
iv ÝiVÕÌÛi"vwViÀ Deputy General Manager C.I.S.A. (USA), PhD (Aldersgate)
,ÃÉ
iv,Ã"vwViÀ Deputy General Manager
2 DILSHAN RODRIGO - Internal Audit /Chief Internal Auditor
° °Ƃ°
À>wi`®]°
°°Ƃ°1®]
°°°Ƃ°] 5 CHIRANTHI COORAY
F.C.C.A. (UK) FCMA (UK), CGMA, M.B.A. (Wales), 7 DAMITH PALLEWATTE
ÝiVÕÌÛiÀiVÌÀÉ
iv"«iÀ>Ì}"vwViÀ S.C.P. SHRM (USA), I.P.M.A. - CP (USA) M.B.A. (PIM-SJP), BSc. Mgmt. (Hons.)
Deputy General Manager / Chief Human London School of Economics, F.C.M.A (UK),
3 THUSHARI RANAWEERA CGMA., FRM. (GARP), A.C.I.
,iÃÕÀVi"vwViÀ
Attorney at Law, LL.M. (Cambridge), Deputy General Manager
Dip. in Int’l Affairs (BCIS) - Wholesale Banking Group
Deputy General Manager – Legal

9 10 11 13 12 8
8 SANJAY WIJEMANNE 10 NIROSH PERERA 12 HISHAM ALLY

B.Sc. Business & Finance M.B.A. (Manipal), Dip. in Marketing - L.B.S. (Sri Lanka) M.I.M. (Sri Lanka) ACSI (CISI)
(Mount Saint Mary’s University, USA) i«ÕÌÞiiÀ>>>}iÀÉ
iv
Ài`Ì"vwViÀ Deputy General Manager - Islamic Banking
Deputy General Manager - Retail Banking Group
11 RAJIVE DISSANAYAKE 13 TYRONNE HANNAN
9 ARJUNA ABEYGUNASEKARA C.F.A. (USA), F.C.M.A.(UK), C.G.M.A., M.B.A (Australia)
M.B.A. (Colombo), B.Sc. (Colombo), B.B.A. (Colombo) Head of Custody and Trustee Services
A.C.M.A. (UK), C.G.M.A., A.C.I. Deputy General Manager
Deputy General Manager - Treasury & Markets É
iv>V>"vwViÀ

GOVERNANCE AND RISK
CORPORATE MANAGEMENT
17 18 20 25 14 26 15
14 MAJELLA RODRIGO 16 DRUVINDA VAIDYAKULARATNE 19 KANCHANA KARUNAGAMA

A.C.M.A (UK), C.G.M.A., M.B.A. (Colombo), F.B.C.S. (UK) M.B.A. (Sri J), A.I.B. (SL), M.C.I.M. (UK), A.I.C.M. (SL)
B.Sc. (Colombo) Assistant General Manager – Information Assistant General Manager - Personal Financial
Assistant General Manager - Corporate Banking /iV}ÞÉ
ivvÀ>Ì"vwViÀ Services
15 INDRAJITH SENADHIRA 17 VINODH FERNANDO 20 SUPUN DIAS

M.B.A. (Sri J.), M.A.L.S. (Colombo), LL.B (Sri Lanka), M.C.I.M. (UK), M.S.L.I.M, Chartered Marketer,
Head of Micro Finance
Attorney-at-Law, Dip in Marketing (S.L.I.D.A.), Dip in Marketing (UK)
Dip in Credit Mgmt. (S.L.I.C.M.), A.M.C.I.P.M.
18 SISIRA ATAPATTU Assistant General Manager - Network
Assistant General Manager - Services / Chief Management
Assistant General Manager - Recoveries
«Þii Ý«iÀiVi"vwViÀ

19 22 24 16 23 21 27
21 SIVARAJAH NANDAKUMAR 24 DILUNIKA JAYASINGHE 26 CHAMMIKA WEERASINGHE

M.B.A. (Sri J), A.I.B. (Sri Lanka) M.B.A. Finance (USQ, Australia), F.C.A (Sri Lanka), M.B.A. (Sri J), M.C.I.M. (UK)
Assistant General Manager - Operations B.Sc. (Colombo), A.C.S.I. (UK) Assistant General Manager - Digital Business
Assistant General Manager - Risk
22 KAILAVASAN INDRAVASAN 27 NEIL RASIAH
M.B.A. Finance (Australia), C.M.A. (Australia), 25 PRIYANKA WIJAYARATNE M.B.A. Finance (USQ, Australia), M.A Financial
A.I.B. (Sri Lanka) M.B.A. (Sri J), A.C.M.A. (UK), C.G.M.A., Economics (Colombo), B.Sc. (Colombo), A.I.B.
Assistant General Manager - SME B.Sc. (Colombo) (Sri Lanka), Dip. in Int. Trade (IBSL)
Assistant General Manager – Strategy Assistant General Manager - Compliance
23 VIJAYA VIDYASAGARA
M.B.A. Finance (Colombo), A.I.B (Sri Lanka), AICM (SL)
Assistant General Manager
- Emerging Corporates & Project Finance

GOVERNANCE AND RISK
SENIOR MANAGEMENT
SAUMYA ARYASINHA EOMAL MUNASINHA

Head of Employee Banking M.B.A. - Edith Cowan University - Australia

ivi>À}"vwViÀ
VIRAJ MENDIS PRIYANTHA SENEVIRATNE SHANKAR DHARMARATNE

A.I.B. (Sri Lanka) A.C.I. B.Sc in Business Administration - University of Coventry
Head of Credit Operations Chief Manager - Treasury (Corporate Sales) (UK)
Head of Digital Services
ANURADHI DELAGE SHERAN PERERA SURESH EMMANUEL

A.C.A. (Sri Lanka), A.C.M.A (UK), C.G.M.A., M.B.A. (UK), A.I.B. (Sri Lanka) M.B.A (Cardiff - UK), B.Sc. Computer Science (IIC Uni.),
B.Sc. Accountancy (Sri J) Head of HR Operations C.I.S.S.P (USA), C.I.S.M (USA), C.I.S.A (USA),
Head of Finance C.D.P.S.E. (USA)

ivvÀ>Ì-iVÕÀÌÞ"vwViÀ
TISSA NANAYAKKARA
Head of Card Operations

SOTHIRATNAM MATHANAN RAJEEV RAJARATNAM
M.B.A. (Australia), F.A.B.E. (UK) A.I.B. (Sri Lanka)
Chief Manager - Credit Operations Head of IT Project Delivery & Portfolio Management
SOMASKANDASARMA NARENTHIRAN SAMPATH KUKULEVITHANA THUSITHA EDIRIWEERA

M.B.A. (UK) M.B.A. (Manipal), Dip. in Marketing (UK) M.B.A. (UK), LLB (Sri Lanka), Attorney-at-Law, Notary
Regional Business Head - Colombo Region Regional Credit Head - North Western Region Public & Commissioner for Oaths, M.C.I.C.M. (UK),
F.I.C.M. (Sri Lanka), M.I.M.S.L.
Chief Manager - Legal (Recoveries)
VIRANGA GAMAGE SHIROMI HALLOLUWA MURTAZA NORMANBHOY

LL.B (Sri Lanka), M.B.A (Colombo), Attorney-at-law Attorney-at-Law & Notary Public, Company Secretary F.C.A. (Sri Lanka), F.C.M.A. (Sri Lanka)
Head of Deposits Head of Legal/Board Secretary Chief Manager - Internal Audit
RAJEEV PERERA
M.B.A. (UK)
Chief Manager - Network Business Facilitation

GOVERNANCE AND RISK
SENIOR MANAGEMENT
UDARA PATHINAYAKE DAMIAN RANJIT

M.B.A. (Uni. of Preston - USA) PG. Dip. in Business & Financial Administration (ICASL),
Head of Pawning A.I.B. (Sri Lanka)
Regional Credit Head - Greater Colombo Region
THANGARAJAH THAYALAN DILANKA DE SILVA SURANGA PEIRIS

M.B.A. (Australia), A.I.B. (Sri Lanka), M.A.B.E. A.C.I.M. (UK) M.B.A. - Finance (USQ, Australia), A.C.M.A. (UK),
Chief Manager - Foreign Exchange
iv>>}iÀi>`"vwVi À>V C.G.M.A., A.I.B. (Sri Lanka)
& Money Markets Head of Emerging Corporates
CHAMARA GUNAWARDENA ROSHAN FERNANDO RUKSHAN SENARATNE

PG. Dip in Computer Science (Colombo), B.I.T. (Colombo) M.B.A. (Colombo), B.Sc. Eng. (Hons) (Moratuwa), M.I.E.T. (UK) M.B.A. (Malaysia)
Head of Digital Deliveries and Enterprise Software ÀiVÌÀÉ
iv"«iÀ>Ì}"vwViÀq-Ì>iÛi«iÌ Chief Manager - Centralized Credit Operations
(Pvt) Ltd.
Head of Services
GAUTHAMI NIRANJAN
C.M.A. (Sri Lanka), M.B.A. (Edith Cowan University -
Australia)
Head of Cards

ROZANNE DE ALMEIDA ROSHANTHA JAYATUNGE
A.I.B. (Sri Lanka) Ƃ°° °-À>>®]*ÀviÃÃ>
iÀÌwi`
>V
®
Head of Trade Head of Talent Development
DEEPAL UDUKUMBURA VINDHYA WIJEGUNAWARDANE PASINDU DHARMASIRI

N. Dip. Technology (Hardy TTI), M.B.A. (Cardiff Metropolitan University. UK) B.Sc. (Hons.) - IT (London Metropolitan Uni. - UK),
P.G. Dip Management (Rajarata) Senior Manager/Head of Customer Experience M.Sc. (IT) - (Charles Sturt Uni. - Australia)
Regional Credit Head - North Central Region Head of Payment & Cash Management
ANGELINA DHARMARAJ ARUNA SUMANASINGHE DAPHNE GAMAGE

M.B.A. (UK), A.C.S.I. (UK), A.I.B. (Sri Lanka) M.B.C.S. (UK) M.B.A. (UK)
Head of Centralized Credit Administration Senior Manager - Application Management Senior Manager - Inward Remittances/SWIFT
SUSITH PERERA BANDULA MONNEKULAMA SIVASARAVANABAVAN SUNTHARESWARAN

A.I.B. (Sri Lanka) N.D.T. - Agriculture (HTTI) M.B.A. (Manipal), BSc Hons. (Agriculture)
Head of Leasing Regional Business Head - North Central Region Head of HR Business Partnering

GOVERNANCE AND RISK
SENIOR MANAGEMENT
UPUL ADIKARI NILUKA AMARASINGHE

M.B.A. (Sri J.), Chartered Marketer, PhD. Management (MSU), M.B.A. (Peradeniya)
FSLIM (SL) MCIM. (UK), P.Mkt (SL) A.I.B. (Sri Lanka)
Head of Marketing Head of SME - Products & Partnerships
SIDDIQUE FALEEL AMILA RANASINGHE PRASANNA KUMARA

M.B.A. - Finance (USQ, Australia) A.C.M.A. (UK), C.G.M.A. A.C.A (Sri Lanka), M.B.A. (Colombo),
Senior Manager - MI & Analytics B.Sc. Accountancy Special (Sri J.)
Senior Manager - Recoveries
Senior Manager - Finance & Regulatory Reporting
SHALINDRA KARUNARATNE MANOJ PITADENIYA LALINDRA TISSERA

Regional Credit Head - Southern Region A.I.C.A (UK), A.I.C.M (UK), A.I.C.M (Sri Lanka), M.B.A (Colombo), A.C.M.A. (UK), C.G.M.A.,
Diploma in Credit Management M.C.I.M. (UK), A.I.B. (Sri Lanka)
Head of Centralized Credit Monitoring Senior Manager – Rajagiriya Branch
MICHELLE DE SILVA ROHANA AMARASIRI VATHULAN GANESHAN

Senior Manager / Head of Club B.Sc. in Physical Science (Sri J), M.B.C.S. (UK) Regional Business Head - Greater Colombo Region
Senior Manager - Service Delivery

RAJITHA WIJENAYAKE PRASAD TENNAKOON
N.D.E.S (Mechanical Engineering) M.B.A (Wales, UK), M.B.C.S. (UK), IT Diploma (Tech, SL)
Regional Business Head - Southern Region Head of IT Infrastructure Operations
SOHAN FERNANDO MAHINDA SENEVIRATHNE AJITH KANDARAMAGE

M.B.A (Cardiff Metropolitan, UK), Diploma in Finance & Bank M.B.A (Cardiff Metropolitan, UK), Diploma in Agri. (SLSA) B.Sc. in Computer Networks & Systems Security
Management (IBSL), Diploma in Credit Management (IBSL) Regional Business Head-South Western Region (North West, USA), M.B.C.S. (UK)
Regional Business Head - North Western Region Head of IT Infrastructure Support
VAJIRA ABEYSUNDERA MEWAN GUNAWARDENA NATASHA HAY

A.C.M.A. (UK), C.G.M.A., B.A. (Hons) (Northumbria, UK), C.F.A. (USA), A.C.M.A (UK), A.C.I. Diploma M.B.A. - Edith Cowan University - Australia,
Master of Financial Economics (Colombo), A.I.B. (Sri Lanka) Senior Manager - FI Trading & Customer Sales
iÀÌwi`-«iV>ÃÌ/,9E8"«iÀ>ÌÃ
Senior Manager - FX Trading & Customer Sales Head of Institutional Banking
PRASAD JAYATILLEKE SUJEEWA JAYASINGHE HARSHA WICKRAMASINGHE

M.B.A. (Manipal), A.I.B. (Sri Lanka), AIB (SL), MBA - Finance (Colombo) M.B.A (Cardiff - UK)
Diploma in Credit Management Regional Operations Head - Colombo Region Regional Business Head - Central Region
Regional Operations Head
- Greater Colombo Region

GOVERNANCE AND RISK
SENIOR MANAGEMENT
CHAMINDA ABEYASINGHE SATHIYAMOORTHY AMALAN

Dip. in Computer Programming, System Analysis & Dip. in Business Management (ACHE), M.B.M- Finance
Design, Masters in Information Technology (University of (University of Southern Queensland, Australia),
Keele, UK), M.B.C.S. (UK), A.C.S (Australia) C.M.A. (Australia)
i>`vč>ÞÌVÃEčÀÌwV>Ìi}iVi Senior Manager – Wellawatte
ESHAN JAYARATNA NITHIYANANTHAM KETHISWARAN NADUN GOMES

LL.B (Buckinghamshire New University) A.I.B. (Sri Lanka), C.M.A. (Aus), M.C.S.I (UK) AIB (SL), DCM, MBA (Manipal), PMP (USA)
-iÀ>>}iÀq
ÌÞ"vwVi Regional Business Head - Eastern Region Head of IT PMO
NISHANTHAN KARUNAIRAJ SITHY RUMAIZA FAAIZ ROSHAN ANURADHA

Attorney-at-Law M.B.A (UK)
Regional Business Head - Northern Region
Senior Manager - Legal Operations Senior Manager - Operations
AZYAN HAMEED GAYATHRI GANESHAN MANOJITH WEERASURIYA

Senior Manager - Card Systems A.I.B. (Sri Lanka), A.C.M.A (UK) , MAFE (Colombo) ACCA (UK), B.Sc in Commerce in Accounting & Finance
Senior Manager - Talent Development (Deakin University), Master of Applied Finance (Monash
University)
Senior Manager – Unit Head Corporate Banking

CHAIRPERSON’S MESSAGE ON CORPORATE GOVERNANCE
Principle D.5
“Effective leadership, rigorous

risk & performance management,
strategic agility and enhanced
accountability underpinned by
responsible decision making”
i>À->ÀiìÀÃ] am particularly proud of the level of The regulatory and policy landscape
engagement and the quality of deliberations became a challenge during the year,
In times of uncertainty, we are cognizant made during the year. There has been continuing to evolve at an accelerated
of the importance of sound governance robust debate on issues, underpinned rate, following GoSL’s and CBSL’s action to
in driving resilience, nurturing growth and by mutual respect and an appreciation manage the nation’s economy and impacts.
UVTGPIVJGPKPIVJGVTWUVCPFEQPƂFGPEGQH of responsibilities, that we bear to all Being a key stakeholder of the economy, the
stakeholders. The HNB Board has set in stakeholders, in the creation of sustainable Bank understood its moral obligation and
place a robust Governance Framework that value. complied with all regulations and measures
supports integrated thinking and informed taken by the CBSL/GoSL, to support the
decision-making, and reconciles the interests In line with the Bank’s sound governance management of the economy.
of the Bank, stakeholders and society in practices, we continue to make good
creating and protecting sustainable value. progress with succession planning and the As required by the Code of Best Practice on
refreshment of skills of the Board and its %QTRQTCVG)QXGTPCPEG+EQPƂTOVJCV+CO
GOVERNANCE IN 2022 Sub-Committees. I am pleased to welcome not aware of any material violations if any
Mr Rasitha Gunawardana, Mr Kithsiri of the provisions embodied (i) in the Board
The challenges of 2022 continued to test the Gunawardena and Dr Prasad Samarasinghe Charter, by the Board of Directors of the
resilience of our Governance Framework, to the Board. I take this opportunity to thank Bank; or (ii) in the Bank’s Codes of Conduct
structures, and systems. Conscious of Mr Damien Fernando, for his invaluable and Ethics, by any member of the Corporate
QWTƂFWEKCT[TQNGVJG$QCTFUGVVJGVQPG contribution to the Bank, on behalf of the Management team of Hatton National Bank
from the top, living by HNB’s values Board. PLC.
and upholding the highest standards of
Corporate Governance. I also wish to thank Ms Thushari Ranaweera,
who retired as Company Secretary, in
Vigilance and oversight of the Board ,CPWCT[HQTJGTWPUVKPVKPIUWRRQTV
KPETGCUGFUKIPKƂECPVN[CUVJG$QCTFTGIWNCTN[ and guidance, and welcome Ms Shiromi
reviews and monitors execution of the Halloluwa in her new role.
Bank’s strategy, supporting management
to navigate the increasingly challenging Aruni Goonetilleke
business landscape. Risk management, CULTURE AND VALUES
Chairperson
liquidity, regulatory compliance, recoveries, Our corporate culture and values guide our
and internal control were key priorities. conduct. We strive to entrench an ethical
Effective leadership, rigorous risk and culture and value system throughout the Colombo, Sri Lanka
performance management, strategic agility Bank. The Whistle Blowing Policy was VJ(GDTWCT[
and enhanced accountability underpinned strengthened last year and the Bank’s
responsible decision making, that ensured Employee Handbook encompassing the
the Bank remained stable and secure. Code of Conduct and Ethics, was designed
to assist employees in making ethical
BOARD CHANGES & SUCCESSION decisions.
We have a strong Board, comprising

a diverse mix of skills and experience. COMPLIANCE
Individual Director’s insights and wisdom HNB is committed to safeguarding its
supported collective decision making by TGRWVCVKQPƂPCPEKCNUQWPFPGUUCPFKPVGITKV[
the Board, to effectively drive the Bank’s through compliance with applicable laws &
strategic direction. As Chairperson, I regulations and standards of conduct.

GOVERNANCE AND RISK
CORPORATE GOVERNANCE
THE BOARD OF DIRECTORS - 2022

HIGHLIGHTS 2022 Principles A.1, A.10
> Increased rigour of oversight in CHAIRPERSON EXECUTIVE DIRECTORS

managing the impact and risks to
the Bank, arising from the Nation’s
economic crisis, including liquidity,
recoveries and asset quality.
Recalibrated strategy to meet
stakeholder needs.
> Complied with all heightened

regulations and reporting ARUNI GOONETILLEKE (MRS) JONATHAN ALLES
requirements of CBSL and
> Chairperson > Managing Director / Chief
supporting GoSL to manage the
(Independent Non-Executive) 'ZGEWVKXG1HƂEGT
economy.
> Appointed Chairperson - > Appointed MD/CEO - July
> Sharpened focus on ESG integration September 2021
and strengthened ESG Governance > Appointed to Board - April 2021 > #RRQKPVGF&KTGEVQT/C[
Framework.
> Expertise - Legal and Banking & > Expertise - Banking and Finance
> Continued to strengthen the Finance
oversight over the information
technology and digital strategy.
Accelerated the launch of digital
solutions. COMPANY SECRETARY
> Enhanced system security and cyber
safeguards.
> Approved the merger of HNB

Finance PLC with Prime Finance PLC,
optimizing synergies.
> Continued to review the succession DILSHAN RODRIGO

planning for the Board, KMP THUSHARI RANAWEERA (MRS)
including MD/CEO, ED/COO and > Appointed Executive Director - July
> Company Secretary 2020
Senior Management of the Bank.
(upto 1st January 2023)
> #RRQKPVGF%11,WN[
> Conducted annual appraisal of the > Appointed - January 2012
> Expertise - Banking and Finance
Board, shared collated results with > Expertise - Legal
members regarding the performance
GHHGEVKXGPGUUCPFKFGPVKƂGFCTGCU
for improvement.
RETIREMENTS
DAMIEN FERNANDO
> Non-Executive Director

> Appointed - October 2018
> Retired - October 2022

INDEPENDENT NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR
AMAL CABRAAL MADU RATNAYAKE RIMOE SALDIN NIHAL JAYAWARDENE PC
> Independent Non- > Independent Non- > Non-Executive Director > Non-Executive Director
Executive Director Executive Director > Appointed - April 2021 > Appointed - August 2021
> Appointed - April 2014 > Appointed - October 2018 > Expertise - Management > Expertise - Legal
> Expertise - Management > Expertise - Information and Finance
and Marketing Technology
DEVAKA COORAY OSMAN CHANDRAWANSA KITHSIRI GUNAWARDENA DR PRASAD SAMARASINGHE
> Independent Non- > Independent Non- > Non-Executive Director > Non-Executive Director
Executive Director Executive Director > Appointed - January 2022 > Appointed - October 2022
> Appointed - July 2020 > Appointed - April 2021 > Expertise - Legal and > Expertise - Information
> Expertise - Accounting and > Expertise - Banking and Business Administration Technology/
Finance Finance Telecommunication
(Alternate Director to Damien
Fernando from July 2019 to
October 2022)
BAC Board Audit Committee

HRRC HR & Remuneration Committee
RASITHA GUNAWARDANA
NC Nomination Committee
> Independent Non- BIRMC Board Integrated Risk Management Committee
Executive Director RPTRC Related Party Transactions Review Committee
SIRC Strategy & Investment Review Committee
> Appointed - January 2022
PADC Procurement & Assets Disposal Committee
> Expertise - Banking, Credit BCC Board Credit Committee
and Risk Management BRC Board Recoveries Committee
BDBC Board Digital Banking Committee
Chairman/Chairperson

GOVERNANCE AND RISK
The following steering instruments reference

the Bank’s Governance Framework.
GOVERNANCE FRAMEWORK REGULATIONS
The Board has overall responsibility for governance > Companies Act No. 7 of 2007
across the Bank and retains effective control through the > $CPMKPI#EV0QQH
CUCOGPFGF
Board approved Governance Framework. and all Directions, Guidelines issued
thereunder
> Continuing Listing Requirements of
Colombo Stock Exchange (CSE)
> Securities and Exchange Commission of
STAKEHOLDERS
Sri Lanka Act. No 19 of 2021
Customers Employees Shareholders Regulators Government Suppliers > All other relevant laws and regulations
GOVERNANCE FRAMEWORK VOLUNTARY STANDARDS

> Code of Best Practice on Corporate
Governance issued by CA Sri Lanka
VISION, MISSION, STRATEGIES & VALUES
(2017)
> Gender Parity Reporting Framework
(2019) of CA Sri Lanka
> Integrated Reporting Framework
Board Governance Risk Governance Financial Governance Sustainability published by the IIRC
Governance
> Global Reporting Standards of the
> The Board > Risk Management > Strategy and Global Reporting Initiative Standards
> Reporting and
Integration issued by the Sustainability Accounting
> Board Composition > Internal Controls Disclosures
Standards Board
> Independence > Information > Stakeholder of Economic,
Technology Engagement Environmental
> Board Refreshment
Governance > Constructive Use and Social impacts
> Board Meetings
of AGM (EES) INTERNAL FRAMEWORKS
> Sub-Committees > Compliance
Governance > Articles of Association of the Bank
> Ethical Conduct
> Governance of > Good Governance for Group
Group Companies Companies
Report reference pages Report reference pages Report reference pages Report reference pages > Charters/TOR of Committees
107 to 118 119 to 120 121 to 122 123 to 124 > Code of Conduct
> Comprehensive suite of Internal Policies
GOVERNANCE OUTCOMES
RESPONSIVE DECISION MAKING RESPONSIBLE BEHAVIOUR

INTERNAL MECHANISMS
Sustainable Effective Ethical > Strategic Planning

Accountability
Value Creation Controls Leadership > Budgeting and Finance
> Risk Management
> People Management
> IT Governance
> Stakeholder Engagement
> Investor Relations

BOARD’S KEY RESPONSIBILITIES
> Provide strategic direction

> Monitor implementation of strategies
> Set corporate values and promote ethical
behaviours
> Establish systems of risk management,
internal control and compliance
BOARD GOVERNANCE > Be responsive to the needs of society with
focus on environmental, social and ethical
THE BOARD standards
Principles A.5, A.5.1 > Meet shareholders’, employees’ and other

stakeholders’ obligations, balancing their
The Board leads the Bank in formulating strategy, setting risk appetite, monitoring interests in a fair manner
performance and the achievement of goals and objectives. In deliberating strategy, an
integrated approach is adopted to value creation, embracing stakeholder inclusivity and > Present a balanced and understandable
considering the Environmental, Social and Governance (ESG) impacts across the Bank. assessment of the Bank’s position and
Feedback obtained from our stakeholder engagement mechanisms forms a key input in prospects
strategy formulation. > Safeguard assets and ensure legitimate use
> Assess effectiveness of the Board and Sub-
The HNB Board brings independent, informed and effective judgement to bear on Committees through self-evaluation
material decisions reserved for the Board. It sets the tone for ethical and effective
leadership. > Ensure succession planning and the
continuous ability of the Bank to operate
without any disruption
Principles A.1.2, D.1
Board Focus Areas for 2022
STRATEGY & RISK & OVERSIGHT GOVERNANCE STAKEHOLDER FINANCIAL

BUSINESS ENGAGEMENT PERFORMANCE
> Rigorous oversight of > Performance review of > Appointments and > Convening of digitally > Financial impact
the Bank’s strategic the Bank rotations of Directors enabled / hybrid from volatility in
plan, and impact of > Indepth review of > Review of Sub- format Annual General macro environment,
risks & opportunities the Bank’s Enterprise Committee Meeting (AGM) particularly on liquidity
> Advanced ESG wide Risk Metrics, compositions > Review of shareholder > Financial impact of
journey by developing particularly operational > Succession planning communication, AGM asset quality and
sustainability framework risk, liquidity risk of Board and Senior and investor forums impairments
and policy and asset quality/ Management Review > Review of regulatory > Optimizing capital
> #RRTQXCNQHUKIPKƂECPV impairment of Bank’s talent reviews and structure
investments > Optimization of internal development plans engagement with CBSL > Proposed dividend
> Improvement of IT control framework > Board appraisal > Monitoring of payments including
system stability and > Compliance oversight and action plan employee engagement scrip dividend issues
security > Review of cyber security to implement surveys and people > Approval of Financial
> Continuous support risks and oversight of recommendations plans Statements and Annual
of product innovations the information security > Review of policy Report
and new product frameworks
launches
> Approved merger of
HNB Finance PLC with
Prime Finance PLC
> Approval of budget


GOVERNANCE AND RISK
BOARD COMPOSITION
BOARD COMPOSITION
Principles A.4, A.5, A.5.1, A.5.2
BOARD SIZE INDEPENDENCE
The Board is diverse and well balanced.
Appropriate Board size QHVJG
The Bank uses a competency matrix to promotes accountability Directors are
support recruitment of Directors. and encourage healthy & Non-Executive
constructive debate, and Directors
Directors are chosen for their corporate decision-making, while and majority Non -Executive
leadership skills, experience and expertise. meeting regulatory requirements. of them are Directors are
Non-Executive Directors are eminent independent. independent
RTQHGUUKQPCNUKPVJGKTTGURGEVKXGƂGNFU DIVERSITY OF EXPERTISE
The careful selection of individual Directors,
which ensure the most appropriate Strategy &
Banking Leadership
combination of expertise and experience, Independent 50%
has underpinned the effectiveness of the Accounting Treasury
& Finance Operations
$QCTFKPHWNƂNNKPIKVUTQNG
Legal
The Board of Directors and Information

Technology &
Marketing
its Sub-Committees are Management,
Communication
Enterprise Risk
entitled by regulation to seek & Governance Non-Independent 50%
independent professional
advice concerning the AGE DIVERSITY
GENDER DIVERSITY
Bank’s affairs, at the Bank’s Well represented, balance in terms of
experience and perspectives.
expense.
Average age 59.8 years
Less than 60 years More than 60 years
50% 50%
11 : 1
Female 8%
0% 20% 40% 60% 80% 100%
DIVERSITY OF NON-EXECUTIVE TENURE

Sound balance between continuity, new
expertise and insights.
Male 92%
6
0
Less than Less than More than
1 year 5 years 5 years
Average Tenure 2.3 years

INDEPENDENCE
Principles A.1.5, A.5.3, A.5.4, A.5.5
CHAIRPERSON
Directors are deemed independent based Independent, Non-Executive
QPVJGETKVGTKCURGEKƂGFKPVJG$CPMKPI#EV Aruni Goonetilleke
Direction No.11 of 2007.
Directors should be independent in character

and judgement. There should be no
relationships or circumstances which are likely to NON-EXECUTIVE DIRECTORS INDEPENDENT
affect, or appear to affect, this independence. Rimoe Saldin 1 NON-EXECUTIVE DIRECTORS
Nihal Jayawardene Amal Cabraal
> Assessment of Directors’ independence is
Prasad Samarasinghe Madu Ratnayake
conducted annually.
Kithsiri Gunawardena 4 5 Devaka Cooray
> All Directors submit annual declarations Osman Chandrawansa
which are evaluated to ensure regulatory Rasitha Gunawardana
compliance. 2
> Directors’ independence in judgement is
assessed through the Board appraisal.
6JG$QCTFYCUUCVKUƂGFVJCVVJGTGYGTGPQ EXECUTIVE DIRECTORS
relationships or circumstances likely to affect, or Jonathan Alles
appear to affect, the Directors’ judgements. Dilshan Rodrigo
Segregation of Roles & Responsibilities

Principles A.2, A.3
The role of the Chairperson is distinct and separate from that of the MD/CEO. The delineation of roles and areas of responsibilities, as
mandated in the Board Charter, recognises the independent roles and duties required to effectively govern the Bank. It ensures that no single
person has unfettered decision-making powers.
KEY LEADERSHIP ROLES AND RESPONSIBILITIES
CHAIRPERSON MANAGING DIRECTOR/CHIEF EXECUTIVE OFFICER
Leads the Board, preserving Good Corporate Governance, Accountable to the Board for exercise of authorities delegated
ensuring that it works effectively and acting in the best interest of and for the performance of the Bank.
the Bank.
RESPONSIBILITIES
RESPONSIBILITIES > Ensuring proper succession planning of executive team and
> Sets ethical tone for Board and Bank; assessing their performance;
> Leading the Board in providing strategic oversight and > Developing the Bank’s strategy for consideration and approval
leadership to the Board; by the Board;
> Sets Board’s annual work plan and agendas in consultation with > Developing and recommending budgets to the Board,
Company Secretary and MD/CEO; supporting Bank’s strategy;
> /CKPVCKPKPIUVCMGJQNFGTVTWUVCPFEQPƂFGPEG > Monitoring and reporting the performance and compliance
> Ensuring effective, regular communication with shareholders with regulatory and policy framework to the Board;
and their views are communicated to the Board; > Establishing an appropriate organisation structure for the Bank;
> Ensuring effective participation of all Board members; > Setting the tone for ethical leadership and creating an ethical
> Ensuring balance of power between Executive and Non- environment;
Executive Directors; > Ensuring a culture that is based on the Bank’s values;
> Monitoring the effectiveness and performance of the Board of > Ensuring that the Bank operates within the approved risk
Directors and, its Sub-Committees; appetite.
> Ensuring the provision of accurate, timely and clear information
to Directors.

GOVERNANCE AND RISK
BOARD REFRESHMENT New Appointments

Principles A.7, A.8 Nomination of Directors has been delegated to the
Nomination Committee (NC).
Refreshment facilitates the legal and IT, in support of the Bank’s
introduction of members with new strategic needs. 1
skills, insights and perspectives, while Selection
maintaining continuity and retaining In the event of resignations or process is
NC conducts a
valuable industry knowledge. removal of Directors if any, and guided by
thorough
the reasons are promptly informed a formal &
search
transparent
The Board is refreshed periodically to the regulatory authorities
process
through new appointments. and shareholders as per CSE 2
requirements, together with a
When nominating candidates, UVCVGOGPVEQPƂTOKPIYJGVJGTQT
4 3
The Board
the Nomination Committee (NC) not there are any matters that need NC
approves
considers the Board’s Skill Matrix, recommends
to be brought to the attention of nominations
candidates to
which combine knowledge, shareholders. & commences
the Board for
experience and diversity of the Board regulatory
approval
in relation to the Bank’s strategic The Articles of Association of the process
plans and any gaps thereof. Report of $CPMTGSWKTGUQHVJG0QP
the Nomination Committee is given Executive Directors to retire from 6
on page 155. QHƂEGCPFUVCPFHQTTGGNGEVKQPD[ CBSL conducts
shareholders at the subsequent CƂVCPFRTQRGT The Board
The Board as a whole is evaluated assessment approves the
Annual General Meeting, subject to
for effectiveness in discharging their and provides candidate as a
EQORNGVKPIVJTGG
[GCTUKPQHƂEG a Statement of Director
duties and responsibilities annually. from his/her last date of re-election. No-objection
Directors are assessed for their 5
active engagement, contribution and Director tenure is limited to a
independence, prior to nomination maximum term of nine (9) years and 7
Director
for re-election. an age limit of up to seventy (70) retires and Formal
[GCTUYJKEJGXGTEQOGUƂTUVKPNKPG re-elected by disclosure is
Recent appointments over the past with the provisions of the Banking Act shareholders at made through
5 years, have sought to broaden the Direction No.11 of 2007. the next AGM CSE
$QCTFoUGZRGTVKUGKPVGEJPKECNƂPCPEG
8
APPOINTMENT RETIREMENT RESIGNATION RE-ELECTION

> Mr Rasitha Gunawardana > Mr Damien Fernando (NED) > There were no resignations > Dr Prasad Samarasinghe
(INED) in January 2022 in October 2022 during the period (NED) will offer himself for
> Mr Kithsiri Gunawardena > Mr Amal Cabraal (INED) will re-election at the AGM to
(NED) in January 2022 TGVKTGQPCHVGT DGJGNFQPVJ/CTEJ
> Dr Prasad Samarasinghe completing 9 years as a
(NED) (Previously alternate Director
Director to Mr Damien
Fernando) in October 2022
Training & Induction Board members undertake relevant Succession Planning

Principle A.1.8 training, as appropriate to enhance their The Board and Nomination Committee
understanding on key matters and risks continuously review succession planning
Newly appointed Directors are provided with
related to the business. Directors undertake efforts at the Board level of Key
an orientation pack with all relevant external
Continuous Professional Development (CPD) Management Personnel. Similarly, the
and internal regulatory documents. Directors
programmes in their personal capacity to HRRC reviews the succession planning
are apprised of the Bank’s business, their
update their knowledge on relevant and HQTKFGPVKƂGFETKVKECNTQNGUCPFGZGEWVKXG
duties and responsibilities as Directors and
emerging topics. management of the Bank. The succession
opportunities to meet with KMP and visit key
branches. plans identify emergency successors, while
ensuring their development plans.

BOARD MEETINGS
Principles A.1.1, A.1.4, A.1.6
The Board and Sub-Committee meetings were held regularly. Directors ensure that they
98%
Average Attendance
CNNQECVGUWHƂEKGPVVKOGVQFKUEJCTIGVJGKTFWVKGUGHHGEVKXGN[/GGVKPIUYGTGYGNNEJCKTGFCPF
,iyiVÌÃ>VÌÛi >À`
agendas were set to serve the purpose of the Committees. The Company Secretarial function engagement by Directors
supports the Board effectively. All Directors have access to the services of the Company
Secretary. Special Board meetings were convened to address urgent business requirements.
Meeting Attendance
Principle A.10
Related Party Transactions

Management Committee
Board Credit Committee

Nomination Committee
Strategy & Investment
Procurement & Assets

Board Integrated Risk
Board Digital Banking

Date of Appointment
Disposal Committee
HR & Remuneration
Review Committee
Review Committee
Board Recoveries
to the Board
Committee
Committee
Committee
Board
Board Member
Total Meetings Held 14 9 7 7 11 4 7 12 6 8 21

Mrs Aruni Goonetilleke 01st April 2021 14/14 7/7 7/7 7/7 6/6
8/8
Mr Jonathan Alles UV/C[ 12/14 *5 *6 *4 0/11 4/4 *7 *5 4/21
Mr Amal Cabraal 01st April 2014 14/14 7/7 7/7
6/6 8/8

Mr Damien Fernando 25th October 2018 **11/11 **10/10 **5/6 **10/10 **16/18
(Retired w.e.f. 25th October 2022)
Mr Madu Ratnayake 25th October 2018 14/14 7/7
6/7 9/11 5/7 20/21

Mr Dilshan Rodrigo 01st July 2020 14/14 *8 *11 *2 *6 *11 *5 *8 *18
Mr Devaka Cooray TF,WN[ 14/14 9/9 7/7
*10 4/4
4/6
Mr Osman Chandrawansa 01st April 2021 9/9 4/4 6/6
Mr Rimoe Saldin VJ#RTKN *9 11/11
12/12

Mr Nihal Jayawardene PC 17th August 2021 14/14 11/12 5/6 8/8
Mr Rasitha Gunawardana 21st January 2022 9/9 10/10 11/11 8/8
Mr Kithsiri Gunawardena 21st January 2022 9/9 6/7 7/7
Dr Prasad Samarasinghe 26th October 2022 0/1 1/1 2/2
* Meetings attended by invitation

** Includes Meetings attended by an alternative Director
Chairperson/Chairman as at 31st December 2022
Meeting with NED Board Appraisal Informed Decision Making

Principle A.5.9 Principles A.1.8, A.9 We believe “Better information means
better decisions”. The Bank’s reporting and
The Chairperson met once with Non- The Board and Sub- Committees, seek to information systems ensure that the Board
Executive Directors without Executive continuously improve the performance receives relevant and objective information
Directors during 2022. NEDs were provided and effectiveness by self-evaluations. The in a timely manner.
the opportunity to raise matters considered process is guided by the Bank’s policy.
as sensitive for discussion in the presence
of the Executive Directors. The Chairperson
provides feedback to the MD/CEO.

GOVERNANCE AND RISK
Governance of Meetings
BEFORE THE MEETING
1 2 3 4 5
> Board Calendar > Directors submit > Chairman sets the > Notice of the > Directors have
for following year proposals for Board Agenda Meeting, Agenda UWHƂEKGPVVKOGVQ
is shared with inclusion in the assisted by the and Board Papers prepare for the
Directors agenda Company Secretary for the meetings meeting
> Reserved dates and MD/CEO are shared through > Directors have
for Board and > The Agenda is a secure electronic unrestricted access
Sub-Committee prioritized and platform, seven (7) to executive
meetings timed to ensure all days ahead management,
items are discussed Bank’s information,
and resources to
discharge their
duties
Principles A.1.1, A.6
DURING THE MEETING
1 2 3 4 5 6
The Chairperson Directors engage in Exercise Directors are All proceedings of Corporate
facilitates active constructive Board independent expected to excuse the Meeting are Management and
participation deliberations and judgement in the themselves from minuted, including external experts
objective evaluation discharge of duties meetings, where Directors’ dissenting are invited to make
of matters set before effectively EQPƃKEVQHKPVGTGUV views presentations
them may exist
Principle A.5.10
AFTER THE MEETING
1 2 3
Board decisions are Board minutes Minute Book is

follow-up by the are circulated to maintained with
Company Secretary, members within signed copies of the
through an Action two (2) weeks of the minutes
Tracker Meeting being held
Principle A.1.7

HNB GOVERNANCE STRUCTURE
External Auditors Shareholders Regulators
BOARD OF DIRECTORS
Mandatory Board Sub-Committees Voluntary Board Sub-Committees
Board Audit HR & Nomination Related Board Strategy & Procurement Board Credit Board Board
Committee Remuneration Committee Party Integrated Investment & Assets Committee Recoveries Digital
Committee Transactions Risk Review Disposal Committee Banking
Review Management Committee Committee Committee
Committee Committee
(BAC) (HRRC) (NC) (RPTRC) (BIRMC) (SIRC) (PADC) (BCC) (BRC) (BDBC)
Managing Director / CEO
Executive Director / COO
Chief Internal Chief Risk Compliance

Corporate Management Team
Auditor "vwViÀ "vwViÀ
Executive Committees
Compliance Business Executive Operational Asset & Information IT Steering New Product Productivity Human
Committee Functions Risk Risk Liability Security Committee Development Improvement Capital
Outsourcing Management Steering Committee Steering Committee Committee Management
Review & Credit Committee Committee Committee
Committee Policy
Committee
Reporting Lines
Appointed by

GOVERNANCE AND RISK
BOARD SUB-COMMITTEES Mandatory Committees
Principles A.10, B.1

Board Audit Committee (BAC)
The Board has delegated certain Composition of Directors Areas of Oversight
functions to 10 Sub-Committees, 5 of
which are voluntary. This has allowed Mr Devaka Cooray (Chairman) > Monitor and review adequacy and effectiveness of Internal controls,
the Board to devote necessary time Mr Osman Chandrawansa IQXGTPCPEGRTQEGUUCPFƂPCPEKCNTGRQTVKPIRTQEGUU
and attention to matters reserved for Mr Kithsiri Gunawardena > Exercise independent oversight of the Bank’s assurance functions
their decision making, while enabling including internal and external audit
Mr Rasitha Gunawardana
critical matters to receive in-depth focus > Review compliance with relevant legal, regulatory and accounting
at committee level. Committees also standards in the preparation of Financial Statements
DGPGƂVHTQOVJGURGEKƂEGZRGTVKUGQH ,i«ÀÌ,iviÀiViq«>}i£ÈÓ
individual Board members.
Chairperson/Chairman of the Nomination Committee (NC)

Committees are accountable for the Composition of Directors Areas of Oversight
effective functioning of the Committees
Mr Devaka Cooray (Chairman) > Identify skill gaps and recommending of new appointment of
and report regularly to the Board on
Mrs Aruni Goonetilleke Directors and KMP to the Board
activities and highlight critical matters
for Board attention. The mandates Mr Madu Ratnayake > Review Succession Plans of Directors, KMP and Bank’s critical roles
of the Committees are approved by > Review the Bank’s adequacy of Corporate Governance Framework,
the Board and reviewed regularly. policies and skills required to achieve strategic goals
4GRQTVUQHVJGƂXG
%QOOKVVGGU ,i«ÀÌ,iviÀiViq«>}i£xx
which constituted under regulatory
requirements are given on pages
HR & Remuneration Committee (HRRC)
VQQHVJKU#PPWCN4GRQTV6JG
roles, responsibilities and composition Composition of Directors Areas of Oversight
of Board Sub-Committees are given Mr Madu Ratnayake > Review HR Policies including Remuneration Policy
below. (Chairman) > Promote Bank’s values and Code of Conduct
Mr Amal Cabraal > Review compliance with labour laws
Mrs Aruni Goonetilleke > Review HR processes including performance evaluation,
Mr Kithsiri Gunawardena remunerations, talent management, and succession planning
,i«ÀÌ,iviÀiViq«>}i£xÎ
Board Integrated Risk Management Committee (BIRMC)

Composition of Directors Areas of Oversight
Mr Rimoe Saldin (Chairman) > Establish a Comprehensive Risk Management Framework
Mr Jonathan Alles > Monitor and assess effectiveness of Bank’s risk management processes
Mr Madu Ratnayake > Review compliance with internal risk policy guidelines and relevant
Mr Rasitha Gunawardana regulatory including Basel III and SLFRS 9 implementations
Dr Prasad Samarasinghe
,i«ÀÌ,iviÀiViq«>}i£xn
Related Party Transactions Review Committee (RPTRC)

Mr Devaka Cooray (Chairman) > Review Related Party Transaction Policy
Mr Jonathan Alles > Scrutiny of Related Party Transactions
Mr Osman Chandrawansa > Market disclosures on Related Party Transactions
Mr Nihal Jayawardene PC > #XQKFCPEGQHEQPƃKEVQHKPVGTGUV
,i«ÀÌ,iviÀiViq«>}i£Èx

Voluntary Committees Delegation of Authority
Principle A.6
Strategy & Investment Review Committee (SIRC)
Daily management of the Bank and
implementation of the strategic plan has been
Mr Amal Cabraal (Chairman) > Review economic climate and capital market activities delegated to the Executive Management led
Mr Madu Ratnayake > Economic and monetary policy direction, emerging trends and by the MD/CEO.
Mrs Aruni Goonetilleke their potential/impact
> Investment Policy The MD/CEO is supported by the Corporate
Mr Kithsiri Gunawardena
> Review Bank’s investment portfolios and their performance Management Team (CMT) and Executive
Committees. The complementary skills and
diverse experience of the CMT strengthens
the Bank’s ability to deliver on strategy.
Procurement & Asset Disposal Committee (PADC)
Mr Rimoe Saldin (Chairman) > Procurement and Disposal Policy DELEGATION OF AUTHORITY (DOA)
FRAMEWORK
Mr Nihal Jayawardene PC > Approve procurements and disposal in line with delegation
Mr Rasitha Gunawardana Key Highlights
Dr Prasad Samarasinghe > Regular reporting on key matters
enables effective oversight by the
Board.
Board Credit Committee (BCC) > Management is open and transparent
Composition of Directors Areas of Oversight with the Board and escalates concerns
to its attention in the appropriate
Mrs Aruni Goonetilleke > Credit Policy and Lending Guidelines forums and in a timely manner.
(Chairperson) > Credit risk control measures including pricing of credit risk > The Board strives to create an
Mr Amal Cabraal > Performance of credit risk indicators effective balance between meeting
Mr Devaka Cooray > Formulate and periodically review the Credit Policy the Board’s oversight responsibilities
Mr Osman Chandrawansa > Authorize credit facilities over and above the delegated limits of and maintaining an entrepreneurial
Mr Nihal Jayawardene PC URGEKƂGFECVGIQTKGU environment in which management can
operate.
> 4QNGUCTGENGCTN[FGƂPGFD[OCPFCVGU
Board Recoveries Committee (BRC) & job descriptions and authority &
responsibilities are effectively exercised.
> 5VTCVGIKECNN[CNKIPGFƂPCPEKCNCPFPQP
Mr Amal Cabraal (Chairman) > Provide strategic direction for speedy recovery of defaulted ƂPCPEKCN-G[2GTHQTOCPEG+PFKECVQTU
Mrs Aruni Goonetilleke facilities (KPI) drive performance and the
Mr Nihal Jayawardene PC > Review the effectiveness of recovery initiatives deployed achievement of objectives.
Mr Rasitha Gunawardana > Ensure engagement of relevant stakeholders in the recovery > All functional departments are headed
process by competent individuals and are
> Recommend credit and recovery capability requirements to adequately resourced.
ensure effective management of NPA and recoveries
> Necessary systems, policies and
processes ensure all employees abide
by the Bank’s values and adhere to
Board Digital Banking Committee (BDBC) governance standards.
Composition of Directors Areas of Oversight > The Chief Internal Auditor reports
Mr Madu Ratnayake > Provide oversight to the timely and seamless implementation directly to the BAC, while the Chief
(Chairman) of Bank’s Digital Banking Platform/Layer including oversight on 4KUM1HƂEGTCPFVJG%JKGH%QORNKCPEG
related investment components and initiatives 1HƂEGTTGRQTVFKTGEVN[VQ$+4/%
Mr Jonathan Alles
> Creating a culture of prioritizing of customer engagement ensuring independence of these key
functions.
> DOA of the Board is reviewed
periodically to ensure limits are aligned
to the Bank’s evolving needs and
business context.

GOVERNANCE AND RISK
ETHICAL CONDUCT protected. The policy allows for two-

FOSTERING AND ETHICAL CULTURE
way communication, if required.
The Board is committed to create an
All the Bank employees are expected to
ethically conducive culture and set > There are multiple channels for uphold HNB’s values and are entrenched
the tone from the top. The Board reporting and whilst blowing matters across the Bank through following
lead by demonstrating responsibility are handled by an Independent Non- mechanisms.
and commitment to HNB values. The Executive Director.
management is accountable for the > Recruitment
implementation of the ethical framework. > 6JGTGYGTGPQUKIPKƂECPVKPEKFGPVU > Training
during the year, raised through the > Performance Review
Code of Conduct & Ethics whistle blowing mechanism.
> Consequence Management/
Principle D.5 Disciplinary actions
%QPƃKEVQH+PVGTGUV
All employees are bound by the Code of
Principles A.1.6, A.10
Conduct & Ethics, encompassed in the
Employee Handbook. The Code, which Directors are required to declare any
is accessible on the intranet, provides RGTUQPCNƂPCPEKCNKPVGTGUVUVJCVRQUGC
guidelines on the conduct of the Bank’s EQPƃKEVQHKPVGTGUVCVVJGCRRQKPVOGPV HNB CODE OF CONDUCT & ETHICS
businesses & operations and is aligned and quarterly thereafter. It is a standing
> Act ethically, responsibly, honestly
to HNB’s values, standards, policies and agenda item at every Board meeting. Where
and with integrity, in the best
procedures. Directors abide by a ‘Standard EQPƃKEVUQHKPVGTGUVOC[GZKUV&KTGEVQTUCTG
interests of the Bank
of Conduct’ embodied in the Board Charter. expected to excuse themselves from the
meetings. > Safeguard the Bank from frauds,
All HNB employees receive training on corruptions, collusions and
compliance with the Code, as part of their The Related Party Transactions Review coercions
induction process and during regular Committee (RPTRC) reviews and provides > Compliance with laws, rules and
refresher courses. oversight over related party transactions to regulations
ensure transactions are fair and in the best
> #XQKFCPEGQHEQPƃKEVQHKPVGTGUV
Whistle Blowing interests of HNB. The Committee is guided
by the Bank’s Related Party Transactions > Discrimination and harassment
> All employees are responsible to ensure
VJGKTDGJCXKQWTTGƃGEVKPIVJG$CPMoU Policy and applicable regulations. > Bribery and corruption
values, Code of Ethics & Conduct, > %QPƂFGPVKCNKV[
Key appointments of the Directors are
and commitment to respect human > Fair dealing
KPENWFGFKPVJGKTRTQƂNGUQPRCIGUVQ
rights. Any employee who believes
and Related Party Transactions are disclosed > Entertainment and gifts
there has been a contravention of this
in note 60 of the Financial Statements on > Accurate accounting and record
commitment, is encouraged to report
pages 422 to 428. The total number of Board keeping
under the provisions of the Bank’s
seats (excluding directorship in HNB) held
Whistle Blowing Policy. > Fair and transparent procurement
D[GCEJ&KTGEVQTCUQHUV&GEGODGT
practices
> #NNTGRQTVUCTGVTGCVGFCUEQPƂFGPVKCN in the following page.
> Protection and proper use of Bank’s
and whistle blowers’ identity is
assets including information assets
> Encourage whistle blowing
The Board is aware of > Corporate opportunities
other commitments of its
ÀiVÌÀÃ>`ÃÃ>ÌÃwi`
that all Directors allocate
ÃÕvwViÌÌi>`>ÌÌiÌ
to enable them to discharge
their responsibilities at HNB
effectively.
Principle A.1.6

Name of Director Directorship No. of Board Seats held in No. of Board seats held in Diversity and equal opportunity
Status Listed Companies Unlisted Companies The Bank appreciates the positive impact
Executive Non- Executive Non- on productivity and creativity that diverse
Capacity Executive Capacity Executive perspectives lend. HNB is an equal
Capacity Capacity opportunity employer, and is committed
Mrs Aruni Goonetilleke - 2 - 2 towards creating a healthy working
Mr Jonathan Alles - - - environment that enables employees to
Mr Amal Cabraal - 4 - 12 work without fear of prejudice, gender bias
Mr Madu Ratnayake - 1 2 or any form of harassment.
Mr Dilshan Rodrigo - 2 -
Mr Devaka Cooray - 1 8 Gender Representation
Mr Osman Chandrawansa - - - The Bank remains committed to promote
Mr Rimoe Saldin - 2 10 gender representation across the Bank.
Mr Nihal Jayawardene PC - - - Family friendly workplace practices support
Mr Rasitha Gunawardana - - - employees, who are also caregivers,
Mr Kithsiri Gunawardena - 1 - 18 in creating a balance between their
Dr Prasad Samarasinghe - 2 4 5 professional and family priorities.
Independent Non-Executive Director Executive Director Non-Executive Director Fair & Responsible Remuneration
Anti-Bribery and Corruption (ABC) Employee awareness of the policy Principles B.1, B.2
‘HNB’s ABC Policy approved and endorsed is reinforced through structured

communication and training programs. The Remuneration Policy and Procedure
by the Board declares that, corrupt practices
are not acceptable in any business dealings policy is reviewed regularly and updated. HNB’s Remuneration Policy seeks to offer
of the Bank. internally equitable yet market competitive
Respecting Human Rights, Diversity & remuneration that attracts, retains and
ABC management is embedded in our Gender Equality motivates high-performing employees. The
compliance monitoring programme and policy seeks to promote desired behaviours
We are committed to implementing
TGXKGYGFD[VJG$CPMoU%QORNKCPEG1HƂEGT and conduct from employees and the
internationally agreed principles on
and concerns are escalated to the BIRMC / creation of stakeholder value, responsibly
human rights as described in our Human
Board, if any. The policy is further supported and sustainably.
Rights Policy. The Bank promotes fair
through internal control systems and representation, equal opportunity and a safe
procedures, which are vulnerable to bribery As delegated by the Board, the HRRC,
workplace, amongst others. has been mandated to review and make
and corruption risks.
decisions on the Remuneration Policy and
its implementation. The Committee consists
KEY PROVISIONS OF THE ABC POLICY
1 2 3 4 5
Strictly prohibits Provides means Requires books and
Requires all 2TQXKFGUFGƂPKVKQPQH
to offer or accept
employees to fully thresholds for what and mechanisms for records of the Bank
bribes, facilitation
comply with all is an acceptable gift raising complaints, be kept accurately
payments, kickbacks,
applicable laws and as well as procedures including whistle and clear, detailed
political contributions,
regulations including, unacceptable and reporting blowing and timely
anti-corruption laws gifts, hospitality or requirements
expenses of any kind,
when carrying out
Bank’s transactions
and business dealings
either directly or
indirectly

GOVERNANCE AND RISK
majority of Independent Non-Executive Remuneration Disclosures

Directors and meets on a quarterly basis. “The Directors of HNB shall
4GHGTRCIGHQTFGVCKNUQHVJG
Where relevant and required, the HRRC will remunerations paid to Directors of the Bank. at all times discharge their
make recommendations to the Board for its
EQPUKFGTCVKQPCPFƂPCNCRRTQXCN
duties professionally with
Taxation
`Õi`}iVi]ivwViVÞ>`
HNB is committed to being a responsible
Remuneration Level and Makeup
taxpayer that pays its fair share of tax within to the best of their abilities.
Employees are incentivised through industry norms. The Board determines the All Directors shall have a
a variable pay component tied to the Bank’s tax philosophy and approach along
CEJKGXGOGPVQHƂPCPEKCNCPFPQPƂPCPEKCN with the BAC and provides oversight of the
sound understanding of the
performance targets aligned to HNB’s Bank’s tax practices and affairs. Bank.”
strategic objectives. The HRRC evaluates
the performance of the Executive
APPRAISAL OF THE MD/CEO Board Charter
Directors and KMP periodically and makes
recommendations regarding remuneration. Principle A.11
Fixed and variable components of the
remunerations are regularly reviewed The performance of the MD/CEO is
to ensure adequacy and market assessed annually using criteria aligned
competitiveness. to the short, medium and long-term
objectives of the Bank which are agreed
MD/CEO participates when deciding the with the MD/CEO at the beginning of the
remuneration of the Corporate Management year. The appraisal is discussed by the
team. Chairperson with MD/CEO and responses
are documented prior to the approval by the
The Board, as a whole, determines the Board.
remuneration of the Non-Executive Directors
YJQTGEGKXGCƂZGFHGGHQTDGKPIVJG
Chairperson or a Director of the Board and
an additional fee for being a member of a
Sub-Committee. Independent professional
advice is sought when required to determine
market positioning and salary levels.
Our policies seek to harness the full The desired outcomes of the Bank’s
potential of all our employees by Remuneration Policy include;
providing equal opportunity and a safe
> Attracting, motivating, rewarding
environment, in the workplace.
and retaining talent
> Equality and Diversity Policy > Promoting the achievement of
> Employee Recognition and Rewards strategic objectives within the Bank’s
Policy risk appetite
> Anti-Harassment Policy > Promoting core values and an
ethical culture
> Grievance Handling Policy
> Enhancing internal fairness through
> Management and Resolution of consistent remuneration decision-
Complaints Policy making
> Human Rights Policy > Appropriate and responsible
> Health & Safety Policy remuneration decisions
> Code of Conduct & Ethics

Committee assists in the discharge of duties
with regards to internal controls, supported INFORMATION SECURITY
by the Internal Audit Department. Details POLICY STATEMENT
of the internal audit function and systems of
It is the policy of Hatton National Bank
internal control are explained in the Board
PLC that;
Audit Committee Report, given on page
6JG$QCTFKUUCVKUƂGFYKVJVJGKPVGITKV[ > its information assets shall be
QHƂPCPEKCNKPHQTOCVKQPCPFVJGTQDWUVPGUU RTQVGEVGFHTQOCNNVJTGCVUKFGPVKƂGF
of the internal controls and systems of the whether internal or external,
Bank. advertent, or inadvertent, such that
the brand is protected
RISK GOVERNANCE INFORMATION TECHNOLOGY > EQPƂFGPVKCNKV[QHKPHQTOCVKQPKU
GOVERNANCE maintained
Principle D.2 > integrity of information can be
Principle G.1, G.2, G.3, G.4, G.5
relied upon
RISK MANAGEMENT 6JG$QCTFCRRTGEKCVGUVJGDGPGƂVUQH
> availability of information is ensured
GHƂEKGPE[UECNCDKNKV[CPFKPPQXCVKQPVJCV
The Board has ultimate responsibility for risk > and all legal, regulatory, statutory,
digital platforms provide and ensures
management, agreeing on the nature and and contractual obligations are met.
implementation of an effective and properly
extent of opportunities and associated risks
resourced digital technology strategy. The
that the Bank is willing to take in pursuit of
$QCTFOQPKVQTUCPFGXCNWCVGUUKIPKƂECPV+6
strategic objectives.
investment and expenditure. Our holistic security
Responsibility to provide independent
oversight of the adequacy and effectiveness
The Board Digital Banking Committee programme is aligned to
provides oversight in the implementation
of the Bank’s Risk Management Framework international best practice and
of the digital strategy, and delivery of
(RMF) has been delegated to the BIRMC. standards.
solutions that enhance client and employee
Our robust framework enables the Bank to
experiences. The appointment of Dr Prasad
identify, measure, manage and monitor risks
Samarasinghe as a NED to the Board this
We will ensure our information
and risk appetite to assist in ensuring capital
year, has served to enhance the Board’s skills systems are secured by
adequacy and sustainability.
base and knowledge of technology and
complying with;
The RMF covers the three lines of defence, information governance.
GPUWTKPIUKIPKƂECPVOCVVGTUCTGVKOGQWUN[ > The National Institute of
During the year, two Sub-Committees
and effectively escalated to the appropriate
were created within the Digital Banking Standards and Technology
levels of authority for action. The Risk
Department and several executive level
Committee, to review and expedite the (NIST) Cybersecurity
delivery of digital banking solutions for the
committees support the BIRMC in the
Retail and Wholesale markets respectively. framework;
implementation of the RMF.
The accelerated launch of the products
During the year, the Board and BIRMC enabled the Bank to secure a competitive > ISO/IEC 27001 Information
increased the rigour of their oversight edge in the digital market space. Security Management
functions to effectively manage risk. System Standard; and
Information and Cybersecurity
Refer the BIRMC report on page 158 and the The challenging economic environment
Risk & Capital Review on page 176 for more and the complexity of increasing digital
> Baseline security guidelines
information. CEVKXKVKGUJCXGNGFVQCUKIPKƂECPVGUECNCVKQP issued by Central Bank of
KPƂPCPEKCNETKOGU*0$KUEQOOKVVGF
Sri Lanka.
INTERNAL CONTROLS VQRTQVGEVVJGEQPƂFGPVKCNKV[KPVGITKV[
and availability of the Bank’s information
Combined with Risk management, the
assets and customer data, by continuously items on the monthly Board and BIRMC
Board formulates and implements effective
investing in advanced security controls to meetings.
internal control systems to safeguard
detect and respond to the latest threats
shareholder interests and assets of the Bank. Refer Risk & Capital Review on page 176
effectively.
These systems cover all controls, including for more information on management of
ƂPCPEKCNQRGTCVKQPCNCPFEQORNKCPEGCPF Information technology & security Information Security & Cyber-risk.
are monitored and regularly reviewed for governance and cyber risk are recurring
effectiveness by the Board. The Board Audit

GOVERNANCE AND RISK
COMPLIANCE GOVERNANCE
GOVERNANCE OF TECHNOLOGY ANTI-MONEY-LAUNDERING,
AND INFORMATION RISK Principle A.1.3 COMBATING THE FINANCING OF
TERRORISM AND SANCTIONS (AML/CFT)
5RGEKƂETGURQPUKDKNKVKGUJCXGDGGP The Board is conscious of its duty to comply
with laws & regulations, internal procedures The Central Bank of Sri Lanka (CBSL)
assigned to committees at Board
and policies of the Bank. Internal controls continued its intensive surveillance
and Executive level. Key concerns are
escalated to the Board. have been placed to provide reasonable QPƂPCPEKCNETKOGHQEWUGFQP#/.
assurance of compliance, including CFT activities. The Bank remained extra
The Board – Ensures the alignment establishment of a compliance function, vigilant, expanding the scope and rigour
of technology and information JGCFGFD[CFGFKECVGF%QORNKCPEG1HƂEGT of processes to enhance adequacy,
management to the strategic who directly reports to the BIRMC. effectiveness, and oversight of the control
objectives of the Bank. environment and to comply with regulations.
A culture of compliance is encouraged
BIRMC – Provides governance and across the organisation through Bank’s
oversight on all matters relating to communications and internal audit reviews.
information risk, including data privacy
and information systems. GOVERNANCE OF GROUP
The regulatory and policy landscape
COMPANIES
BACs4GXKGYUVJGCFGSWCE[GHƂEKGPE[ became a challenge and continue to evolve
at an accelerated rate, following GoSL The Board seeks to establish a common
and effectiveness of the Bank’s
and CBSL actions to manage the nation’s standard of Corporate Governance across
information technology systems.
economy. subsidiaries and is guided by the Board
Monitors the implementation of the
approved Charter for Management on Good
recommendations in internal audit
Assurance Governance for Group Companies.
reports.
The Board ensures that assurance services Alignment of governance practices and

ivvÀ>Ì-iVÕÀÌÞ"vwViÀ
and functions enable an effective control processes is reinforced by the appointment
(CISO) – Creates and executes the
environment, that support the integrity of Bank Directors and/or Corporate
information and cyber security strategy
of information for decision making and Management members to the Boards of
and programmes.
reporting requirements. The Board subsidiaries.
The Information Security Committee Audit Committee (BAC), on behalf of the
(ISC) – Established under Central Board, reviews the plans and reports of
Bank of Sri Lanka (CBSL) guidelines, is both external and internal auditors and
charged with oversight responsibilities coordinate activities to adopt a combined
for information security and cyber risk assurance model.
management. The ISC meets monthly,
and minutes are submitted for the Refer the Directors’ Statement on Internal
review of the Board, through the Control on page 167 and External Auditor’s
BIRMC. Assurance Report on page 169 for more
information.
Security Operating Centre (SOC)
– Strengthens the cyber security
surveillance and incident response
process.

Annual Report and Interim Financials
The Annual Report is the key medium Shareholders and investors are
through which the Board presents a fair and engaged through multiple channels
DCNCPEGFTGXKGYQHVJGQHVJG$CPMoUƂPCPEKCN of communication, including the
position, performance and prospects following;
combining narrative and visual elements to > Annual General Meeting (AGM)
facilitate readability and comprehension. > Quarterly Investor Forums
External audit/ third-party assurance has
> Annual Integrated Report
been obtained where relevant, to enhance
credibility. The Board of Directors review > Interim Financial Statements
and approve the Annual Report, prior to > A dedicated investor relations page
FINANCIAL GOVERNANCE publication while the Interim Financials are on the Bank’s website
reviewed and recommended by the Board > 0QVKƂECVKQPQHMG[GXGPVUVJTQWIJ
Principles C.1, C.2, D.1, E,F Audit Committee and approved by the announcements in the CSE
Board of Directors, prior to publication.
The high standard of reporting maintained > Structured meetings held by
As a trusted corporate leader committed Chairperson, MD/CEO and other
by the Bank is evidenced by the awards
to high standards of business integrity and senior management, with key
received over an extended period.
ethics, being accountable and responsible, institutional investors, on a needs
to all stakeholders is a priority. The Board basis. Views of the shareholders are
ensures accountability through robust STAKEHOLDER ENGAGEMENT communicated to the Board as a
disclosure practices, striving for open, The Board continuously monitors the Bank’s whole by the Chairman
transparent and reliable communication with relationship with its stakeholders and also > Shareholders can also query the
both internal and external stakeholders. The engages directly with employees, clients, Board Management of the Bank,
Annual Report and the AGM are key forums regulators and shareholders from time to through representations made to
for external communication of the Bank’s time. the Company Secretary
performance during the year.
In 2022, the focus on the needs and
expectations of stakeholders remained
REPORTING AND DISCLOSURE Refer page 107 for further information on
elevated, given the impact of the on-going
HNB is committed to fair and transparent stakeholder engagement processes and
economic crisis. Close engagement with all
reporting with emphasis on integrity, outcomes, during the year.
stakeholder groups was key to address their
timeliness and relevance of information EQPEGTPUCPFDWKNFKPIVTWUVCPFEQPƂFGPEG
disclosed. Information is presented in such in the Bank.
a manner as to avoid the creation of a false
market. Such disclosure and reporting
enable stakeholders to effectively assess ENGAGING WITH OUR KEY STAKEHOLDERS
performance and take informed decisions.
Employees > Open Door Policy > Engagement Surveys
The Bank’s Corporate Communication > Chief Employee Experience > Grievance mechanism
Policy provides guidelines to ensure all 1HƂEGT > Managers conference
communications to key stakeholders are > CEO Newsletter
coherent and cohesive. Covering internal Clients > Centralized dedicated > Call Centre
and external communication, the policy has unit headed by Customer > Relationship managers
been communicated to all staff members 'ZRGTKGPEG1HƂEGT > Complaints
and sets out formal areas of responsibility. > Social media
The Corporate Communication Policy was
Regulators > Periodic CEO meetings > Meetings / discussions
revised in 2021.
> Formal reporting > Feedback on draft papers and
All reporting and disclosures are in regulations
compliance with applicable laws and Shareholders/ > AGM > Mechanism to raise queries
regulations. investors > Quarterly Investor forums through the Company Secretary
> Webinars
> CSE announcements

GOVERNANCE AND RISK
CONSTRUCTIVE USE OF ANNUAL

GENERAL MEETING (AGM)
The AGM is the main mechanism for the
73%
Board to interact with and account to of shareholders
shareholders and provides an opportunity representation
for shareholders’ views to be heard. The at 53rd AGM
Chairperson, Board members particularly
Chairperson/Chairman of Board Sub-
Committees, MD/CEO, key management
personnel and External Auditors, are present
and available to answer questions.
PRIOR TO THE AGM AT THE AGM AFTER THE AGM
> Notice of the AGM and other related > The Board provides an update on the > Details of key resolutions passed are
documents including the Annual Bank’s performance. informed to the CSE and posted on
Report, proposed resolutions, > Shareholders have the opportunity to the Bank website, within 24 hours of
voting procedures, are circulated to ask questions and clarify matters. the AGM.
shareholders within minimum 15 days > Minutes of the meeting are available
> A separate resolution is proposed for
prior to the AGM. to shareholders on request from the
each item of business.
> +VCNNQYUUWHƂEKGPVVKOGHQTCNNVJG %QORCP[5GETGVCT[oUQHƂEG
> All shareholders are encouraged to
shareholders to attend the AGM.
exercise their voting rights.
> The Bank has a mechanism to record
and count all proxy votes lodged for
each resolution.
AGM 2022
> In response to the COVID 19 pandemic restrictions prevalent in March 2022, the AGM
2022 was conducted in a hybrid format for the third time, at a physical location as well
as via an extended teleconference facility.
> All shareholders, including those connected electronically, were given the opportunity
to submit any question to the Board / Management in real time.
> Voting was concluded on a show of hand by those physically present, while
shareholders participating via electronic platform were able to vote by means of MS
Teams.
Mode of Participation No. of No. of Shares % of Shareholding

Shareholders Presented
In Person 60 285,770 0.07%

By Proxy 52 72.90%
Total Represented 72.97%

Embedding EES considerations
We are conscious of our role as a Bank in addressing climate change and driving sustainable
socioeconomic development. HNB has a proven track record in leading change, providing
capital where it is needed most. The numerous awards received by the Bank, in recognition of
our role as a responsible corporate citizen, is an endorsement of our efforts.
Integration of EES impacts into strategy, risks and opportunities in creating value across the
various capitals, is reported in the Capital Reports given below.
ESC Consideration Subject of the Report Report References

Economic Sustainability Financial Capital Pages 45 to 51
SUSTAINABILITY GOVERNANCE Environment Sustainability Natural Capital Pages 74 to 79
Labour Practices Human Capital Pages 56 to 62
Principle H.1
Social Sustainability Social and Relationship Capital 2CIGUVQ
Sustainability Development Goals An Integrated Strategy 2CIGUVQ
STRATEGY AND INTEGRATION OF EES
Our strategy is shaped by stakeholder Board
expectations. The Board adopts a structured The Board has ultimate responsibility for managing risks and opportunities arising from EES
and systematic approach to strategy impacts including climate changes and socio- economic development.
formulation, identifying and managing the
Bank’s Economic, Environmental and Social BIRMC
(EES) impacts and addressing the material The Board has delegated the authority to assesses EES related risks & opportunities and to
interests of our priority stakeholders. The take appropriate strategic action. BIRMC makes recommendations to the Board and other
Sustainability strategy is integrated with Board Sub Committees on managing EES related risks and opportunities, including climate
HNB’s Corporate Strategy and is aligned to risk and credit risk.
the Sustainable Development Goals.
> Environmental and socioeconomic
concerns have heightened due to the
The annual strategy review for the year 2023, was conducted by the
pandemic.
Board in 2022, in consultation with the Board Strategy & Investment
> Banks in particular, have been called
upon globally, to adopt a greater role in Review Committee (SIRC) and Corporate Management Team.
promoting the transition to sustainable The Board considered the Bank’s operating environment, risks and
development.
opportunities in approving the Bank’s business plan and setting
> The CBSL Direction No 05 of 2022 on revised short, medium and long term targets.
Sustainable Finance Activities of Licensed
Banks seeks to facilitate a sustainable
economy and promote the sustainable
ƂPCPEGRTCEVKEGUQH.KEGPUGF$CPMU
in Sri Lanka, which is in line with 2019
Sustainable Finance Road Map of CBSL.

GOVERNANCE AND RISK
Sustainability Foundation Strengthening Sustainability Governance in

The Sustainability Foundation functions 2022
as the monitoring body for corporate
> Revised Board Charter to include
sustainability of HNB.
oversight of Sustainability Management.
> Trustees to the Foundation include
> Drafted the Terms of Reference (TOR)
one (1) Non-Executive Director, two (2)
to formulate the Board Sustainability
Executive Directors, CHRO and other
%QOOKVVGGVQDGƂPCNKUGFKPGCTN[
5GPKQT1HƂEKCNUQHVJG$CPM/&%'1
acts as the Chairman of the Foundation. > &TCHVGFCPFƂPCNKUGFVJG$CPMoU
Sustainability Policy by expanding
> The Foundation meets every two
the Green Pledge, which has been in
months and monitors the CSR and ESMS
place since 2009. The policy is to be
activities. The Sustainability dashboard,
adopted in conjunction with the existing
YJKEJTGƃGEVMG[''5RGTHQTOCPEG
Environmental and Social policy and will
indicators, is reviewed at the meeting.
DGCRRTQXGFD[VJG$QCTFKPGCTN[
> The Monthly Dashboard is presented
> Continued to integrate EES metrics into
to the Board and critical concerns are
HNB’s Key Performance Indicators in
escalated by the foundation’s Chairman,
2022.
if any.
CHRO who overlooks the sustainability
function is supported by Executive
Sustainability. This pillar is responsible for
implementing social sustainability including
customers, employees, suppliers and
communities etc, while green lending is
driven by the business lines.

COMPLIANCE WITH BANKING ACT DIRECTION NO.11 OF 2007 ON CORPORATE GOVERNANCE
SECTION PRINCIPLE, COMPLIANCE & IMPLEMENTATION
3 (1) Responsibilities of the Board

K Strengthening the Safety and Soundness of the Bank
The Board’s responsibilities are set out in the Board Charter. The Board is accountable for the management of the affairs of
the Bank and the safety and soundness of the Bank.
a. Setting Strategic Objectives and Corporate Values - Complied
The Bank’s strategic objectives derived from the Vision and Mission Statements and its corporate values, have been
determined and approved by the Board of Directors and communicated to all levels of staff through multiple channels.
The corporate values are included in the Code of Conduct & Ethics which is provided in hard copy to all new employees is
available on the intranet, explained at orientation programmes.
b. Approving Overall Business Strategy including Risk Policy and Management - Complied
6JGDWUKPGUUUVTCVGI[
%QTRQTCVG5VTCVGIKE2NCPVQIGVJGTYKVJVJGRTQLGEVKQPUEQXGTKPIYCUCRRTQXGFD[VJG
Board in 2022. The strategy and execution thereof, is regularly reviewed by the Board. The Annual budget, derived from the
business strategy is approved after discussing in detail with the corporate management and monitored periodically, by the
Board.
The Board also approved the overall risk strategy of the Bank, determining the Risk Appetite, Policies and Risk Management
Framework & Mechanisms. The Corporate Strategic Plan is aligned to the overall risk strategy of the Bank, where Risk
Appetite is considered in areas such as capital allocation and in the adoption of risk matrix to measure the risk levels.
Governance and Compliance which are embedded in the Risk Management Policy Framework have also been included in
the strategic plan. Further, the risk management procedures and mechanisms with time bound implementation milestones
were approved and monitored by the Board Integrated Risk Management Committee (BIRMC) on a regular basis.
c. Risk Management - Complied
The Board takes overall responsibility for risk management of the Bank. The BIRMC, is tasked with assisting the Board
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implementing process to measure, monitor and manage the risks.
The following reports provide further insights in this regard:
> Risk & Capital Review on page 176.
> Board Integrated Risk Management Committee Report on page 158.
d. Communication with all Stakeholders - Complied
The Board has approved a Corporate Communication Policy to ensure effective and timely communication with all
stakeholders including depositors, creditors, shareholders and borrowers. The Corporate Communication Policy, which was
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+PXGUVQTHQTWOUCPF#)/UCTGWUGFVQEQOOWPKECVGYKVJUVCMGJQNFGTUKPCFFKVKQPVQTGURQPFKPIVQURGEKƂEKPXGUVQTSWGTKGU
Shareholder engagement is described on page 121.
The Bank has substantially implemented the provisions of Banking Act Direction No. 8 of 2011 “Customer Charter of
Licensed Banks”, which became effective in 2012. The Charter seeks to improve the quality and content in dispensing of
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customer obligations generated in the interests of Bank’s stability.
e. Internal Control System and Management Information Systems - Complied
The Board reviews the adequacy and the integrity of the Bank’s Internal Control Systems and Management Information
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$#%6JG$#%JCUTGXKGYGFTGRQTVUHTQO
the Internal Audit Department in carrying out this function, together with the Management responses on the same. The
minutes of the BAC meetings are tabled for the information of the Board on a Periodic basis.

GOVERNANCE AND RISK
f. Key Management Personnel (KMP) - Complied

-/2CTGFGƂPGFKPVJG5TK.CPMC#EEQWPVKPI5VCPFCTFs.-#5QPp4GNCVGF2CTV[&KUENQUWTGUqCUVJGRGTUQPUYJQ
UKIPKƂECPVN[KPƃWGPEGRQNKE[FKTGEVCEVKXKVKGUCPFGZGTEKUGEQPVTQNQXGTDWUKPGUUCEVKXKVKGUQRGTCVKQPUCPFTKUMOCPCIGOGPV
All appointments of designated KMP are recommended by the Nomination Committee and approved by the Board.
(QTVJGƂPCPEKCNTGRQTVKPIRWTRQUGU6JG$QCTFQH&KTGEVQTUKUEQPUKFGTGFCU-/2QHVJG$CPM
For Corporate Governance reporting and monitoring purposes, Key Management Personnel comprise the Corporate
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Services as per the guideline of “Key Management Personnel in Banking Act Direction for Corporate Governance” issued
by the Banking Supervision Department of CBSL. All appointments of Key Management Personnel are recommended by the
Nomination Committee and approved by the Board.
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Areas of authority and key responsibilities for the Board of Directors are set out in the Board Charter. Areas of authority and
key responsibilities for Key Management Personnel are stated in their job descriptions as recommended by the Nomination
Committee and approved by the Board. The delegated authority limits for Key Management Personnel have been approved
by the Board.
h. Oversight of affairs of the Bank by Key Management Personnel - Complied
6JG/&%'1CPFQVJGT-G[/CPCIGOGPV2GTUQPPGNCTGCEEQWPVCDNGVQVJG$QCTFHQTVJG$CPMoUQRGTCVKQPCNCPFƂPCPEKCN
performance, in accordance with the policies set by the Board. The Board reviews the performance of the Bank against
the strategic plan and receives reports from its Sub-Committees on matters delegated to them. Further, Key Management
Personnel make regular presentations to the Board on matters under their purview and are also called in to explain matters
relating to their areas.
i. Assess effectiveness of own Governance Practices - Complied
The effectiveness of the Board’s own governance practices, including the process for selection, nomination and election of
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KZCPFVJGRTQEGUUHQTOCPCIGOGPVQHEQPƃKEVQHKPVGTGUV
YJKEJKU
GZRNCKPGFKPFGVCKNWPFGT4WNG

ZKKCTGTGXKGYGFD[$QCTFQPCRGTKQFKEDCUKU+ORNGOGPVCVKQPQHEJCPIGUTGSWKTGFKU
discussed and determined by the Board at year-end, following the submission of the summary of annual self-evaluations of
the Board and Board Sub Committees.
j. Succession plan for Key Management Personnel - Complied
The Bank has an appropriate succession plan for Key Management Personnel aligned to the Bank’s strategic objectives and
Talent Management Programme. The plan is guided by the policy on Succession Planning for Key Management Personnel
and Directors, last reviewed in 2020. The Nomination Committee is responsible for the formulation, review and rollout of the
plan.
k. Regular Meetings with Key Management Personnel - Complied
The Board maintains a sound relationship with the Corporate/Senior Management led by MD/CEO, who in turn assists
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EQTRQTCVGQDLGEVKXGU6JG/CPCIGOGPVKUQRGPCPFVTCPURCTGPVYKVJVJG$QCTFDTKPIKPICNNUKIPKƂECPVOCVVGTUVQKVU
attention. Key Management Personnel are regularly invited to attend Board and Sub-Committee meetings for discussion on
matters concerning their areas of responsibility or make presentations on key agenda items.
l. Regulatory environment and maintaining an effective relationship with regulator - Complied
On appointment, Directors are provided with a folder containing all relevant governance information, including regulatory
laws, directions and guidelines. Directors are briefed about regulatory developments at Board and Sub-Committee meetings
by Key Management Personnel including the Heads of Internal Audit, Risk and Compliance and by attending Director
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FKUEWUUUVTCVGIKEOCVVGTUURGEKƂEVQVJG$CPMOCKPVCKPKPICPGHHGEVKXGTGNCVKQPUJKRYKVJVJGTGIWNCVQT

m. Hiring and Oversight of External Auditors - Complied

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KXQHVJG#TVKENGUQH#UUQEKCVKQP6JG
Board Audit Committee makes recommendations to the Board for the appointment, re-appointment or removal of the
External Auditor in-line with professional & ethical standards and regulatory requirements. In addition, the Board has
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policy for Engagement of the External Auditor to provide Non-Audit Services is in place, as reviewed and recommended by
the Board Audit Committee.
On the recommendation of the Board, the shareholders approved the reappointment of Messrs. KPMG as the External
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#WFKVQTUUWDOKVCUVCVGOGPVCPPWCNN[EQPƂTOKPIVJGKTKPFGRGPFGPEGKPTGNCVKQPVQVJG'ZVGTPCN#WFKV

KK č««ÌiÌv
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The Board has appointed the Chairman and the MD/CEO. Their roles and responsibilities are set out clearly and separately
in the Board Charter, ensuring a balance of power and authority and preventing unfettered power being vested with an
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QHUCKF&KTGEVKQP

KKK Regular Board Meetings - Complied
Monthly Board meetings are held regularly, and special meetings are scheduled based on need. Fourteen (14) Board
meetings were held in 2022, out of which twelve (12) meetings were conducted with extended teleconferencing. Directors
actively participate in the meetings deliberating on matters set before the Board. Attendance at Board meetings is given on
page 111. Urgent Board Papers are approved via circular resolution only on an exceptional basis, where such resolutions are
TCVKƂGFD[VJG$QCTFCVVJGPGZVOGGVKPI4GUQNWVKQPUCPFETGFKVRCRGTUYGTGCRRTQXGFKPXKCEKTEWNCVKQP

KX Arrangements for Directors to include proposals in the agenda - Complied
The Board Calendar with tentative dates for Board and Sub-Committee meetings for the following year is sent to all
members approximately one month before the end of the current year. The Chairperson sets the Board Agenda assisted by
the Company Secretary. Directors submit proposals for inclusion in the agenda up on discussion with the Chairperson.

X Notice of Meetings - Complied
Notice of meetings, Agenda and Board Papers for the meetings are sent generally seven (7) days before the meeting,
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exceptional basis, with the consent of the Chairperson.

XK Director’s Attendance - Complied
At appointment, all Directors are apprised of the regulations on attendance in accordance with the Banking Act Direction
0QQH#VVGPFCPEGCV$QCTFOGGVKPIUKUIKXGPQPRCIG#NN&KTGEVQTUJCXGCVVGPFGFCVNGCUVVYQVJKTFU
QH
Board meetings held during 2022, the lowest attendance being nine (9) Directors at a Meeting (including attendance of an
#NVGTPCVG&KTGEVQT0Q&KTGEVQTJCUDGGPCDUGPVHTQOVJTGG
EQPUGEWVKXGOGGVKPIUFWTKPI

XKK Appointment and setting responsibilities of the Company Secretary - Complied
6JG$QCTFJCUCRRQKPVGFC%QORCP[5GETGVCT[CP#VVQTPG[CV.CYYJQUCVKUƂGUVJGRTQXKUKQPUQH5GEVKQPQHVJG$CPMKPI
#EV0QQH6JG%QORCP[5GETGVCT[IWKFGUVJG$QCTFQPFKUEJCTIKPIKVUFWVKGUCPFTGURQPUKDKNKVKGUHCEKNKVCVGU
adherence to best practices in Corporate Governance and apprises the Board of relevant legislative and regulatory changes.

XKKK Directors access to advice and services of Company Secretary - Complied
All Board members have full access, to advice and services of the Company Secretary to ensure that proper Board
procedures are followed and all applicable rules and regulations are complied with.

KZ Maintenance of Board Minutes - Complied
Company Secretary maintains the minutes of the Board meetings. The Minutes are reviewed by the Chairperson and are
circulated to all Board members and approved at the next Board Meeting upon incorporating any amendments proposed
by other Directors. The minute book is maintained by the Company Secretary and open for inspection by any Director.

GOVERNANCE AND RISK

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in performing its duties and to serve as a reference for regulatory and supervisory authorities to assess the depth of
deliberations at Board meetings.

ZK Directors ability to seek independent professional advice - Complied
Procedures are in place to allow Directors to seek independent professional advice, as and when necessary and at the Bank’s
expense, in discharging their duties and responsibilities. This facility is coordinated through the Company Secretary.

ZKK i>}ÜÌ
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Article 40 of Articles of Association addresses the provision with regard to this requirement. The Board is conscious of its
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other interests.
6JG$QCTFJCUVCMGPUVGRUVQGPUWTGVJCVEQPƃKEVUCPFRQVGPVKCNEQPƃKEVUQHKPVGTGUVQH&KTGEVQTUCTGFKUENQUGFVQVJG$QCTF
Any Director with a material personal interests in a matter being considered by the Board, declares his/her interests unless
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declare their interests at appointment and thereafter on a quarterly basis.

ZKKK Formal schedule of matters for decision making - Complied
The Board reserves for itself a formal schedule of matters on which it takes the ultimate decision.

ZKX Inform Central Bank, if there are solvency issues - Complied
The Bank is solvent and no situations have arisen to challenge its solvency.
In the unlikely event, the Bank is about to become insolvent, a procedure is however in place to inform the Director of
Banking Supervision of same, prior to taking any decision or action to suspend payments due to depositors and other
creditors.

ZX Capital Adequacy - Complied
The Board monitors capital adequacy and other prudential measures to manage risk and to ensure compliance with
regulatory requirements. The Bank is in compliance with the minimum capital requirements of the Monetary Board.

ZXK Publish Corporate Governance Report in Annual Report - Complied
6JKUTGRQTVHQTOURCTVQHVJG%QTRQTCVG)QXGTPCPEG4GRQTVQHVJG$CPMYJKEJKUUGVQWVQPRCIGUVQ

ZXKK Self-Assessment of Directors - Complied
Each Director undertakes a self-assessment of the Board annually, to ensure responsibilities are satisfactorily discharged. The
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CRRTCKUCNKUEWTTGPVN[KPRTQITGUU(WTVJGTGCEJ&KTGEVQTECTTKGUQWVCPCUUGUUOGPVQHpƂVPGUUCPFRTQRTKGV[qVQUGTXGCUC
Director.
3 (2) The Board’s Composition

K Number of Directors - Complied
The Board consists of twelve (12) Directors, compliant with CBSL direction which requires the number of Directors to be not
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KK Period of service of a Director - Complied
The total period of service of all Non-Executive Directors does not exceed nine (9) years as required by the CBSL Direction.
Tenures of service of Directors are given on page 108.

KKK Director Appointment of an Employee as a Director - Complied
There are two (2) Directors who serve in an Executive Capacity in the Board. The Board balance is compliant with the CBSL
&KTGEVKQPYJKEJNKOKVUVJGPWODGTQH'ZGEWVKXG&KTGEVQTUVQQHVJG$QCTF


KX Independent Non-Executive Directors - Complied
The Board comprises six (6) Independent Non-Executive Directors, in compliance with regulatory requirement. Directors
satisfy the criteria for determining independence, which is reviewed annually by the Board, based on self-declaration forms
submitted by the Directors.

X Alternate Independent Directors - Complied
No Alternate Directors were appointed to represent Independent Non-Executive Directors. The Alternate Director
appointed to represent the Non-Executive Director, is not an Executive of the Bank.

XK Criteria for Non-Executive Directors - Complied
#NN0QP'ZGEWVKXG&KTGEVQTUCTGGOKPGPVRTQHGUUKQPCNUKPVJGKTTGURGEVKXGƂGNFUYKVJETGFKDNGVTCEMTGEQTFUCPFPGEGUUCT[
skills and experience. They contribute diverse perspective to matters set before the Board Meeting, bringing independent
judgment to bear on issues of strategy, performance and resources.

XKK More than half the quorum to comprise Non-Executive Directors - Complied
Majority of the Board comprises Non-Executive Directors.

XKKK Identify Independent Non-Executive Directors in communications and disclose categories of Directors in Annual Report -
Complied
+PFGRGPFGPV0QP'ZGEWVKXG&KTGEVQTUCTGGZRTGUUN[KFGPVKƂGFKPCNNEQTRQTCVGEQOOWPKECVKQPUVJCVFKUENQUGVJGPCOGUQH
Directors of the Bank. Composition and details of the Board are given on page 109.

KZ Formal and transparent procedure for appointments to the Board - Complied
The Board has a formal and transparent process in place for the succession and appointment of Directors. The Nomination
Committee processes and short-lists candidates and makes recommendations to the Board for approval. The attributes
CPFGZRGTKGPEGTGSWKTGFHTQORQVGPVKCNCRRQKPVGGUCTGKFGPVKƂGFCPFCITGGFRTKQTVQVJGUGCTEJRTQEGUUEQPUKFGTKPIVJG
combined knowledge, experience and diversity of the Board, in relation to the Bank’s strategic plans and any gaps thereof.
6JGECPFKFCVGoUQVJGTFKTGEVQTUJKRUCPFEQOOKVOGPVUCTGCNUQEQPUKFGTGFVQGPUWTGUWHƂEKGPVVKOGVQFKUEJCTIGVJGKTTQNGCV
HNB, effectively. Upon completion of this process, names are referred to the Director of the Bank Supervision Department of
VJG%GPVTCN$CPMQH5TK.CPMCHQTCRRTQXCNCUCpƂVCPFRTQRGTqRGTUQPRTKQTVQVJGCRRQKPVOGPV
Mr Rasitha Gunawardana, Mr Kithsiri Gunawardena and Dr. Prasad Samarasinghe were appointed to the Board in 2022.

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their appointment.
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casual vacancies. Mr Rasitha Gunawardana and Mr Kithsiri Gunawardena were re-elected at the AGM held in March 2022.
&T2TCUCF5COCTCUKPIJGYKNNQHHGTJKOUGNHHQTTGGNGEVKQPCVVJG#)/VQDGJGNFKP/CTEJ

ZK Communication of reasons for removal or resignation of Director - Complied
Resignations of Directors and the reasons thereof are promptly informed to the regulatory authorities and shareholders, in
EQORNKCPEGYKVJVJG%5'TGIWNCVKQPUVQIGVJGTYKVJCUVCVGOGPVEQPƂTOKPIYJGVJGTQTPQVVJGTGCTGCP[OCVVGTUVJCVPGGFVQ
be brought to the attention of shareholders.

ZKK Prohibition of Directors or employees of an appointment of Bank becoming a Director at another Bank - Complied
None of the Directors are Directors or employees at any other Bank. This is a requirement when seeking appointment of
Directors.
3 (3) &ULWHULDWRDVVHVV̌WQHVVDQGSURSULHW\RI'LUHFWRUV

K Age of Director should not exceed 70 years - Complied
There are no Directors who are over seventy (70) years of age.

GOVERNANCE AND RISK

KK ÀiVÌÀÃÃÕ`ÌLiÀiVÌÀÃvÀiÌ>ÓäV«>iÃ>`ÌÀiÌ>£äV«>iÃV>ÃÃwi`>Ã-«iVwi`
Business Entities - Complied
The Directors do not hold Directorships of more than twenty (20) companies/entities/institutions inclusive of Subsidiaries or
Associate Companies of the Bank. Directorships in other companies are given on page 117.

KKK Cooling-off period when appointing Directors or CEO - Complied
The Bank has complied with the directions when appointing Directors during the year.
3 (4) Management functions delegated by the Board

K Understand and study delegation arrangements - Complied

KK Extent of delegation should not hinder Board ability to discharge its functions - Complied

KKK Review delegation arrangements periodically to ensure relevance to operations of the Bank - Complied
The Board has a clear understanding of the delegation arrangements, studying, reviewing and approving the extent of
delegation annually to ensure it meets the business needs of the Bank whilst enabling the Board to effectively discharge
their duties.
3 (5) 7KH&KDLUPDQDQG&KLHI([HFXWLYH2ǏFHU

K Separation of roles - Complied
There is a clear separation between roles of the Chairperson and the CEO, ensuring a balance of power for decision-making.

KK Non-Executive Chairman and appointment of a Senior Independent Directors - Complied
The Chairperson, Mrs Aruni Goonetilleke is an Independent Non-Executive Director, as such there is no requirement to
appoint a Senior Independent Director.

KKK Disclosure of identity of Chairman and CEO and any relationships with the Board members - Complied
6JGRTQƂNGUQHVJG%JCKTRGTUQPCPF%'1CTGFKUENQUGFQPRCIG
#UFGENCTGFD[VJG&KTGEVQTUPQTGNCVKQPUJKRUKPENWFKPIƂPCPEKCNDWUKPGUUHCOKN[QTCP[QVJGTRTGXCKNGFDGVYGGPVJG
Chairperson, MD/ CEO or among other Board members.

KX Chairman to provide leadership to the Board - Complied
The Chairperson led the Board ensuring that it works effectively, and acts in the best interests of the Bank in a timely
basis. The effectiveness of the Chairperson in discharging Board functions is assessed annually by Board and in her self-
assessment.

X Responsibility for agenda lies with Chairman but may be delegated to Company Secretary - Complied
The Chairperson sets the Board agenda, assisted by the Company Secretary and MD/CEO.

XK Ensure that Directors are properly briefed and provided adequate information - Complied
6JG%JCKTRGTUQPGPUWTGFVJCVVJG$QCTFKUUWHƂEKGPVN[DTKGHGFCPFKPHQTOGFTGICTFKPIVJGOCVVGTUCTKUKPICV$QCTF/GGVKPI
Board papers are circulated generally seven (7) days prior to the meeting, giving members adequate time to study the
documents. Directors have access to KMP to clarify matters and to external specialists for independent advice, when
required.

XKK Encourage active participation by all Directors and lead in acting in the interests of the Bank - Complied
The Chairperson has encouraged all Directors to actively contribute towards the best interests of the Bank and it is
addressed in the list of functions and responsibilities of the Chairman/Chairperson was approved by the Board.

XKKK Encourage participation of Non-Executive Directors and relationships between Non-Executive and Executive Directors -
Complied
The Chairperson has encouraged effective participation of all Directors and constructive relations between Executives and
Non-Executive Directors. This function is assessed annually by the Board and by the Chairperson in the self-assessment.
Additionally, Non-Executive Directors chair the Board Sub-Committees providing further opportunity for active participation.


KZ Refrain from direct supervision of Key Management Personnel and executive duties - Complied
The Chairperson was not get involved in the supervision of Key Management Personnel or any other executive duties.

Z Ensure effective communication with Shareholders - Complied
The Annual General Meeting (AGM) is the main mechanism for shareholders’ views to be heard and where the Board
KPVGTCEVUYKVJCPFENCTKƂGUOCVVGTHQTVJGUJCTGJQNFGTU6JG$QCTFJCUHQTOWNCVGFCHQTOCNRQNKE[VQJCPFNGUJCTGJQNFGTUo
complaints. The shareholder engagement is given on page 121.

ZK CEO functions as the apex executive in charge of the day to day operations and business - Complied
As set out in the Board Charter, the responsibility for the day to day operations and business of the Bank has been
delegated to the MD/CEO in his capacity, as the apex executive-in-charge of the Board.
3 (6) Board appointed Committees

K Establishing Board Committees, their functions and reporting - Complied
The Board has appointed ten (10) Sub-Committees to ensure its oversight and control over the affairs of the Bank.
The details of Board Sub-Committees are disclosed on pages 114 to 115.
Each Sub-Committee is governed by its own Terms of Reference and has a Secretary who arranges the meetings and
maintains minutes and records under the supervision of the Chairman/Chairperson of the Sub-Committee. The Sub-
Committee Chairman/Chairperson are accountable for the effective functioning of Committees and reports on a periodic
basis to the Board on the activities of their respective Sub-Committees, highlighting matters for Board attention. Committee
mandates are reviewed regularly.
3 (6) (ii) Board Audit Committee
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- Complied
The Chairman of BAC, Mr Devaka Cooray is an Independent Non-Executive Director, a fellow member of the Institute of
Chartered Accountants of Sri Lanka and the Chartered Institute of Management Accountants United Kingdom. He has
YQTMGFYKVJ/GUUTU'TPUV;QWPIHQTQXGT[GCTUQHYJKEJ[GCTUYCUCUC5GPKQT#UUWTCPEGCPF6CNGPV2CTVPGT*G
functioned as the Deputy Managing Partner from 2016 until his retirement in 2019. Mr Devaka Cooray has spearheaded
many initiatives during his tenure at Messrs. Ernst & Young. Details are provided on page 89.
b. Committee to comprise solely of Non-Executive Directors - Complied
#NNOGODGTUCTG0QP'ZGEWVKXG&KTGEVQTUQHYJKEJVJTGG
CTG+PFGRGPFGPV0QP'ZGEWVKXG&KTGEVQTUCUCV
c. Board Audit Committee functions - Complied
In terms of its mandate, the Board Audit Committee is responsible for the following key recommendations:
I. The appointment of the External Auditor for audit services in line with professional and ethical standards and in
compliance with regulatory requirements. On the recommendation of the Board Audit Committee/Board, the
shareholders have approved Messrs. KPMG as the External Auditor of the Bank for the year 2022,
II. The service period, audit fee and any resignation or dismissal of the auditor. The Board Audit Committee ensures that
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[GCTUCPFVJCVVJGRCTVKEWNCT
CWFKVRCTVPGTKUPQVTGGPICIGFHQTVJGCWFKVDGHQTGVJGGZRKT[QHVJTGG
[GCTUHTQOVJGFCVGQHVJGEQORNGVKQPQHVJG
previous term,
III. The implementation of the Central Bank guidelines issued to auditors from time to time and
IV. Monitoring and review of the adequacy and effectiveness of accounting policies and the application of relevant
accounting.
d. Review and monitor External Auditor’s independence and objectivity and the effectiveness of the audit processes -
Complied
The Board Audit Committee monitors and reviews the External Auditor’s independence, objectivity and the effectiveness of
the audit process taking into account relevant professional and regulatory requirements. In addition, the Bank has adopted
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GOVERNANCE AND RISK
e. Provision of Non-Audit services by External Auditor - Complied

The BAC is guided by the Board approved policy for Engagement of the External Auditor to provide Non-Audit Services.
The Policy was reviewed in 2021.
In assignment of non-audit services to External Auditors by the Bank, the Board/Board Audit Committee ensures that
the External Auditor has the necessary skills and experience for the assignment and ascertains the independency and/or
objectivity of the External Auditor in carrying out his duties and responsibilities will not be impaired. Assigning such Non-
Audit Services to External Auditors is discussed at BAC meetings and prior Board approval is obtained. Please refer Board
Audit Committee Report on page 162 for further details.
f. Determines scope of Audit - Complied
The External Auditor Messrs. KPMG attended eight (8) meetings during the year. The External Auditor presented the audit
approach and procedures, including nature & scope of the audit and auditor’s independence to the Committee.
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to monitor the integrity of the Bank’s Financial Statements, Annual Report, accounts and quarterly reports prepared for
FKUENQUWTGCPFVJGUKIPKƂECPVƂPCPEKCNTGRQTVKPILWFIGOGPVUEQPVCKPGFVJGTGKP6JGTGXKGYHQEWUGURCTVKEWNCTN[QPVJG
following:
Major judgemental areas,
I. Any changes in accounting policies and practices,
++ 5KIPKƂECPVCFLWUVOGPVUCTKUKPIHTQOVJGCWFKV
II. The going concern assumption,
IV. Compliance with relevant accounting standards and other legal requirements.
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External Auditor.
i. Review of Management Letter and Bank’s response - Complied
The Board Audit Committee reviewed the External Auditor’s management letter for 2021, and the Management’s response
and follow up on addressing the same thereto during 2022.
j. Review of Internal Audit Function - Complied
During the year, the Board Audit Committee reviewed the independence, objectivity and performance of the Internal Audit
(WPEVKQPGPUWTKPIVJGHWPEVKQPCEVUYKVJKORCTVKCNKV[RTQƂEKGPE[CPFFWGRTQHGUUKQPCNECTG
BAC reviewed the adequacy of coverage of the internal audit plan and approved the same. The Committee also assessed
VJG+PVGTPCN#WFKV&GRCTVOGPVoUTGUQWTEGTGSWKTGOGPVUKPENWFKPIUWEEGUUKQPRNCPPKPICPFKUUCVKUƂGFVJCVVJG+PVGTPCN#WFKV
Department has the necessary authority to carry out its work.
6JG%QOOKVVGGTGXKGYGFKPVGTPCNCWFKVƂPFKPIUOCPCIGOGPVTGURQPUGUVJGTGVQCPFTGUWNVUQHVJGHQNNQYWRCEVKQPVCMGPQP
the recommendations of the Internal Audit Department.
The Internal Audit Department’s evaluation of the Bank’s internal controls were reviewed by the Board Audit Committee.
The Committee reviewed the performance appraisal of the Chief Internal Auditor and other senior staff members of the
Internal Audit Department. The Committee is kept appraised of resignations of senior staff of the Internal Audit Department
together with the reasons for resigning.
The Chief Internal Auditor directly reports to the Board Audit Committee, ensuring the independence of the Internal Audit
Function.
k. Internal Investigations - Complied
/CLQTƂPFKPIUQHKPVGTPCNKPXGUVKICVKQPUCPFOCPCIGOGPVoUTGURQPUGUVJGTGVQCTGTGXKGYGFD[VJG$QCTF#WFKV%QOOKVVGG
and implementation of the recommendations.

l. Attendees at Board Audit Committee Meetings - Complied

6JG%JCKTOCPQH$+4/%/&%'1'&%11%JKGH4KUM1HƂEGT%JKGH(KPCPEKCN1HƂEGT%JKGH+PVGTPCN#WFKVQT*GCFQH
%QORNKCPEG%JKGH6GEJPQNQI[&KIKVCN1HƂEGT#)/QH1RGTCVKQPUCPFCTGRTGUGPVCVKXGQHVJG'ZVGTPCN#WFKVQTCTG
typically invited to attend meetings. Other Board members may also attend meetings upon invitation. The Committee met
the External Auditor on two (2) occasions in 2022, in the absence of the Executive Directors and KMP.
m. Explicit authority, resources and access to information - Complied
The Board Audit Committee is guided by the Committee Charter which sets out authority and responsibilities of the said
Committee. The Charter was last reviewed in 2019. The Board Audit Committee is authorised to obtain external professional
advice and to invite outsiders with relevant experience to attend as and when necessary. The Committee also has full access
to information in order to investigate matters relating its Terms of Reference. Terms of Reference of the Committee is
described in the Committee Report given on page 162.
n. Regular Meetings - Complied
The Board Audit Committee met nine (9) times during the year. Conclusions in discharging its duties and responsibilities are
recorded in the minutes of the meetings maintained by the secretary to BAC.
o. Disclosure in Annual Report - Complied
Details of activities of the BAC are included in the report of the Board Audit Committee given on page 162.
The number of meetings held and attendance at Board Audit Committee meetings held in 2022 are set out on page 111.
p. Maintain Minutes of Meetings - Complied
Minutes of Board Audit Committee meetings are recorded and maintained by the Secretary to the Committee. The Chief
Internal Auditor serves as the Secretary to the Committee.
q. Whistle blowing policy and relationship with External Auditor - Complied
A Board approved Whistle blowing policy is in place. The Whistle blowing policy and the mechanism had been
communicated to all staff members.
The Board Audit Committee reviews issues relating to breach of ethics if any and the arrangements by which the staff of the
$CPMOC[KPEQPƂFGPEGVQTCKUGEQPEGTPUCDQWVRQUUKDNGKORTQRTKGVKGU6JG%QOOKVVGGCNUQGPUWTGFVJCVVJGRTQEGFWTGUHQT
the independent investigations of such matters are appropriate and are in place. The Independent Non-Executive Director
handling whistle blowing complaints provides regular updates to the BAC.
The Board Charter addresses the Board’s responsibility to encourage any communication regarding non-compliances and
unethical behaviour within the Bank.
3 (6) (iii) Human Resources & Remuneration Committee
a. Remuneration Policy - Complied
6JG%QOOKVVGGTGXKGYUCNNUKIPKƂECPVJWOCPTGUQWTEGRQNKEKGUCPFKPKVKCVKXGUUCNCT[UVTWEVWTGURTQOQVKQPUCPFVGTOUCPF
conditions relating to staff at Senior Management Level with information and recommendations from the MD/CEO and the
%JKGH*WOCP4GUQWTEG1HƂEGT6GTOUQH4GHGTGPEGQHVJG%QOOKVVGGKUFGUETKDGFKPVJG%QOOKVVGG4GRQTVQPRCIG
Separate Remuneration Policies for the Board of Directors, MD/CEO, and all employees of the Bank including KMP are in
place.
b. Goals and Targets - Complied
The goals and targets of the Board of Directors have been clearly set out and evaluated at the end of the year. The goals
and targets for the MD/CEO and the senior leadership team are documented under the Balance Score Card system. Further,
the goals and targets for 2022 for the MD/CEO and the senior leadership team was approved at the Board Meeting.

GOVERNANCE AND RISK
c. Performance Evaluation- Complied

The Directors are evaluated at the end of the year based on the goals and targets set out.
The Committee deliberates upon and recommends to the Board of Directors regarding the remuneration packages, annual
increments and bonuses of the MD/CEO,ED/COO, members of the Corporate Management and Senior Management staff,
having evaluated their performance against the set goals and targets.
d. Meetings - Complied
The HRRC Committee met seven (7) times during the year.
The MD/CEO attends Human Resources & Remuneration Committee by invitation. The MD/CEO is not present at the time
when matters relating to him are being discussed.
3 (6) (iv) Nomination Committee
a. Appointment of Directors, CEO and Key Management Personnel - Complied
A formal procedure is in place to appoint new Directors, MD/CEO and Key Management Personnel.
b. Re-election of Directors - Complied
The Committee considers and recommends the re-election of the Directors to the Board. The Committee also set criteria of
the succession of the MD/CEO.
c. Eligibility criteria for appointments to key managerial positions including CEO - Complied
6JG%QOOKVVGGUGVUVJGGNKIKDKNKV[ETKVGTKCKPENWFKPISWCNKƂECVKQPUGZRGTKGPEGCPFMG[CVVTKDWVGUHQTCRRQKPVOGPVQT
promotion to key managerial positions including the position of the MD/CEO.
A Board approved procedure to appoint Directors, MD/CEO and KMP is in place.
d. Fit & proper persons - Complied
'CEJ&KTGEVQTKPENWFKPIVJG/&%'1ECTTKGUQWVCPCUUGUUOGPVQHpƂVPGUUCPFRTQRTKGV[qVQUGTXGCUC&KTGEVQTQHVJG$CPM
These declarations are reviewed by the Nomination Committee prior to submission to the Director of Bank Supervision of
the Central Bank of Sri Lanka.
e. Succession plan and new expertise - Complied
A Succession Planning Policy is in place for KMP and Directors. Each year, the Nomination Committee reviews the
additional/ new expertise requirements and succession arrangements for Directors and KMP of the Bank, in line with the
strategic plan.
f. Composition of Nomination Committee - Complied
The following Non-Executive Directors served on the Nomination Committee during 2022.
Chairman
Mr Devaka Cooray - Independent Non-Executive Director
Other Committee Members
Mr Madu Ratnayake - Independent Non-Executive Director
Mrs Aruni Goonetilleke - Independent Non-Executive Director
Terms of Reference of the Committee is described in the Committee Report on page 155.

3 (6) (v) Board Integrated Risk Management Committee

a. Composition of Risk Management Committee - Complied
The following personnel served on the Board Integrated Risk Management Committee during 2022.
Chairman
Mr Rimoe Saldin - Non-Executive Director
Other Committee Members
Mr Damien Fernando - Non-Executive Director (Retired w.e.f. 28th October 2022)
Mr Jonathan Alles - Managing Director/CEO
Mr Madu Ratnayake - Independent Non-Executive Director
Mr Rasitha Gunawardana - Independent Non-Executive Director (Appointed w.e.f. 21st January2022)
Dr. Prasad Samarasinghe - Non-Executive Director (Appointed w.e.f. 28th October 2022)
6JG%JCKTOCPQH$#%'&%11%JKGH(KPCPEKCN1HƂEGT%JKGH6GEJPQNQI[&KIKVCN1HƂEGTCPF%JKGH+PVGTPCN#WFKVQTCVVGPF
meetings on invitation. The Committee makes decisions on behalf of the Board within the framework of the authority and
responsibilities assigned.
Terms of Reference of the Committee is described in the Committee Report on page 158.
b. Risk Assessment - Complied
Policies on Credit Risk Management, Market Risk Management and Operational Risk Management have been approved by
the Committee, providing a framework for management and assessment of risks. In discharging its responsibilities further
as per the mandate, periodic reports on pre-established risk indicators prepared by the Risk Department is submitted to the
Committee for review.
The risk management process followed by the subsidiary companies has also been reviewed by the BIRMC during 2022.
c. Review of management level committees on risk - Complied
The Committee reviews the reports of the Management Committees including the Asset and Liability Committee (ALCO)
and the Executive Risk Management & Credit Policy Committee to assess their adequacy and effectiveness in addressing
URGEKƂETKUMUCPFOCPCIKPIVJGUCOGYKVJKPVJGSWCPVKVCVKXGCPFSWCNKVCVKXGTKUMNKOKVUUGVKPVJG4KUM#RRGVKVG5VCVGOGPV
approved by the Board.
d. Corrective action to mitigate risks exceeding prudential levels - Complied
6JG4KUM&CUJDQCTFURTGRCTGFQPCRGTKQFKEDCUKUTGƃGEVUVJGCEVWCNGZRQUWTGNGXGNUWPFGTGCEJTKUMECVGIQT[CICKPUVVJG
tolerance levels, decided by the Committee on the basis of the Bank’s policies and regulatory and supervisory requirements.
The Committee has taken prompt corrective actions to mitigate the effects of risk indicators which have gone beyond the
tolerance levels.
e. Frequency of meetings - Complied
The Committee has met eleven (11) times during the year. The agenda covers matters assessing all aspects of risk
management including the updated business continuity plans.
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Such matters, if any, are referred to the Human Resources Division for necessary action.
g. Risk assessment report to Board - Complied
Detailed reports of the BIRMC meetings are submitted to the Board at the subsequent Board Meeting.
h. Compliance Function - Complied
The Bank has established a compliance function to assess and ensure the Bank’s compliance with laws, regulations,
regulatory guidelines, internal controls and approved policies on all areas of business operations, headed by a dedicated
%QORNKCPEG1HƂEGTYJQTGRQTVUVQVJG$+4/%

GOVERNANCE AND RISK
3 (7) Related Party Transactions

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A Board approved policy to enhance the transparency of Related Party Transactions is in place. The RPTRC oversees the
process relating to the said subject and the Committee report is provided on page 165.
5VGRUJCXGDGGPVCMGPD[VJG$QCTFVQCXQKFCP[EQPƃKEVUQHKPVGTGUVVJCVOC[CTKUGKPVTCPUCEVKPIYKVJTGNCVGFRCTVKGUCU
RGTVJGFGƂPKVKQPQHVJKU&KTGEVKQP&KTGEVQTURTQXKFGFGENCTCVKQPUVQVJG$QCTFCDQWVVJGKTQWVUKFGDWUKPGUUKPVGTGUVUCV
appointment and quarterly thereafter. Directors do not participate in, and excuse themselves from the Meeting, when the
$QCTFEQPUKFGTUCP[OCVVGTUKPYJKEJNGPFKPIVQTGNCVGFGPVKVKGUCTGFKUEWUUGFCPFYJGTGCEQPƃKEVKPKPVGTGUVOC[CTKUG
6TCPUCEVKQPUECTTKGFQWVYKVJTGNCVGFRCTVKGUCUFGƂPGFD[.-#5QPn4GNCVGF2CTV[&KUENQUWTGUoKPVJGPQTOCNEQWTUGQH
business are disclosed in note 60 to the Financial Statements on ‘Related Party Disclosures’ on pages 422 to 428. Directors’
KPVGTGUVUKPEQPVTCEVUYJKEJFQPQVHCNNKPVQVJGFGƂPKVKQPQH4GNCVGF2CTV[6TCPUCEVKQPUCURGT.-#5CTGTGRQTVGF
separately in the Annual Report, outside the Financial Statements. The net accommodation granted to each category of
TGNCVGFRCTVKGUCUCRGTEGPVCIGQHVJG$CPMoUTGIWNCVQT[ECRKVCNKUIKXGPWPFGT4WNG

KK
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KK Related Party Transactions covered by direction - Complied
The Related Party Transactions Policy approved by the Board covers the following transactions:
C 6JGITCPVQHCP[V[RGQHCEEQOOQFCVKQPCUFGƂPGFKPVJG/QPGVCT[$QCTFoU&KTGEVKQPUQPOCZKOWOCOQWPVQH
accommodation,
b. The creation of any liabilities of the Bank in the form of deposits, borrowings and investments,
E 6JGRTQXKUKQPQHCP[UGTXKEGUQHCƂPCPEKCNQTPQPƂPCPEKCNPCVWTGRTQXKFGFVQVJG$CPMQTTGEGKXGFHTQOVJG$CPMCPF
F 6JGETGCVKQPQTOCKPVGPCPEGQHTGRQTVKPINKPGUCPFKPHQTOCVKQPƃQYUDGVYGGPVJG$CPMCPFCP[TGNCVGFRCTVKGUYJKEJ
OC[NGCFVQVJGUJCTKPIQHRQVGPVKCNN[RTQRTKGVCT[EQPƂFGPVKCNQTQVJGTYKUGUGPUKVKXGKPHQTOCVKQPVJCVOC[IKXGDGPGƂVUVQ
such related parties.

KKK Prohibited transactions - Complied
The Bank’s Related Party Transactions Policy prohibits transactions which would grant related parties more favourable
treatment than that accorded to other customers. These include the following:
I. Granting of “Total Net Accommodation” to related parties, exceeding a prudent percentage of the Bank’s regulatory
ECRKVCN4GHGT4WNG

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II. Charging of a lower rate of interest than the Bank’s best lending rate or paying more than the Bank’s deposit rate for a
comparable transaction with an unrelated comparable counterparty.
III. Providing of preferential treatment, such as favourable terms, covering trade losses and/or waiving fees/commissions,
that extend beyond the terms granted in the normal course of business undertaken with unrelated parties.
IV. Providing services to or receiving services from a related-party without an evaluation procedure
8 /CKPVCKPKPITGRQTVKPINKPGUCPFKPHQTOCVKQPƃQYUVJCVOC[NGCFVQUJCTGRQVGPVKCNN[RTQRTKGVCT[EQPƂFGPVKCNQTQVJGTYKUG
sensitive information with related parties, except as required for the performance of legitimate duties and functions.

KX Granting accommodation Director or close relation to a Director - Complied
A formal procedure is in place for granting accommodation to Directors or to close relatives of Directors. Such
CEEQOOQFCVKQPOWUVDGUCPEVKQPGFCV$QCTFOGGVKPIUD[PQVNGUUVJCPQHVJGPWODGTQH&KTGEVQTUGZENWFKPI&KTGEVQT
concerned, voting in favour of such accommodation or through circulation of papers which requires approval by all. The
terms and conditions of the facility include a provision that it will be secured by such security as may from time to time be
determined by the Monetary Board.

X Accommodations granted to persons, or concerns of persons, or close relations of persons, who subsequently are
appointed as Directors of the Bank - Complied
Accommodation granted to the newly appointed Directors were in line with the prescribed regulations.
For any deviations, the Bank always seeks necessary approval from the Monetary Board as per the statutory provisions.


XK Favourable treatment or accommodation to Bank employees or their close relations - Complied
0QHCXQWTCDNGVTGCVOGPVQTCEEQOOQFCVKQPKURTQXKFGFVQ$CPMGORNQ[GGUQTVJGKTTGNCVKXGUQVJGTVJCPUVCHHDGPGƂVU

XKK Remittance of accommodations subject to Monetary Board approval - Complied
No such situation has arisen during the year.
3 (8) Disclosures

K Publish annual and quarterly Financial Statements - Complied
Annual Audited Financial Statements and Quarterly Financial Statements of the Bank were prepared in accordance with
the formats prescribed by the Supervisory and Regulatory Authorities and applicable accounting standards and have been
RWDNKUJGFKPVJGPGYURCRGTUKPCNNVJTGG
NCPIWCIGU
3 (8) (ii) Disclosures in Annual Report
a. A Statement to the effect that the Annual Audited Financial Statements have been prepared in line with applicable
>VVÕÌ}ÃÌ>`>À`Ã>`Ài}Õ>ÌÀÞÀiµÕÀiiÌÃ]VÕÃÛivÃ«iVwV`ÃVÃÕÀiÃ
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Disclosures on the compliance with the applicable accounting standards and regulatory requirements in preparation of the
Annual Audited Financial Statements have been made in the Statement of Directors’ Responsibility for Financial Reporting
QPRCIG%JKGH'ZGEWVKXG1HƂEGToUCPF%JKGH(KPCPEKCN1HƂEGToU5VCVGOGPVQH4GURQPUKDKNKV[QPRCIGCPFPQVG
Statement of Compliance to the Financial Statements on page 249.
b. Report by the Board on the Bank’s internal control mechanism - Complied
#EQPƂTOCVKQPD[VJG&KTGEVQTUQPVJGGHHGEVKXGPGUUQHVJGKPVGTPCNEQPVTQNU[UVGOQXGTƂPCPEKCNTGRQTVKPIKUIKXGPWPFGTVJG
Directors’ Statement on Internal Control over Financial Reporting on page 167.
V° ÝÌiÀ>čÕ`ÌÀ½ÃViÀÌwV>ÌÌiivviVÌÛiiÃÃvÌiÌiÀ>VÌÀiV>Ã
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6JG#UUWTCPEG4GRQTVKUUWGFD[VJG'ZVGTPCN#WFKVQTQPVJG+PVGTPCN%QPVTQNQXGT(KPCPEKCN4GRQTVKPIDCUGFQP5.5#'
– Assurance Reports for Banks on Directors’ Statement on Internal Controls issued by the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka) is given on page 169. The recommendations made by the Auditors where relevant, will be dealt
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remuneration paid by the Bank - Complied
2TQƂNGUQH&KTGEVQTUCTGIKXGPQPRCIGUVQ
Directors’ transactions with the Bank are disclosed in note 60 to the Financial Statements on pages 422 to 428.
Remuneration paid by the Bank to the Board of Directors (which includes the remuneration of the Executive Directors) is
FKUENQUGFKPPQVGVQVJG(KPCPEKCN5VCVGOGPVUQPRCIG
e. Total accommodations granted to each category of related parties and as a percentage of the Bank’s regulatory capital
- Complied
The net accommodation granted to each category of related parties is given below as a percentage of the Bank’s regulatory
capital.
Category of Related Party Transactions Rs Mn %

Non-Executive Directors and their close family members 0.66 0.00
Key Management Personnel* and their close family members 0.25
Subsidiaries 2,052.50 1.47
Joint Venture 4,224.85
Entities which Directors and their close family members have a substantial interest 181.14
)QXGTPOGPVQH5TK.CPMC'PVKVKGU%QPVTQNNGF,QKPVN[%QPVTQNNGF5KIPKƂECPVN[+PƃWGPEGFD[ 45.99
the Government of Sri Lanka
* includes the Executive Directors

GOVERNANCE AND RISK
f. Aggregate values of remuneration to, and transactions with Key Management Personnel - Complied
The aggregate amount of remuneration paid during 2022 to KMP and the transactions with KMP are given below;
Remuneration and transactions with the Key Management Personnel Rs Mn

Remuneration paid
Loans and Advances
Deposits 900.87
Investments
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The External Auditors have performed procedures set out in Sri Lanka Standards on Related Service 4400 issued by the
Institute of Chartered Accountants of Sri Lanka (SLSRS 4400), to meet the compliance requirement of the Corporate
)QXGTPCPEG&KTGEVKXG6JGƂPFKPIURTGUGPVGFKPVJGKTTGRQTVCFFTGUUGFVQVJG$QCTFCTGEQPUKUVGPVYKVJVJGOCVVGTU
disclosed above and did not identify any inconsistencies to those reported above by the Board. The recommendations
OCFGD[VJG#WFKVQTUYJGTGTGNGXCPVYKNNDGFGCNVYKVJKP
°,i«ÀÌVwÀ}V«>ViÜÌ«ÀÕìÌ>ÀiµÕÀiiÌÃ]Ài}Õ>ÌÃ]>ÜÃ>`ÌiÀ>VÌÀÃ
«i`
There were no material non-compliance to prudential requirements, regulations, laws and internal controls affecting the
Bank.
i. Non-compliance Report - Complied
There were no supervisory concern lapses in the Bank’s Risk Management Systems or non-compliance with the said Direction
that have been pointed out by the Director of the Banks Supervision Department of the CBSL, which has been directed to
be disclosed to the public. Hence, there are no disclosures in this regard.
3 (9) Transitional and Other General Provisions
Transitional and other general provisions - Complied
Transitional provisions have been complied with.

COMPLIANCE WITH THE CODE OF BEST PRACTICE ON CORPORATE GOVERNANCE ISSUED BY
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF SRI LANKA IN 2017
CODE REF REQUIREMENT REFERENCE COMPLIED PAGE REF
A Directors
A.1 The Board The Board of Directors - 2022 104
A.1.1 Board Meetings Board Meetings 111
Governance of Meetings - Before the Meeting 112
A.1.2 Roles & Responsibilities of the Board The Board - Board's Key Responsibilities 107
# Compliance Compliance Governance 120
Independent Professional Advice
A.1.4 Access to advice and services of Board Meetings 111
Company Secretary The Bank has obtained adequate insurance cover for
the Board of Directors and KMP in accordance with the
Insurance Cover recommendations of the Nominations Committee. The
&KTGEVQTUCPF1HƂEGTU.KCDKNKV[2QNKE[KUTGPGYGFCPPWCNN[
A.1.5 Independent Judgement Independence 109
A.1.6 Dedicate Adequate Time and Effort %QPƃKEVQH+PVGTGUV 116
Board Pack Board Meetings 111
A.1.7 Calls for Resolutions Governance of Meetings - After the Meeting 112
However, if a single Director deem it necessary that such
resolution must be decided at a Board meeting not by
circulation, the Chairman shall put the resolution to be
decided in a meeting. This is in compliance with the
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a resolution to be presented to the Board.
A.1.8 Board Induction and Training Annual Training & Induction 110
Assessment of Training Needs Board Appraisal
A.2 %JCKTOCP%JKGH'ZGEWVKXG1HƂEGT Segregation of Roles & Responsibilities 109
# Chairman’s Role in Preserving Good Segregation of Roles & Responsibilities 109
Corporate Governance
A.4 Availability of Financial Acumen Board Composition 108
A.5 Board Balance The Board 107
Board Composition 108
A.5.1 Independent Non-Executive Directors The Board 107
A.5.2 Board Composition 108
# Director’s Independency Independence 109
A.5.4 Annual Declaration Independence 109
A.5.5 Evaluation of Independency Independence 109

GOVERNANCE AND RISK
A.5.6 Alternate Directors The Alternate Director appointed to represent the Non-
Executive Director is not an executive of the Bank.
A.5.7 Senior Independent Director (SID) The Chairperson is an Independent Non-Executive
A.5.8 Director, as such there is no requirement of a SID.
A.5.9 Meetings with Non-Executive Directors Meeting with NED 111

A.5.10 Resolutions Governance of Meetings - During the Meeting 112
A.6 Provision of Appropriate and Timely Governance of Meetings - Before the Meeting 112
Information Delegation of Authority 115
A.7 Appointments to the Board Board Refreshment 110
Nomination Committee Report 155
A.8 Re-election of Directors Board Refreshment 110
A.9 Appraisal of Board & Sub-Committees Board Appraisal 111
A.10 #PPWCN4GRQTVVQ&KUENQUG5RGEKƂGF The Board of Directors - 2022 104

Information Regarding Directors %QPƃKEVQH+PVGTGUV 116
Meeting Attendance 111
Board Sub-Committees 114
A.11 Annual appraisal of the CEO Appraisal of the MD/CEO 118
B. Directors’ Remuneration
B.1 Directors’ & Executive Remuneration Fair and Responsible Remuneration 117
– HRRC Board Sub-Committees 114
B.2 Level & Make up of Remuneration Fair and Responsible Remuneration 117
There were no Employee Share Option Plans (ESOP)
available in 2022
$ Disclosures related to Remuneration in Financial Statements of the Bank
Annual Report HRRC report
C. Relations with Shareholders
C.1 Constructive use of the AGM & Financial Governance 121
conduct of General Meetings
C.2 Communication with shareholders Financial Governance 121
% Disclosure of Major and Material There were no major or material transactions during the
Transactions year.

D. Accountability & Audit

D.1 Present a balanced and Board's Key Responsibilities 107
understandable assessment of Financial Governance 121
VJG%QORCP[oUƂPCPEKCNRQUKVKQP
%JKGH'ZGEWVKXG1HƂEGToUCPF%JKGH(KPCPEKCN1HƂEGToU
performance and prospects
Responsibility Statement 229
Annual report of the Board of Directors on the affairs of
the Bank 148
Directors' Responsibility for Financial Reporting
Directors’ Statement on Internal Control over Financial
167
Reporting

Management Discussion and Analysis
Statement of going concern of the Bank on note 2.1.5, to
the Financial Statements 250
Related Party Transactions
(i) Note 60 in the Financial Statements 422-428
(ii) Report of the RPTRC 165
In the unlikely event of the net assets of the Bank
falling below 50% of Shareholders Funds, the Board will
summon an Extraordinary General Meeting (EGM) to
notify the shareholders of the position and to explain the
remedial action being taken.
D.2 Process of Risk Management and a Risk Governance 119
sound system of internal control to Risk & Capital Review 176
safeguard shareholders’ investments
Directors’ Statement on Internal Control over Financial
and the Company’s assets
Reporting 167
& Audit Committee Board Audit Committee Report 162
D.4 Related Party Transactions Review Board Related Party Transactions Review Committee
Committee report 165
D.5 Code of Conduct and Ethics Code of Conduct & Ethics 116
Chairperson's Message
D.6 Corporate Governance Disclosures Corporate Governance Report
E/F Institutional and other Investors
Encourage voting at AGM – Financial Governance
121
institutional and other investors
G. Internet of Things & Cyber security
G.1 Identify connectivity and related cyber risks Information Technology Governance 119
G.2 Appoint a CISO and allocate budget Information Technology Governance 119
to implement a cyber - security policy
) Include cyber security on Board agenda Information Technology Governance 119
G.4 Assurance Information Technology Governance 119
G.5 Disclosures in Annual Report Information Technology Governance 119
H. Environment, Society & Governance
H.1 ESG Reporting Sustainability Governance

GOVERNANCE AND RISK
ANNUAL REPORT OF THE BOARD OF DIRECTORS

ON THE AFFAIRS OF THE COMPANY
The Board of Directors of Hatton National OUR APPROACH TO CORPORATE Daily management of the Bank and
Bank PLC (the ‘Bank’ or the ‘Company’) GOVERNANCE implementation of the Bank’s strategic
takes pleasure in presenting its Annual The Bank aspires to the highest standards of plan has been delegated to the Executive
4GRQTVVQVJGUJCTGJQNFGTUHQTVJGƂPCPEKCN governance, integrity and professionalism. Management lead by the Managing Director
[GCTGPFGFUV&GEGODGTVQIGVJGT Our Governance Framework is benchmarked %JKGH'ZGEWVKXG1HƂEGT
/&%'11WT
YKVJVJGCWFKVGFƂPCPEKCNUVCVGOGPVUQHVJG to global best practice and references the Executive Management are empowered to
$CPMEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUQH principles of the Banking Act Direction VCMGFGEKUKQPUYKVJKPVJGFGƂPGFHTCOGYQTM
the Group for the said year and the Auditor’s No.11 of 2007 on Corporate Governance Their complementary skills and diverse
4GRQTVQPVJQUGƂPCPEKCNUVCVGOGPVU and the Code of Best Practice on Corporate experience strengthen the Bank’s ability to
conforming to the requirements of the Governance issued by the Institute of deliver on strategy.
Companies Act No 7 of 2007, Banking Chartered Accountants of Sri Lanka in 2017.
Act Direction No 11 of 2007 (Corporate Details of compliance are set out on pages
4QNGUCPFTGURQPUKDKNKVKGUCTGENGCTN[ENCTKƂGF
Governance for Licensed Commercial Banks by mandates and job descriptions, through
125 to 141 of this report.
and subsequent amendments thereto) which authority and responsibility are
and Listing Rules of the Colombo Stock effectively delegated. The segregation of
Exchange (‘CSE’). The Report is also guided A ROBUST GOVERNANCE roles and responsibilities of the Chairperson
by the recommended best practices on FRAMEWORK and MD/CEO supports balance of power.
Corporate Governance. Our Governance Framework promotes The MD/CEO reports directly to the Board.
integrated thinking and decision-making
The Annual Report of the Board of Directors that balances strategic outcomes over Management is open and transparent
on the Affairs of the Company has been time, reconciling the interests of the Bank, with the Board and brings to attention any
expanded to enlarge disclosures on the stakeholders and society in creating and matters of concern in a timeous manner.
Bank’s Corporate Governance practices. protecting sustainable shared value. Executive Directors and the Bank’s Key
A more detailed report on Corporate Strong leadership, checks and balances at Management Personnel (KMP) attend Board
Governance forms part of the suite of all levels, a clear organisational structure meetings, increasing contact between the
reports produced by the Bank and is YKVJYGNNFGƂPGFNKPGUQHTGURQPUKDKNKV[ Board and Management. Regular reporting
included in this report. effective risk management and controls on key matters enables effective oversight
and a value driven ethical culture, support by the Board.
Hatton National Bank PLC is a Licensed robust governance structures that provide
Commercial Bank registered under the clear direction for quick and responsive GOVERNANCE IN 2022
$CPMKPI#EV0QQHCPFYCU decision-making and promotes responsible
incorporated as a public limited liability 2022 continued to test the rigour, resilience,
behaviour. and agility of our governance structures as
Company in Sri Lanka on 5th March 1970
under the Companies Ordinance No 51 of we sought to drive sustainable growth for
As the overall custodian of good corporate
the Bank in alignment with our Vision and
6JG$CPMYCUTGTGIKUVGTGFCUTGSWKTGF governance, the Board is fully committed to
under the provisions of the Companies Act Values, carefully balancing interests of our
realising the four Governance Framework
No 7 of 2007 on 27th September 2007. The UVCMGJQNFGTU%NGCTN[FGƂPGFIQXGTPCPEG
outcomes of Sustainable Value Creation,
re-registration number of the Bank is PQ 82. structures enabled the Board to maintain
Effective Control, Ethical Leadership and
ongoing and effective oversight and
Accountability, as explained on pages 107 to
The ordinary shares (both voting and non- leadership as the medium to long-term
124 of this report.
voting) and unsecured subordinated/senior impacts of the current economic conditions
redeemable debentures of the Bank are unfold. The Board received regular updates
listed on the Colombo Stock Exchange. The LEADERSHIP supported by increased analysis and
Bank has been assigned a National Long- The Board of Directors holds ultimate reporting on key issues affecting the Bank
Term Rating of A(lka)/RWN by Fitch Ratings responsibility for the performance and and its stakeholders. Compliance, Risk
Lanka Ltd. affairs of the Bank. They collectively set Management, Recoveries, and Internal
the risk appetite of the Bank, lead in Control remained key priorities. The Board,
6JGTGIKUVGTGFQHƂEGCPF*GCF1HƂEGQHVJG formulating the Bank’s strategy, monitor directly and through its sub-committees,
Bank is located at “HNB Towers” No 479, T the achievement of objective set and considered actions to successfully face
B Jayah Mawatha, Colombo 10, Sri Lanka. oversee the Bank’s governance frameworks challenges, manage crisis and harness
and control environment. The Board has opportunities while recalibrating strategy, to
6JGƂPCPEKCNUVCVGOGPVUYGTGTGXKGYGFCPF FGNGICVGFURGEKƂEQXGTUKIJVTGURQPUKDKNKVKGU protect and create value for the Bank and its
approved by the Board of Directors on 17th that warrant greater attention, to ten (10) stakeholders.
(GDTWCT[ $QCTF5WD%QOOKVVGGU1HVJGUGƂXG
are mandated and are compliant with In deliberating strategy, the Board adopted
regulations. an integrated approach to value creation,
embracing stakeholder inclusivity while
considering the Environmental, Social

GOVERNANCE STRUCTURE
BOARD OF DIRECTORS
MANDATORY BOARD SUB-COMMITTEES VOLUNTARY BOARD SUB-COMMITTEES
Board Audit Committee Strategy & Investment Review Committee
HR & Remuneration Committee Procurement & Assets Disposal Committee
Nomination Committee Board Credit Committee
Board Integrated Risk Management Committee Board Recoveries Committee
Related Party Transactions Review Committee Board Digital Banking Committee
Managing Director / CEO
Executive Director / COO
Chief Internal Auditor CORPORATE MANAGEMENT TEAM
Compliance Committee Asset & Liability Management Committee

iv,Ã"vwViÀ Strategic Business Committee IT Steering Committee
Operational Risk Steering Committee Information Security Committee

«>Vi"vwViÀ
Executive Risk Management
HR Committee
& Credit Policy Committee
and Governance (ESG) impacts on the

organisation. The Board considered THE BOARD
Management updates on stakeholder #UCVUV&GEGODGT
engagement initiatives undertaken and
through reports from Board sub-committees, Non-Executive > Mrs. Aruni Goonetilleke Chairperson
as fully described in Stakeholder Independent Directors > Mr. Amal Cabraal
Expectations – pages 28 to 29 in this report. > Mr. Devaka Cooray
> Mr. Madu Ratnayake
The annual review of strategy for the > Mr. Osman Chandrawansa
[GCTYCUEQPFWEVGFD[VJG$QCTF > Mr. Rasitha Gunawardana
in November 2022, in consultation with
Non- Executive Non- > Mr. Rimoe Saldin
the Corporate Management Team, and
Independent Directors > Mr. Nihal Jayawardene PC
considered impacts of the current economic
> Mr. Kithsiri Gunawardena
conditions, risk and opportunities in
> Dr. Prasad Samarasinghe
approving the Bank’s business plan and
setting revised short, medium and long-term Executive Directors > Mr. Jonathan Alles Managing Director
targets. %JKGH'ZGEWVKXG1HƂEGT
> Mr. Dilshan Rodrigo %JKGH1RGTCVKPI1HƂEGT

GOVERNANCE AND RISK

The Board is considered to be of Nomination Committee (NC), which capability to guide the Bank through key
appropriate balance and mix of skills recommends the appointment of new challenges.
and experience. The Boards’ diversity Directors for approval by the Board having
contributes to varied perspectives and reviewed the combined knowledge, The meeting agenda and papers are made
objective evaluation of matters set before experience and diversity of the Board in available to the Directors generally seven
them. Non-Executive Directors are relation to the Bank’s strategic plans and days before the meeting and minutes of the
eminent professionals in their respective any gaps thereof. During the year, one new preceding meeting circulated two weeks
ƂGNFU)GPFGTFKXGTUKV[KORTQXGFYKVJVJG &KTGEVQTYCUCRRQKPVGFVQVJG$QCTFVQƂNN before the subsequent Board Meeting,
appointment of Mrs. Aruni Goonetilleke to vacancies that arose in 2022. The NC spent CNNQYKPIOGODGTUUWHƂEKGPVVKOGVQTGXKGY
the Board in April 2021. Careful succession a considerable amount of time in identifying them, make their observations and be
planning and deliberate processes ensure the most suitable candidates, to build the prepared for the forthcoming meeting. The
that the skills and experience of the Board right team to steer the Bank into the future. Chairperson sets the Board agenda, assisted
remain relevant to the Bank’s needs. The by the Company Secretary. Care is taken to
Board adopts a Skills Matrix to support New Board members participate in an GPUWTGVJCVVJG$QCTFURGPFUUWHƂEKGPVVKOG
director recruitment and succession induction programme aimed at providing considering matters critical to the Bank’s
planning. them with the information and support success, as well as compliance, risk and
needed to be effective. Directors continue administrative matters.
Directors are appointed through a formal to keep abreast of changes in regulations
and transparent process, assessed for and the business environment by attending
their independence and approved by the seminars, workshops, conferences and
Central Bank of Sri Lanka. The nomination formal training programmes to build their
of Directors has been delegated to the
Details of Directors’ meetings are given below Related Party Transactions

Board Credit Committee

Strategy & Investment
Procurement & Assets

Board Integrated Risk

Date of Appointment
Disposal Committee
HR & Remuneration
Review Committee
Review Committee
Board Recoveries
to the Board
Committee
Committee
Committee
Board
Board Member
Total Meetings Held 14 9 7 7 11 4 7 12 6 8 21

Mrs Aruni Goonetilleke 01st April 2021 14/14 7/7 7/7 7/7 6/6
8/8
Mr Jonathan Alles UV/C[ 12/14 *5 *6 *4 0/11 4/4 *7 *5 4/21
Mr Amal Cabraal 01st April 2014 14/14 7/7 7/7
6/6 8/8

Mr Damien Fernando 25th October 2018 **11/11 **10/10 **5/6 **10/10 **16/18
(Retired w.e.f. 25th October 2022)
Mr Madu Ratnayake 25th October 2018 14/14 7/7
6/7 9/11 5/7 20/21

Mr Dilshan Rodrigo 01st July 2020 14/14 *8 *11 *2 *6 *11 *5 *8 *18
Mr Devaka Cooray TF,WN[ 14/14 9/9 7/7
*10 4/4
4/6
Mr Osman Chandrawansa 01st April 2021 9/9 4/4 6/6
Mr Rimoe Saldin VJ#RTKN *9 11/11
12/12

Mr Nihal Jayawardene PC 17th August 2021 14/14 11/12 5/6 8/8
Mr Rasitha Gunawardana 21st January 2022 9/9 10/10 11/11 8/8
Mr Kithsiri Gunawardena 21st January 2022 9/9 6/7 7/7
Dr Prasad Samarasinghe 26th October 2022 0/1 1/1 2/2
* Meetings attended by invitation
** Includes Meetings attended by an alternative Director
Chairperson/Chairman as at 31st December 2022

Remuneration Independence management committees with appropriate
The Bank’s Remuneration Policy supports The independence of Non-Executive expertise and resources and are compliant
the motivation and reward of performance Directors is reviewed on an annual basis as with statutory and regulatory requirements.
of employees while meeting regulatory part of the Directors’ evaluation process.
6JGQXGTCNNTKUMRTQƂNGQHVJG$CPMKPETGCUGF
requirements and stakeholder expectations. When the Board considers any matters
in the period under review, as the economic
Remuneration consists of two components KPYJKEJCEQPƃKEVKUOCPKHGUVN[GXKFGPV
conditions prevailed and the pandemic
ƂZGFTGOWPGTCVKQPCPFXCTKCDNG Directors withdraw from participating in the
continued to weigh heavily on the economy
remuneration including that of an annual meeting and recuse themselves from the
and society. In response, the Bank enhanced
performance bonus. Details of Directors’ particular deliberation and decision.
its risk management capabilities to mitigate
GOQNWOGPVUCPFQVJGTDGPGƂVURCKFKP
exposure as described in the Risk Review on
respect of the Group and the Bank during Compliance pages 176 to 226.
VJGƂPCPEKCN[GCTGPFGFUV&GEGODGT During the year, the Bank met urgent and
CTGIKXGPKP0QVGVQVJGƂPCPEKCN rapidly evolving regulatory requirements
UVCVGOGPVUKPRCIG
Innovation and Technology Governance
as the operating environment continued to
6JG$QCTFKUEQIPK\CPVQHVJGDGPGƂVU
be increasingly volatile. The Bank remained
Board Evaluation of agility, scalability, and innovation that
extra vigilant, expanding the scope and
digital platforms provide. Directors ensure
In line with our commitment to good rigour of processes to mitigate emerging
implementation of an effective and properly
corporate governance practices, threats and ensure compliance. Continued
resourced digital technology strategy that
performance evaluations designed to investments in new systems, platforms and
delivers exceptional client and employee
improve the Board’s effectiveness and that processes including the use of advanced
experiences and is aligned to the Bank’s
of its Committees, are conducted annually. CPCN[VKEUCPF#TVKƂEKCN+PVGNNKIGPEGUQNWVKQPU
overall business strategy.
Each member of the Board carries out a and establishment of a Compliance Audit
self-assessment of his effectiveness as an team, strengthened the compliance function The Board is equally committed to
individual as well as the effectiveness of the CPFKORTQXGFGHƂECE[KPRTGXGPVKQP safeguarding the Bank’s information assets
Board as a whole. The 2022 appraisal was detection, and reporting. The Bank is and operational systems. Information and
JGNFKP,CPWCT[6JGQWVEQOGQHVJG compliant with all relevant statutory and Cyber Security risk remains inherently high
appraisal indicated that the performance of regulatory requirements, including the as a result of the increase in volumes of
VJG$QCTFOGVGZRGEVCVKQPU#TGCUKFGPVKƂGF Listing Rules of the CSE and directions digital transactions and remote working
for improvement were communicated to the issued by the Central Bank of Sri Lanka. vulnerabilities amid the current economic
Board. The Board is also guided in the conduct conditions and the pandemic. During
of business by the Bank’s policies, values, the year, governance structures were
Directors Interests and Related Party standards and Code of Conduct & Ethics. strengthened, and surveillance and
Transactions monitoring tools enhanced to meet the
6JG%QORNKCPEG1HƂEGTYJQTGRQTVUVQ
The Board is committed to the highest Bank’s information and cyber security
the Board Integrated Risk Management
standards of professional and ethical requirements.
Committee, tables a report on compliance
conduct. Directors declare their outside
at the quarterly meetings of the Committee
business interests on appointment and
and where necessary, such non-compliant
Group Corporate Governance
quarterly thereafter, details of which are The Board seeks to establish a common
issues are escalated to the Board for
recorded in the Directors’ Interests Register, standard of corporate governance across
necessary action.
and available for inspection in terms of the group subsidiaries. Policies and procedures
Companies Act. Directors have no direct or The Board comprises six (6) Independent are aligned to that of the Bank and yet
indirect interest in a contract or a proposed Non-Executive Directors, in compliance with shaped to meet the intrinsic business
contract with the Bank other than those regulatory requirements. . structure and risks of each entity.
disclosed on page 170 to 175 in this report.
Risk Governance & Internal Control
The Related Party Transactions Review
Committee considers all transactions that The Board is responsible for formulating and
require approval in line with the Bank’s implementing effective risk management
Related Party Transactions Policy and in and internal control systems to safeguard
compliance with the relevant regulations of shareholder interests and the assets of
CSE and Central Bank of Sri Lanka, ensuring the Bank, in meeting strategic objectives.
transactions are fair and in the best interests These systems cover all controls, including
of the Bank. Related party transactions ƂPCPEKCNQRGTCVKQPCNCPFEQORNKCPEGCPF
CTGFKUENQUGFKP0QVGVQVJGƂPCPEKCN are monitored and regularly reviewed for
statements in page 422. effectiveness by the Board. The systems
are governed by mandated board and

GOVERNANCE AND RISK

Statutory Disclosures
Section 168 of the Companies Act No 7 of 2007, requires the following information to be published in the Annual Report prepared for the year
under review.
No. Disclosure requirements Reference to the Disclosure reference for compliance Page
Companies
Act No 7 of 2007
1 The nature of the business of the Bank Section 168 (1) (a) About HNB Group 6-7
and the Group
2 Financial statements for the accounting Section 168 (1) (b) 6JGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRCPFVJG$CPMHQT
period completed and signed in VJG[GCTGPFGF&GEGODGT Signed on
accordance with Section 152 page 241
#WFKVQToUTGRQTVQPVJGƂPCPEKCN Section 168 (1) (c) Independent Auditors’ Report
statements of the Bank and the Group
4 Any change in accounting policies Section 168 (1) (d) 0QVGVQVJGƂPCPEKCNUVCVGOGPVU%JCPIGUKP 260
made during the accounting period Accounting Policies and Disclosures
5 Particulars of entries in the Interests Section 168 (1) (e) Directors’ Interest in Contracts with the Bank 170-175
Register made during the accounting %QTRQTCVG)QXGTPCPEG4GRQTV%QPƃKEVQH+PVGTGUV
period provides details of management of Directors’ Interests
6 4GOWPGTCVKQPCPFQVJGTDGPGƂVUQH Section 168 (1) (f) 0QVGVQVJGƂPCPEKCNUVCVGOGPVU1VJGT'ZRGPUGU
Directors during the accounting period Corporate Governance Report - Fair and Responsible
Remuneration, provides details of the remuneration
framework
7 Total amount of donations made by the Section 168 (1) (g) 0QVGVQVJGƂPCPEKCNUVCVGOGPVU1VJGT'ZRGPUGU
Company during the accounting period
8 0COGUQHVJGRGTUQPUJQNFKPIQHƂEG Section 168 (1) (h) $QCTF2TQƂNGU 86-91
as Directors of the Company as at the
end of the accounting period and the
names of any persons who ceased to
JQNFQHƂEGCU&KTGEVQTUQHVJG%QORCP[
during the accounting period
9 Amounts payable by the Company to Section 168 (1) (i) 0QVGVQVJGƂPCPEKCNUVCVGOGPVUs1VJGT'ZRGPUGU
VJGRGTUQPQTƂTOJQNFKPIQHƂEGCU
auditor of the Company as audit fees
and as a separate item, fees payable
by the Company for other services
RTQXKFGFD[VJCVRGTUQPQTƂTO

No. Disclosure requirements Reference to the Disclosure reference for compliance Page
Companies
Act No 7 of 2007
10 Particulars of any relationship (other Section 168 (1) (j) The Bank’s auditors during the period under review 120
than that of auditor) which the auditor were Messrs. KPMG, Chartered Accountants.
has with or any interests which the Independence and Objectivity of the External Auditor,
auditor has in the Company or any of its provides details of the Policy for the Engagement of
subsidiaries the External Auditor for Audit and Non-Audit services.
Based on the declaration provided by Messrs. KPMG,
and as far as the Directors are aware, the auditors do
not have any relationship or interest with the Bank that
in our judgement, may reasonably be thought to have
a bearing on their independence within the meaning
of the Code of Professional Conduct and Ethics issued
by the Institute of Chartered Accountants of Sri Lanka
(CA Sri Lanka), applicable on the date of this Report.
A resolution re-appointing Messrs. KPMG Sri Lanka
as Auditors for the ensuing year and authorising the
&KTGEVQTUVQƂZVJGKTTGOWPGTCVKQPYKNNDGRTQRQUGFCV
the Annual General Meeting.
11 Signed on behalf of the Board by two Section 168 (1) (k) Complied with 152
Directors and the Company Secretary

GOVERNANCE AND RISK

Additional Disclosures
The following information is additionally disclosed. The details are provided within notes to the Annual Report, which form an integral part of
the Annual Report of the Board of Directors.
No. Disclosure requirements Note reference Page
1 Vision, Mission and Vision and Mission 6

Corporate Conduct The Bank is committed to upholding high standards of business conduct and ethics
in the work place at all times, paramount in retaining the trust of our stakeholders. All
employees of the Bank abide by the Bank’s Code of Conduct and Ethics, which has
been communicated via electronic and visual mediums and been made available in
three languages. The Code of Conduct and Ethics for Directors is embodied in the
Board Charter.
2 Principal Activities About HNB Group 6
Changes to the Group There were no changes to Group structure during the year, except for the below noted -
Structure transactions,
1. HNB Finance PLC, completed the amalgamation with Prime Finance PLC on
12th May 2022
2. Acuity Partners Limited disposed its joint venture, Guardian Acuity Asset
/CPCIGOGPV.KOKVGFVQ%6%.5#*QNFKPIU.KOKVGFQPVJ,CPWCT[
4 List of Directors of Subsidiaries
Subsidiaries and Joint
HNB Assurance PLC Sithma Development (Pvt) Ltd
Ventures of the Bank as at
UV&GEGODGT Mrs. M A R C Cooray Mr. P R Saldin
Mr. D P N Rodrigo Ms. Anuradhi U Delage
Dr. S Selliah Mr. U A Roshan Fernando
Mr. D R Abeysuriya Dr. Rohan Karunaratne
Mr. L U D Fernando
Mr. S A Chapman
Mr. Ashoka Goonesekere
Dr. T K D A Prasad Samarasinghe
(Alternate Director to Mr. L U D Fernando)
HNB Finance PLC

Mr. Dilshan Rodrigo
Mr. B M D C Prabath
Mr. P A H D Wijesundara
Mr. A S Wijesinha
Dr. S U H Fernando
Mr. A G R Dissanayake
Mr. M Perera
Mr. R D Manatunga
Mr. P L P Withana
Mr. M S Polamarasetty
Mr B Premalal

Joint Ventures
Acuity Partners (Pvt) Ltd
Mr. N H T I Perera
Mr. R Abeywardena
Mr. M S Wijemanne
Mr. P G D B Pallewatte
Mr. P L P Vithana
Mr. D F S N Perera
Mr. S I Wijesinghe
Mr. K S Jayasuriya
Other Group Companies

HNB General Insurance Ltd Lanka Ventures PLC
(Subsidiary of HNB Assurance PLC) Mr. P G D B Pallewatte
Mrs. M A R C Cooray Mr. N H T I Perera
Mr. M O F Salieh Mr. M R Abeywardena
Ms. M A Tharmaratnam Mr. J D N Kekulawala
Mr. L U D Fernando Mr. R A Dassanayaka
Mr. M S Wijemanne Mr. A G R Dissanayake
Mr. A V Abeygunasekara
Mrs. L C Cooray
Dr. T K D A P Samarasinghe
(Alternate Director to Mr. L U D Fernando)
Acuity Securities Ltd Acuity Stockbrokers Ltd
Mr. M R Abeywardena Mr. M R Abeywardena
Mr. R A Dassanayake Mr. Prashan Fernando
Mr. P G D B Pallewatte Mrs. K A L T Ranaweera
Mr. A V Abeygunasekara Mr. M S Wijemanne
Mr. K. S. Jayasuriya Mr. A Iddamalgoda
Mr. Prince Perera
LVL Energy Fund PLC
(Subsidiary of Lanka Ventures PLC)
Mr. P G D B Pallewatte
Mr. N H T I Perera
Mr. M A Wijetunge
Mr. M R Abeywardena
Mr. J D N Kekulawala
Mr. M M Wijetunge
Mr. C Dharmawardena
Mr. R A Dassanayaka
5 Review of Operations Chairperson’s Message 15-17
Managing Director/CEO’s Message 19-22
Stakeholder Reports 45-85
Business Line Reviews

GOVERNANCE AND RISK

6 Future Developments Chairperson’s Message 15-17

Managing Director/CEO’s Message 19-22
Stakeholder Reports 45-85
Business Line Reviews
7 Financial Statements 6JGƂPCPEKCNUVCVGOGPVUQHVJG$CPMCPFVJG)TQWRJCXGDGGPRTGRCTGFKPCEEQTFCPEG
with Sri Lanka Accounting Standards laid down by the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka) and they comply with the requirements of Companies Act No 7
QHCPF$CPMKPI#EV0QQH
CUCOGPFGF
6JGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRCPFVJG$CPMHQTVJG[GCTGPFGF&GEGODGT
8 Directors’ Responsibility for Directors’ Responsibility for Financial Reporting
Financial Reporting
9 Auditors’ Report Independent Auditor’s Report
10 5KIPKƂECPV#EEQWPVKPI 0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU$CUKUQH2TGRCTCVKQPCPF5KIPKƂECPV 249-260
Policies Accounting Policies, respectively
11 Going Concern 0QVGVQVJGƂPCPEKCNUVCVGOGPVUs)QKPI%QPEGTP 251
12 Income 0QVGVQVJGƂPCPEKCNUVCVGOGPVUs)TQUU+PEQOG
Financial Results and 5VCVGOGPVQH2TQƂVQT.QUUCPF1VJGT%QORTGJGPUKXG+PEQOG
Appropriations Statement of Changes in Equity 242-245
14 Reserves Statement of Changes in Equity 242-245
15 Corporate Donations 0QVGVQVJGƂPCPEKCNUVCVGOGPVU1VJGT'ZRGPUGU
The Bank did not make any donations to Government approved charities
16 Taxation 0QVGVQVJGƂPCPEKCNUVCVGOGPVU+PEQOG6CZ'ZRGPUG
17 Statutory Payments 6JG&KTGEVQTUVQVJGDGUVQHVJGKTMPQYNGFIGCPFDGNKGHCTGUCVKUƂGFVJCVCNNUVCVWVQT[ -
payments in relation to the Government and the employees have been made up to
date.
18 Dividends on Ordinary 0QVGVQVJGƂPCPEKCNUVCVGOGPVU&KXKFGPFU2CKFCPF2TQRQUGF
Shares
19 (i) Capital Expenditure The total capital expenditure on acquisition of investment property, property, plant
and equipment and intangible assets of the Bank and the Group amounted to
4U4UCPF4UTGURGEVKXGN[
$CPM4U
CPF)TQWR4U&GVCKNUCTGIKXGPKP0QVGCPFVQVJG
ƂPCPEKCNUVCVGOGPVU
(ii) Capital commitments Capital expenditure approved and contracted for and approved and not contracted for, 421
CUCVDCNCPEGUJGGVFCVGCTGIKXGPKP0QVG
DVQVJGƂPCPEKCNUVCVGOGPVUs%CRKVCN
commitments.
20 Property, Plant and 0QVGVQVJGƂPCPEKCNUVCVGOGPVU2TQRGTV[2NCPVCPF'SWKROGPV
Equipment
21 Net Book Value of Freehold 0QVGVQVJGƂPCPEKCNUVCVGOGPVU2TQRGTV[2NCPVCPF'SWKROGPV
Properties
22 Outstanding Litigation In the opinion of the Directors and the Bank’s Lawyers, pending litigation against the 421
$CPMFKUENQUGFKP0QVG
EQHVJGƂPCPEKCNUVCVGOGPVUYKNNPQVJCXGCOCVGTKCNKORCEV
QPVJGƂPCPEKCNRQUKVKQPQHVJG$CPMQTKVUHWVWTGQRGTCVKQPU
0QVGU
EVQVJGƂPCPEKCNUVCVGOGPVU.KVKICVKQPCICKPUVVJG$CPM

Events after the Reporting 0QVGVQVJGƂPCPEKCNUVCVGOGPVU'XGPVU1EEWTTKPI#HVGTVJG4GRQTVKPI2GTKQF

Date
24 Stated Capital and 0QVGUCPFVQVJGƂPCPEKCNUVCVGOGPVUs5VCVGF%CRKVCNCPF5WDQTFKPCVGF6GTO 415 & 406
Debentures Debts, respectively
25 Share Information Investor Relations 467-477
26 Shareholdings Investor Relations 467-477
27 Equitable Treatment to The Bank has at all times ensured that all shareholders (both voting and non-voting) are -
Shareholders treated equitably except for the right to vote.
28 Register of Directors and #UTGSWKTGFWPFGT5GEVKQP
QHVJG%QORCPKGU#EV0QQHVJG$CPM -
Secretaries maintains a Register of Directors and Secretaries which contains the name, surname,
former name (if any), residential address, business, occupation, dates of appointment
and dates of resignation (if applicable) of each Director and the Secretary.
29 Directors’ Interests in the Name As at 31st As at 31st
Ordinary Shares (Voting and December December
Non-Voting) 2022 2021
Mrs. Aruni Goonetilleke - -

Mr. Antonio Jonathan Alles
Mr. Amal Cabraal - -
Mr. Madu Ratnayake - -
Mr. Devaka Cooray 8,776 8,607
Mr. Dilshan Rodrigo 26,164 25,702
Mr. Osman Chandrawansa
Mr. Prawira Rimoe Saldin
Mr. Nihal Jayawardena - -
Mr. Kithsiri Gunawardene * - N/A
Mr. Rasitha Gunawardana * N/A
Dr. Prasad Samarasinghe ** - -
* Appointed w.e.f 21st January 2022
** Appointed w.e.f. 26th October 2022. Alternate Director to Mr. L.U.D. Fernando w.e.f.5th July 2019
Directors’ Interest in &KTGEVQTUFKFPQVJCXGCP[KPVGTGUVKPFGDGPVWTGUCUCVUV&GEGODGT -

Debentures
Directors’ Remuneration 0QVGVQVJGƂPCPEKCNUVCVGOGPVU1VJGT'ZRGPUGU
Human Resources Value Delivered To Employees 56-62
Employee Share Option Plan 0QVGVQVJGƂPCPEKCNUVCVGOGPVU5VCVGF%CRKVCN 415
Environmental Protection To the best of knowledge of the Board, the Bank has complied with the relevant 45-85
environmental laws and regulations. The Bank has not engaged in any activity that is
harmful or hazardous to the environment.
5RGEKƂEOGCUWTGUVCMGPVQRTQVGEVVJGGPXKTQPOGPVCTGHQWPFKPVJG5VCMGJQNFGT
Reports.
Risk Management and Risk & Capital Reviews 218-226
Internal Control
Directors’ Statement on Directors’ Statement on Internal Control Over Financial Reporting 167-168
Internal Control
Corporate Governance Corporate Governance Report 104-141

GOVERNANCE AND RISK

Insurance and Indemnity Pursuant to a decision of the Board, the Bank obtained an Insurance Policy to cover -
&KTGEVQTUoCPF1HƂEGTUoNKCDKNKV[
Material Foreseeable Risk Risk & Capital Reviews 218-226
Factors (As per Rule No 7.6
(VI) of the Listing Rules of the
Colombo Stock Exchange)
40 Material Issues Pertaining No material issues occurred during the year -
to Employees and Industrial
Relations Pertaining to the
Bank (As per Rule No 7.6 (VII)
of the Listing Rules of the
Colombo Stock Exchange)
41 Operational Excellence Performance Highlights
NOTICE OF ANNUAL GENERAL MEETING

6JGVJ#PPWCN)GPGTCN/GGVKPIQHVJG$CPMKUEQPXGPGFQPVJ/CTEJCVKPVJGHQTGPQQPCVVJG#WFKVQTKWOQP.GXGNQH
p*0$6QYGTUq0Q6$,C[CJ/CYCVJC%QNQODQ
4GIKUVGTGF1HƂEG6JG0QVKEGQHVJGVJ#PPWCN)GPGTCN/GGVKPIKUGPENQUGF
ACKNOWLEDGEMENT OF THE CONTENTS OF THE REPORT

As required by Section 168 (1) (k) of the Companies Act No 7 of 2007, the Board of Directors hereby acknowledges the contents of this Annual
Report.
For and on behalf of the Board of Directors,
Shiromi Halloluwa
Head of Legal/Board Secretary
Jonathan Alles Aruni Goonetilleke

/CPCIKPI&KTGEVQT%JKGH'ZGEWVKXG1HƂEGT %JCKTRGTUQP
Colombo, Sri Lanka

VJ(GDTWCT[

HR AND REMUNERATION COMMITTEE REPORT
Meetings of the Human Resources > Practices that attract, develop and retain
& Remuneration Committee (the High-Performing Talent
“Committee”) shall be held as necessary but > Short and long-term incentives that are
at least twice a year and at such other times competitive and linked to the creation of
as the Chairman of the Committee shall sustainable performance and shareholder
deem necessary. The proceedings of the returns.
Committee meetings are regularly reported
> Learning and development strategy and
to the Board and minutes are circulated to
annual training plan
all Directors.
> Workforce representation
Mr Madu Ratnayake The Human Resources & Remuneration > Leadership Talent Acquisition & Retention
Chairman Committee, functions within agreed terms of
Human Resources & Remuneration reference and is committed to the principles
Committee
of accountability and transparency whilst To achieve these goals, the Committee
Composition & Meetings ensuring that remuneration structures are
> Sets targets and goals for the MD/CEO
equitable and aligned with the performance
The HR & Remuneration Committee and the KMPs annually.
of the Bank and long-term interests of the
of the Board comprises three Non- > Reviews the Human Resource policies
Bank and its shareholders.
Executive Independent Directors whose and interventions, salary structures and
details are given below: KPEGPVKXGUEJGOGUDGPGƂVKPI5GPKQT
POLICY Management. In this process, necessary
Chairman The Bank’s HR Remuneration Policy is information and recommendations are
Mr Madu Ratnayake (IND/NED) focused on attracting, motivating and obtained from the MD/CEO and the
retaining employees with the appropriate %JKGH*WOCP4GUQWTEG1HƂEGT
%*41
Other Members professional, managerial and operational DGM. The Committee evaluates
expertise, necessary to achieve the their performance, deliberates and
> Mr Amal Cabraal (IND/NED)
objectives of the Bank. During the year, recommends to the Board of Directors
> Mrs Aruni Goonetilleke (IND/NED) the Committee supervised and provided the remuneration packages, annual
> Mr Kithsiri Gunawardena(NIND/NED) direction for the implementation of strategic increments and bonuses of the MD/
(appointed w.e.f 21st January 2022) human resource objectives of the Bank CEO, Executive Director/Chief Operating
in keeping with the following Terms of 1HƂEGT
%11OGODGTUQHVJG%QTRQTCVG
(IND – Independent Director, NIND – Reference (TOR). Management and Senior Management
Non Independent Director, NED – Non
staff.
Executive Director and MD/CEO – The Committee shall consider/evaluate
Managing Director and Chief Executive > The organisation structure is reviewed
the performance of the MD/CEO and Key
annually and changes are made in line
1HƂEGT Management Personnel (KMP) periodically
with the Bank’s strategic direction.
against the targets and goals set by it
$TKGHRTQƂNGUQHVJG&KTGEVQTUCTGIKXGP and determine the basis for revising the > An on-going priority is to ensure proper
on page 86 to 91 in this report. remuneration, increments, bonuses and succession for critical positions in the
other performance-based incentives of the Bank.
Invitees of the Board MD/CEO and KMPs. The Committee shall > Recruitment and promotion of staff at
Mr. Jonathan Alles (MD/CEO) except consult the MD/CEO and take into account management level are considered and
when his remuneration or performance his/her recommendations when determining approved by the Committee based on
is discussed. the performance of the KMPs, increments, proposals submitted by the MD/CEO and
bonuses and other performance-based Human Capital Management Department
Management Participants incentives payable to such KMPs. (HCMD) following a formal process of
Mrs. Chiranthi Cooray – CHRO / Deputy evaluation.
General Manager – Human Resources SCOPE > Provide strategic oversight for skill
The Committee is vested with the power and capability building, taking into
Secretary to the Committee to examine, evaluate and recommend to consideration market dynamics and
The Board Secretary functions as the the Board of Directors on any matter that emerging requirements in regulatory,
Secretary to the committee. may impact the Human Resources of the technology and market developments.
Bank and any other matter referred to it by > In respect of diversity, to review and
the Board or any other Sub-Committee. recommend to the Board in relation to:
In discharging its responsibilities, the
i. Bank’s diversity policy;
Committee focuses on the following:
ii. Establishment of measurable
objectives for achieving diversity

GOVERNANCE AND RISK
HR AND REMUNERATION COMMITTEE REPORT
across the Group, annual assessment 6JGVCDNGDGNQYTGƃGEVUVJGGORNQ[OGPV

Meetings of both objectives and progress in TGRQTVQHVJG%QORCP[CUCVUV&GEGODGT
The Committee met Seven (7) ) times achieving them; annually, review the 2022.
during 2022. relative proportion of women and
men in the workforce at all levels. Levels Total
Attendance details of meetings held
Reviewing remuneration by gender to
during 2022 are as follows.
identify whether any pay gaps exists Top Management 25
Eligible to attend as a result of gender gaps and where Senior Management 65
/Attended relevant, provide recommendations to Mid Management 64
Mr Madu Ratnayake 7/7 the Board.
Junior Management, Supervisors
Mr Amal Cabraal 7/7 and Clerical Staff
KEY ACTIVITIES CARRIED OUT IN 2022 Secretaries 167
Mrs Aruni Goonetilleke 7/7
> Creation of the People Roadmap & HR Workers (Electricians, Drivers,
Mr Kithsiri Gunawardena 7/6
dashboard Labourers, Peons, Lift Operators)
Mr Jonathan Alles 6
> Putting in place the Training plan for 2022 Total Permanent 4688
aligned to strategy and the new normal
Employees on Contract 466
especially taking into account the current
economic and environmental tensions Total 5154
> Reviewing Executive Compensation &
PROFESSIONAL ADVICE
CPFTGEQOOGPFGF$GPGƂVU%QTTGEVKQP
Consolidation The Committee is authorised to seek
external professional advice on matters
> Reviewing Revised Succession Plan for
within its purview.
the Senior Management with a success
rate assessment
> Recommending amendments to Whistle COMMITTEE EVALUATION
Blowing Policy to create more windows To ensure that the Committee’s performance
for staff to access is optimal, a self-evaluation of the
> Reviewing the Rewards Cycle – Talent Committee members was also carried out
4GYCTFU$GPGƂVUCPFCRRQKPVGFC and circulated amongst the members of the
consultant to study and advice on the Committee for necessary action.
way forward
> Establishing a Date Plan for CONCLUSION
Performance Management Program +PVJG$CPMYKNNEQPVKPWGVQHQEWU
and recommending the introduction on introducing and strengthening HR
of a Performance Based Total Rewards policies, practices and systems in the area
Program for Key Leadership Team of performance management, employee
> Setting up strategic talent goals for the recognition, strategic workforce planning
Bank & productivity, capability development,
employee engagement and succession
management. Through these initiatives
EMPLOYMENT REPORT we expect to broaden our employment
In order to achieve the goals, the Bank value proposition and thereby enhance the
needs a workforce that is skilled and productivity of the Bank.
representative of the stakeholders we serve.
Therefore, the current and future success of
the Bank is dependent on the knowledge
and collective skill of our employees and in
the face of new pressure to adapt faster to a
far more diverse and mobile workforce. The Madu Ratnayake
Bank is fully committed to invest in Human Chairman
Capital Development to enhance the level Human Resources & Remuneration
of skill and the acquisition of new skill and Committee
knowledge that are necessary to improve
the overall performance of the Bank. Colombo, Sri Lanka
VJ(GDTWCT[

NOMINATION COMMITTEE REPORT
ACTIVITIES IN 2022 and ensuring the implementation of

During the year, the Committee reviewed the approved procedure in selecting
the Bank’s adequacy of Corporate such Directors and Key Management
Governance Framework, policies, guidelines, Personnel;
principles and skills required to enable
> Recommending the re-election of current
achievement of strategic goals at Board
Directors to the Board of Directors,
and Key Management levels. In doing so, it
taking into account the performance
considered the balance of skills, experience,
and contribution made by such Directors
attributes, independence and diversity of
towards the overall discharge of
Mr Devaka Cooray the Board and Key Management Personnel
responsibilities by the Board;
Chairman (KMPs) to ensure that each leadership
Nomination Committee tier collectively has the requisite skills to > 4GXKGYKPIETKVGTKCUWEJCUSWCNKƂECVKQPU
implement the strategic plans and the Board experience and key attributes required
Composition & Meetings has the ability to provide informed and to be considered for the appointment
The following Directors serve/served on constructive challenges to the Management. or promotion to the post of Managing
the Nomination Committee: Director/CEO and/or the Key
The Committee reviewed succession
Management positions;
Chairman planning extensively for the Board and
the Key Management Personnel (KMPs) to > Ensuring that the Directors, Managing
Mr Devaka Cooray (IND/NED)
ensure continuity of operations and build Director/CEO and the Key Management
strong talent pipelines. 2GTUQPPGNCTGƂVCPFRTQRGTRGTUQPUVQ
Other Members
JQNFQHƂEGCUTGSWKTGFD[VJG$CPMKPI#EV
> Mr Madu Ratnayake (IND/NED) - Talent management and succession
and other applicable statutes;
> Mrs Aruni Goonetilleke (IND/NED) . planning for roles below Board level have
been a key topic for discussion and the > Assessing from time to time the
(IND – Independent Director, NIND – Committee continued to monitor activities requirements of additional/new expertise
Non Independent Director, NED – Non and initiatives to strengthen the Bank’s talent and the succession arrangements for
Executive Director and MD/CEO – pipeline. Recommendations were also made retiring Directors and Key Management
Managing Director and Chief Executive to appoint KMPs to take on group Director Personnel with a view to providing advice
1HƂEGT positions on Group Company Boards to and recommendations to the Board on
ensure alignment of corporate values, any such appointment;
$TKGHRTQƂNGUQHVJG&KTGEVQTUCTGIKXGP policies, processes and cultures.
on page 86 to 91 in this report. > Overseeing the process by which the
6JGƂVPGUUCPFRTQRTKGV[QHVJG&KTGEVQTU Board, its Committees and individual
Invitees of the Board and the new KMPs were examined during Directors assess their effectiveness, and
Mr. Jonathan Alles - Managing Director/ the year as and when required to ensure TGRQTVVQVJG$QCTFQPƂPFKPIUCPF
%JKGH'ZGEWVKXG1HƂEGTRCTVKEKRCVGFCV compliance with the CBSL requirements. In recommendations.
the meetings on invitation as and when addition to the above, the revised selection
necessary. OCVTKZEQPVCKPKPISWCNKƂECVKQPUGZRGTKGPEG
and the key attributes applicable for THE TERMS OF REFERENCE
promotions to and within the Key The Terms of Reference (TOR) of the
Secretary to the Committee
Management Personnel were also reviewed Nomination Committee, adopted by the
The Board Secretary functions as the by the Committee. $QCTFKPYCUHWTVJGTTGƂPGFKP
secretary to the Committee. and 2014. It was further reviewed and
amended by the members at their meetings
Meetings COMMITTEE RESPONSIBILITIES
held on 19th January 2018 and 4th April
Attendance details of meetings held The Nomination Committee is responsible 2020.
during 2022 are as follows. for reviewing the composition of the Board
and Board Sub - Committees to ensure
Eligible to attend that they are appropriately constituted in
/Attended line with the required skills, experience
Mr. Devaka Cooray(IND/NED) 7/7 and diversity. In addition, the Committee is
entrusted with the responsibility of:
Mr. Madu Ratnayake(IND/NED) 7/6
Mrs. Aruni Goonetilleke(IND/NED) 7/7 > Recommending to the Board the
Mr. Jonathan Alles - MD/CEO 4 appointment of new Directors and
Key Management Personnel (KMP)

GOVERNANCE AND RISK
NOMINATION COMMITTEE REPORT
DUTIES DISCHARGED BY THE > 'XCNWCVGFVJGWNVKOCVGDGPGƂEKCN > Overseeing the appointment of a

COMMITTEE ownership details of the top 50 voting UWEEGUUQTVQVJG%QORNKCPEG1HƂEGTRQUV
shareholders of the Bank; of the Bank.
Board Composition
The Committee: > Reviewed and recommended all Group Governance/Management
new appointments to the Boards of Principles
> Reviewed the structure, skills, the subsidiaries and associate companies of
composition of the Board and its > Based on the established Group
the Bank.
committees on an ongoing basis, Governance Code of 2016, the
making recommendation to the Board as %QOOKVVGGQPVJ,CPWCT[
HIGHLIGHTS 2022 assessed the level of compliance by the
appropriate;
During the year, the Committee’s activities Bank’s Group Companies for the year
> +FGPVKƂGFVJGTGSWKTGFUMKNNICRUCV$QCTF included: 2022, and further recommended that the
NGXGNCPFTGEQOOGPFGFECPFKFCVGUVQƂNN Compliance Department provide a report
vacancies on the Board; > Reviewing and updating the Corporate to the Committee that the governance
Charter of the Board of Directors; principles prescribed in the code were
> #UUGUUGFVJGƂVPGUUCPFRTQRTKGV[QHVJG complied with by the respective Group
&KTGEVQTUJQNFKPIQHƂEGKPVGTOUQHVJG > Reviewing the Terms of Reference (TOR) Companies;
provisions of the Banking Act and the of the Nomination Committee;
directions of the Monetary Board relating > Appointed suitable KMPs to Group
> Reviewing succession plans for Board and Companies as HNB nominee Directors to
to Corporate Governance;
KMPs; ensure governance standards within the
> Recommended the appointment of group are complied with.
> Overseeing the Board evaluations
Dr T K D A Prasad Samarasinghe as a
undertaken during the year and further
&KTGEVQTVQƂNNCECUWCNXCECPE[ETGCVGFD[ Training
TGƂPKPIVJG$QCTF'XCNWCVKQPHTCOGYQTM
the retirement of Mr Damien Fernando
The Committee ensured that the Bank
CHVGTEQORNGVKPI[GCTUKPVJGQHƂEGQH > Monitoring environmental, social and carried out the induction programme for
Director and further recommended that governance developments as well as the newly appointed Directors during the
the Directors so appointed be formally implications for the group; year 2022 with sessions covering Board
appointed by the shareholders at the
engagement.
54th Annual General Meeting to be held > Assessing the Board’s skill set and bench
QPVJ/CTEJKPVGTOUQH#TVKENG strength to ensure that the required 7 training opportunities were made available
of the Articles of Association of the Bank. balance of skills and experience, to the Directors apart from conducting
independence and knowledge is in place special presentations by imminent
Succession Planning for the Board and its Committees to professionals on matters of importance
The Committee: function effectively; such as economic situation, International
Debt Restructure etc during the year 2022.
> Reviewed the Succession Plans for Key > Ensuring compliance with the Corporate Director training and developments were
Management Personnel and Directors; Governance Code in the conduct of all further supported through Board deep
affairs in the Committee; dives, risk deep dives and functions reviews.
> Continuously assessed the adequacy
of the expertise available at Corporate > Analysing the Organisation chart and skill
Re-election/Re-appointment of
Management level; gaps;
Directors at the 54th Annual General
> Overseeing succession planning for Meeting
> 5RGEKƂECNN[FKUEWUUGFUWEEGUUKQPRNCPU
for critical positions of the Bank and the incumbent MD/CEO and the Board As per the provisions in the Articles of
reviewed potential candidates for those Secretary; Association a director is eligible for re-
roles. election pursuant retirement, after having
> Revised the selection matrix containing served three years since his/her last re-
SWCNKƂECVKQPUGZRGTKGPEGCPFVJGMG[ GNGEVKQPVQVJGQHƂEG(QTVJG[GCTPQ
Board Effectiveness
attributes applicable for promotions director is required to retire by rotation as
The Committee: to and within the Key Management PQPGQHVJGOJCXGEQORNGVGFVJG[GCT
Personnel; requirement.
> Screened the AML/KYC of top 50 voting
shareholders of the Bank;
Director - Dr T K D A Prasad Samarasinghe
who was appointed on 26th October 2022

VQƂNNCECUWCNXCECPE[JCUQHHGTGFJKOUGNH
HQTHQTOCNCRRQKPVOGPVWPFGT#TVKENGQH
the Articles of Association. The appointment
of Dr T K D A Prasad Samarasinghe was
recommended by the Committee and
the Board on 05th August 2022 and 29th
September 2022 respectively.
COMMITTEE EFFECTIVENESS
The performance of the Committee is
reviewed each year as part of the Board
effectiveness assessment. The Committee
completed its self-assessment for the
year 2022, conducted by the Chairman
and Committee Members and the review
concluded that the Committee continues to
operate effectively.
This year review highlights that the

Committee continues to be well constituted
and that the role and the responsibilities are
clear and well understood. The Committee’s
interaction with the Board, Board Sub
Committees and the Management is
considered effective and was pursuing
matters to ensure safe and sound operation
of the Bank in line with the applicable laws
and regulations.
The Committee noted the need to

continuously review the process used in
relation to appointments, the Committee’s
approach to succession planning and how
best to attract a diverse pipeline of potential
Non-Executive Directors.
Devaka Cooray
Chairman
Colombo, Sri Lanka

VJ(GDTWCT[

GOVERNANCE AND RISK
BOARD INTEGRATED RISK MANAGEMENT

COMMITTEE REPORT
MAJOR INITIATIVES IMPLEMENTED IN > Enhanced post loan disbursement

2022 reviews were carried out on the Advances
The unstable economic conditions that Portfolio in order to ensure compliance
prevailed during the year had an impact to Credit Policies and Guidelines.
across the full spectrum of banking activities Observations and learnings were shared
in 2022 and the Committee oversaw the with Business Units and Credit Teams in
implementation of the following initiatives order to ensure qualitative improvements
supporting management of related risks: in Credit underwriting and Credit
Administration process.
Mr Rimoe Saldin INTEGRATED RISK MANAGEMENT > Training sessions were conducted for
Chairman
> Bank’s ICAAP was reviewed during business and credit approvers on the
Board Integrated Risk Management
the year to ensure capital adequacy Bank’s credit policies and guidelines,
Committee
was maintained above minimum best practises and common lapses in
Composition & Meetings regulatory requirements. Stress testing credit underwriting of facilities as well as
The Board Integrated Risk Management was conducted for a number of rescheduling / restructuring of facilities.
Committee (BIRMC) comprised Five (05) variables including asset quality, asset
concentrations, market risk factors etc. > Directions issued by CBSL on
members throughout 2022, of which
Risk appetite statement of the Bank Environment were formalised
Four (04) members were Non-Executive
was also reviewed in order to align with and communicated on Social Risk
Directors as given below:
changes within the macro and micro Management/Sustainable Finance/
economic factors of the country. 5.(45%NCUUKƂECVKQP4GEQIPKVKQPVQVJG
Chairman business teams.
Mr. Rimoe Saldin (NIND/NED) > A series of industry reviews across various
sectors were carried out in order to MARKET RISK
Other Members understand risk levels of these industries
> Treasury limits were reviewed more
> Mr Madu Ratnayake (IND/NED) and recommendations were extended to
frequently in order to assess micro and
business units
> Mr Damien Fernando (NIND/NED) macro-economic- factors on counterparty
Resigned from effect with 25/10/2022 > Conducted series of training sessions limits. Bank’s liquidity and funding needs
> Mr Jonathan Alles (MD/CEO) across business divisions to enhance were periodically reviewed.
> Dr Prasad Samarasinghe (Appointed knowledge of Risk Adjusted Return on
> Stress Testing was carried out regularly
with effect from 26/10/2022 (NIND/ Capital (RAROC) model, market outlook,
to understand the impact to the Bank
NED) good credit governance practices etc.
liquidity position due to non-settlement
> Mr Rasitha Gunawardena (IND/NED) of USD denominated bonds.
CREDIT RISK
Invitees of the Board > Bank’s Baseline Credit and Collateral > Impact analysis on Bank’s capital
Mr Devaka Cooray (IND/NED) Framework policies including the product base was carried out on the possible
– Chairman, Audit Committee Lending policies across Corporate hair cut on Bank’s investment in USD
$CPMKPI5/'/KETQƂPCPEG4GVCKN denominated bonds, USD deposit run,
$TKGHRTQƂNGUQHVJG&KTGEVQTUCTGIKXGP
Banking were reviewed and updated to LKR deposit run and immediate demand
in pages 86 to 91.
ensure they are in line with the current of FC borrowings by overseas lenders
market environment. including identifying strategies to
Management Participants
minimize the impact of these events.
> Mr Ruwan Manatunga - DGM-Risk / > Post COVID-19 Revival Policy was
%JKGH4KUM1HƂEGT established which provides a framework OPERATIONAL RISK
> Mr Neil Rasiah – Acting Head of for identifying and assisting borrowers of
> Fraud Risk Policy and Customer
Compliance Appointed w.e.f. 28th HNB who were affected by the COVID-19
Blacklisting Policy were reviewed to
October 2022 RCPFGOKECPFJCFHCEGFƂPCPEKCN
enhance the coverage to mitigate
> Mr Janath Illangantileke – AGM FKHƂEWNVKGU
emerging risks from changes in socio-
(Compliance) – Resigned from Bank’s economic conditions.
> Credit Approval Structure was reviewed
service w.e.f. 21st October 2022
CICKPUVPGY02#U.4/UƂPFKPIU
> Consolidated Recovery Plan for the
moratorium changes, regulatory changes
Bank was developed to identify credible
and other emerging credit risks to the
options to survive a range of severe and
loan book
plausible stress scenarios.

> Valuation Policy was reviewed to address > Risk covering Privilege Access Activities
Regular Attendees by Invitation the changes in risk appetite of the on databases, operating systems and
> Mr Dilshan Rodrigo Bank and to incorporate industries best applications was reviewed and assessed
- Executive Director/ Chief Operating practices of critical systems.
1HƂEGT
> Outsourced services were reviewed to
> Mr Niroshana Seneviratne COMPLIANCE RISK
identify possible threats and continuation
- DGM - Internal Audit/ Chief Internal of business activities. > Data analytics/AI tools were introduced
Auditor to improve monitoring of alerts
> Mr Rohan Buultjens > Guideline on provisioning and reporting generated by the AML system.
%JKGH6GEJPQNQI[CPF&KIKVCN1HƂEGT of operational losses were reviewed
to maintain the consistency and timely > Review mechanisms were strengthened
> Ms Dilunika Jayasinghe
reporting of operational losses. on compliance audits carried out
- Chief Manager - Credit Risk
covering critical areas in branches and
(Promoted to the grade of AGM since
> Business Continuity Management process departments of the Bank.
March 2022)
was evaluated to monitor the resilience
> Mr Sampath Weerasinghe of DR drills covering mission critical units > Quarterly group reviews on risk,
- Senior Manager - Integrated Risk and systems to ensure their resilience. EQORNKCPEGƂPCPEGCPFCWFKVYGTG
implemented to ensure regular
Secretary to the Committee > Bank’s Operational Risk Management monitoring of compliance risk of Group
Mr Ruwan Manatunga Framework was strengthened in line with subsidiaries.
s&)/s4KUM%JKGH4KUM1HƂEGT the current operating model and best
practices. LOOKING AHEAD
Eligible to attend
/Attended > Business Continuity Policy was The following key initiatives have been
Dr Prasad Samarasinghe 1/ 0* reviewed to incorporate risks related to KFGPVKƂGFHQTKORNGOGPVCVKQPKP
Mr Rashitha Gunawardena 10/10 continuation of business due to emerging
developments in macro and micro Credit risk
Mr Jonathan Alles 11/ 0 economic fronts such as shortages in > The Bank closely works with the impacted
Mr Damian Fernando 10/10 various supplies, social unrest etc. customers to understand their business
Mr Madu Ratnayake 11/9 EJCNNGPIGUCPFECUJƃQYEQPUVTCKPVU
Mr Dilshan Rodrigo 11/11** IT & CYBER RISKS in order to support these businesses
in their revival by way of facilitating to
Mr Devaka Cooray 11/10** > Risk Assessment Methodology & Risk
expand their customer base through
Mr Rimoe Saldin 11/11 Acceptance Criteria was introduced for
linking them with supply chains of large
the area of IT/cyber risk which is in line
* (Alternate Director to Mr. Damien corporates, offering digital solutions to
with the ISO 27001 standard.
Fernando upto 25.10.2022 and expand their sales and collection points,
Director w.e.f. 26.10.2022) > Process for the cyber risk unit to conduct advisory services etc. Where required the
** Meetings attended by Invitation regular security vulnerability assessments Bank also restructures customer facilities
(after being appointed as a Director) & application security testing was at an early stage to enable customers
established to support Bank wide L2 to service their bank liabilities based on
technical reviews, security projects testing VJGKTHQTGECUVECUJƃQYU
and technology implementations.
> Develop predictive models to carry out
> Business units and branch network were analytics on the Bank’s loan portfolios
engaged to assess the technology & across businesses and products to
processes in order to identify security identify early warning signals of building
vulnerabilities and to enhance security up of portfolio stress.
awareness among the staff members.
> Support the Rollout of the second phase
> Policies on information and cybersecurity of the Loan Origination System for
was reviewed to deal with emerging Corporate and SME businesses.
risks and assessed risks with regard to
> Upgrade and integrate enhanced IRR
the Bank’s information and cybersecurity
assessment models across all businesses
metrics against embedded and emerging
to their respective loan origination
risks.
modules.

GOVERNANCE AND RISK
BOARD INTEGRATED RISK MANAGEMENT

COMMITTEE REPORT
> Formalise evaluation standards by IT & cyber risk SUMMARY OF BIRMC CHARTER
introducing guidelines for project > Implement an End Point Detection & Establishing a risk management framework
ƂPCPEGQXGTUGCUNGPFKPICPFXCNWGEJCKP Response (EDR) solution to enhance that proactively supports the assessment,
ƂPCPEKPI security of data and to detect anomalous evaluation, monitoring and management of
FKIKVCNVTCHƂECPFCPQOCNQWUDGJCXKQWTCN risks, whilst creating a strong risk culture and
Market risk activity in the Bank’s IT systems. supporting the Bank’s strategic objectives.
> Review caps, loss limits, measurement of Decisions are made in compliance with the
volatility of forex and securities. > Strengthen L2 cyber risk assessment Bank’s Internal Risk Policy guidelines and
function by increasing engagements with regulatory supervisory requirements and
> Review and structure Treasury limits business units. corrective actions are taken to mitigate risks
HQTEQPUKFGTKPIVJGRQUUKDNGTKUMU taken beyond the risk tolerance set by the
current market and economic challenges > Implementation of a new data Committee.
/ impact on debt restructuring etc. ENCUUKƂECVKQPVQQNKPQTFGTVQRTQXKFG
ENCUUKƂECVKQPQHFKIKVCNFQEWOGPVU
> The Committee comprising the MD, and emails via various communication PRIMARY RESPONSIBILITIES OF BIRMC
COO, CRO, CFO, DGM-Treasury and channels. The terms of reference set out by the Board
business heads hold fortnightly meetings of Directors, include the following:
to review the liquidity position of the > Alignment of Bank’s security processes
Bank and to take necessary strategies to and controls against NIST Cyber Security > Ensure that the Bank and its subsidiaries
ensure liquidity positions of the Bank are Framework have an enterprise wide comprehensive
healthy. risk management framework,
> Implementation of cyber security strategy appropriate compliance policies and risk
> Carrying out aggressive deposit with mid & long-term plans to strengthen management systems in place.
campaigns in order to mobilize LKR and security control environment.
USD deposits. > Assess all risk types, including but not
> Conduct Bank wide security risk limited to, credit, market, liquidity,
> Encourage worker remittances by offering assessments in order to cover various operational and strategic, reputational
attractive exchange rates and arranging technology aspects and business risks, information and cybersecurity risks
deposit campaigns overseas. processes. to the Bank and that they are managed
through appropriate risk indicators and
> Secure new to bank export customers by > Enhancing the scope of security management information and established
offering competitive lending rates and monitoring via 24x7 Security Operations mitigants.
advisory services to explore new markets. Centre (SOC) functions to include more
granular level analysis on cyber threats. > Ensure risk assessment and mitigating
> Engaging with overseas counterparts for actions are taken in accordance with
fresh USD funding lines. Group risk established delegated authority and
> Further Strengthen periodic assessment corrective actions are taken to manage
Liquidity risk of Group risk and compliance monitoring risks taken beyond the risk tolerance set
> Increase scope and rigour of stress covering Liquidity, Capital, Compliance, by the Committee, based on the Bank’s
testing to be better aligned with the Cyber and Operational Risks. policies, the Board’s risk appetite and
regulatory Liquid Coverage Ratio. regulatory and supervisory requirements.
Compliance risk
> Monitor and assess the effectiveness of
Operational risk > Enhance monitoring of Trade Based the Bank’s risk management system and
> Implement a Governance, Risk and, Money Laundering by monitoring dual the robustness of the risk management
Compliance (GRC) system to strengthen usage of goods and vessel tracking, by monitoring metrics in both embedded
operational risk monitoring. linking the Dow Jones data base to the and forward risks.
trade core banking system through API
> Implement the Computation method of connections. > Assess Periodically performance against
Risk Weighted values for operational risk VJGFGƂPGFTKUMCRRGVKVGCPFTKUMIQCNU
from the current Basic Indicator Approach > Implement ITRS project (International set for the Bank.
(BIA), to the Alternative Standardized Transaction Reporting System) initiated
Approach (ASA). by the CBSL to automate various > Review issues raised by internal audit that
international, trade and treasury related impact the Bank’s risk metrics and refer
reports. to the Board Audit Committee (BAC) any
matters that have come to the attention

of the Committee that require the #URGT5GEVKQP

X
IQHVJG$CPMKPI#EV
Committee’s action. No. 11 of 2007 on Corporate Governance
for Licensed Commercial Banks, the BIRMC
> Review compliance on the Basel III submits a Risk Assessment Report within
guidelines and provide risk insights on a week of each meeting to the Board of
SLFRS 9 implementation. Directors in order to seek the Board’s views,
EQPEWTTGPEGCPFQTURGEKƂEFKTGEVKQPUQP
> Examine any other matters referred to it, material risks deliberated.
by the Board.
PROFESSIONAL ADVICE
OTHER RESPONSIBILITIES OF THE
COMMITTEE The BIRMC is authorised to obtain legal or
other professional advice internally and/
The BIRMC also supports the Board or from outside the Bank, as and when
QH&KTGEVQTUKPHWNƂNNKPIKVUQXGTUKIJV considered necessary, at the Bank’s expense.
responsibilities relating to compliance The Committee may also seek the views of
matters. In this capacity, the Committee other Board sub committees as required
reviews the implementation of compliance and may inform them of any relevant
programs, policies and procedures that procurements that may be of relevance to
are designed to respond to the various their mandates.
compliance and regulatory risks of the Bank.
The Committee also reviews and monitors
the Bank’s compliance report on money COMMITTEE EVALUATION
laundering and action taken in relation to it. The self-assessment of the BIRMC by its
Committee members was carried out in
The Committee is also responsible to review ,CPWCT[CPFVJG%QOOKVVGGCITGGFQP
and refer for action to any subcommittee of CpUCVKUHCEVQT[qTCVKPIUEQTG#TGCUKFGPVKƂGF
VJG$QCTFOCVVGTUVJCVCTGGKVJGTURGEKƂECNN[ for improvement are addressed.
referred to the attention of the Committee,
or that comes to the attention of the
%QOOKVVGGHTQO$QCTFƂNKPIUVJCVKORCEV
systemic risks to the Bank, with a clear
QDLGEVKXGQHGNKOKPCVKPITGRGCVƂPFKPIUQT
managing forward risks.
COMPLIANCE
The BIRMC was established as a Committee Rimoe Saldin
of the Board, in compliance with Section Chairman

QHVJG$CPMKPI#EV&KTGEVKQP0Q Board Integrated Risk Management
of 2007, on Corporate Governance for Committee
Licensed Commercial Banks in Sri Lanka. The
composition and the scope of work of the Colombo, Sri Lanka
Committee conform with the provisions of
VJ(GDTWCT[
this direction.
The Bank has adopted an Integrated Risk

Management (IRM) framework in line with
the Central Bank of Sri Lanka (CBSL) Banking
Act Direction No 7 of 2011. Further, the
BIRMC has adopted Basel III guidelines
issued under the Banking Act No 01 of 2016
as well and continues to improve the Bank’s
adherence to these guidelines.

GOVERNANCE AND RISK
BOARD AUDIT COMMITTEE REPORT
SIGNIFICANT ACCOUNTING > Review Bank’s compliance with relevant

JUDGEMENTS CONSIDERED DURING legal, regulatory and accounting
2022 UVCPFCTFUCPFFKUEWUUVJGUKIPKƂECPV
During the year, the Committee reviewed ƂPCPEKCNTGRQTVKPIKUUWGUCPFLWFIGOGPVU
key assumptions and judgements including in the preparation and presentation
following areas; of Financial Statements, external
reports, and periodical evaluation of
> Loan Impairment Allowances and
the effectiveness of such compliance
related Management Overlay, taking
processes.
in to consideration the high degree of
Mr Devaka Cooray uncertainty that characterizes the internal > Exercise independent oversight of the
Chairman economic environment and its potential Bank’s assurance functions, including
Board Audit Committee KORCEVQPUKIPKƂECPVKPETGCUGKPETGFKV external & internal audit and ensure the
risk independence and effectiveness of both
Composition & Meetings external & internal audit functions.
The Board Audit Committee comprises > Impairment Allowances for Government
Bonds > 'XCNWCVGVJGCFGSWCE[GHƂEKGPE[CPF
of four (04), Non-Executive Directors, of effectiveness of the governance process.
whom three including the Chairman are > Recognition of Deferred Tax on
Impairment Charges > Engagement of independent advisors
Independent Directors.
for specialized functions where deemed
> Actuarial Valuation of Pension Liability
necessary.
Chairman > Tax Provisions
> Approve and review the Annual Internal
Mr Devaka Cooray (IND/NED) > Going Concern, taking in to consideration Audit Plan and review the internal audit
the high degree of uncertainty relating reports and liaising with the Bank’s
Other Members to the current economic conditions Corporate Management to ensure
> Mr Osman Chandrawansa (IND/NED) prevailing in the country that precautionary measures are taken
> Carrying Value of Investments in Group to minimize and control weaknesses,
> Mr Rasitha Gunawardana (IND/NED)
Companies procedure violations, frauds and errors.
Appointed w.e.f. 21st January 2022
> Valuation of Financial Instruments
> Mr Kithsiri Gunawardena (NIND/NED) AUTHORITY OF THE COMMITTEE
Appointed w.e.f. 21st January 2022
CHARTER OF THE COMMITTEE The BAC is empowered to investigate
> Mr Rimoe Saldin (NIND/NED) any matter as deemed necessary with
The Board Audit Committee (BAC)
Resigned w.e.f. 21st January 2022 unrestricted access to records, data, reports
assists the Board in the discharge of its
responsibilities by exercising structured, and to management and staff, to obtain
(IND- Independent Director, NIND -
relevant information considered necessary in
Non Independent Director, NED - Non U[UVGOCVKEQXGTUKIJVQXGTVJG$CPMoUƂPCPEKCN
reporting, internal audit, internal controls the discharge of duties and responsibilities.
Executive Director)
and external audit practices. The Board The BAC may also engage independent
$TKGHRTQƂNGUQHVJG&KTGEVQTU CRRTQXGF$#%%JCTVGTENGCTN[FGƂPGUVJG counsel and/or other advisors, if deemed
representing the committee are given Terms of Reference (TOR) of the Committee necessary.
on pages 86 to 91. and regulates the purpose, composition,
duties, responsibilities and investigative ACTIVITIES IN 2022
authority of the BAC. The Board Audit Committee (BAC) met
nine (09) times during the year, where all
KEY RESPONSIBILITIES OF THE Meetings were held virtually through MS
COMMITTEE Teams. The Engagement Partner of the
Key responsibilities include; Bank’s external audit attended Committee
meetings. Apart from the regular attendees
> Monitor and review adequacy and from the management, the Committee
effectiveness of Bank’s policies with invited Members of the Bank’s Senior
respect to risk assessments and risk Management team to participate in
OCPCIGOGPVQHƂPCPEKCNTGRQTVKPI meetings on needs basis. Minutes of the
processes and internal control systems in proceedings of the BAC meetings are
order to provide accurate, appropriate periodically reported to the Board.
and timely information to the Board,
regulatory authorities, management and Activities of the Audit Committee during
other stakeholders. 2022 are summarised under the focus areas
below.

FINANCIAL REPORTING The BAC reviewed and recommended
Regular Attendees by Invitation 6JG$#%TGXKGYGFVJG$CPMoUƂPCPEKCN annual and quarterly Financial Statements
Mr Jonathan Alles - Managing Director/ reporting process on behalf of the Board to the Board for approval, along with
%JKGH'ZGEWVKXG1HƂEGT to ensure that Financial Statements are management discussion and analysis, prior
prepared in accordance with the Bank’s to publishing the same.
Mr Dilshan Rodrigo - Executive
&KTGEVQT%JKGH1RGTCVKPI1HƂEGT accounting records, in compliance with
The Committee assessed and monitored
Dr Niroshana Seneviratne - Chief regulatory provisions including the Sri Lanka
the adequacy, effectiveness and progress
Internal Auditor/DGM (Internal Audit) Accounting Standards, Companies Act No
of Bank’s reconciliation processes through
QHCPF$CPMKPI#EV0QQH
Mr Ruwan Manatunga - Chief Risk CPFCOGPFOGPVUVJGTGVQCPFTGƃGEVCVTWG
RGTKQFKEWRFCVGURTQXKFGFD[VJGƂPCPEG
1HƂEGT&)/
4KUM team.
CPFHCKTXKGYQPVJGƂPCPEKCNRQUKVKQPCPF
Mr Rajive Dissanayake - Chief Financial performance of the Bank. The Committee met with the Chief Financial
1HƂEGT 1HƂEGTVYKEG
FWTKPIVJG[GCTKPVJG
Mr Rohan Buultjens - Chief Technology 6JG$#%UCVKUƂGFKVUGNHVJCVCEEQWPVKPI
absence of Key Management Personnel to
policies and practices are appropriate, and
CPF&KIKVCN1HƂEGT ensure the transparency and independence
adequate internal controls and procedures
Mr Sivarajah Nandakumar - AGM are in place to provide reasonable assurance
QHVJGƂPCPEKCNTGRQTVKPIHWPEVKQPQHVJG
(Operations) Bank.
VJCVVJGƂPCPEKCNTGRQTVKPIU[UVGOKU
Mr Neil Rasiah - Acting Head of effective and well managed to provide
Compliance - Appointed w.e.f. 28th reliable and timely information. EXTERNAL AUDIT
October 2022 The Audit Committee assists the Board in
Mr Janath Ilangantileke - AGM The BAC reviewed the impact of the assessing the independence, evaluating the
CEEQWPVKPIVTGCVOGPVQPUKIPKƂECPVTKUMU performance of the External Auditors and
(Compliance) - Resigned from Bank’s
service w.e.f. 21st October 2022 & uncertainties and key estimates & making recommendations for engagement
LWFIGOGPVUOCVGTKCNVQVJG$CPMoUƂPCPEKCN of the External Auditor. The Committee
The Engagement Partner of Messrs. reporting and whether disclosures made
KPMG (External Auditor) attended carried out the following activities in
KPVJGRWDNKUJGFƂPCPEKCNUVCVGOGPVUYGTG discharge of its duties in this regard;
eight (8) meetings and the Chairman of adequate, appropriate and fair.
the BIRMC also attended meetings by
> Assisted the Board in engaging the
invitation. During the year, BAC placed additional External Auditor for audit services, in
focus on the assessment of adequacy of compliance with regulatory provisions.
Secretary to the Committee provision for Expected Credit Loss (ECL)
> Monitored and assessed the
The Chief Internal Auditor, Dr Niroshana recognized in the Financial Statements
independence, objectivity and
Seneviratne functions as the Secretary based on the internal models which were
effectiveness of the External Auditor
to the Board Audit Committee. TGƂPGFFWTKPIVJG[GCTYKVJWRFCVGF
during the year 2022.
underlying assumptions, management
overlays computed outside the model > Discussed the audit plan, scope and the
Meetings
based on the stress testing relating to the methodology proposed to be adopted
Membership attendance details of in conducting the audit with the External
exposures to risk elevated sectors, and
Meetings held during 2022 are as Auditor prior to commencement of the
adjustments made to economic factors to
follows; annual audit.
incorporate the adverse macro-economic
Eligible to attend EQPFKVKQPUUWEJCUUKIPKƂECPVXQNCVKNKV[KP > Discussed all relevant matters arising
/Attended GZEJCPIGTCVGUKPVGTGUVTCVGUKPƃCVKQPCPF HTQOVJGKPVGTKOCPFƂPCNCWFKVUVQIGVJGT
Mr Devaka Cooray (IND/NED) 9/9 GDP growth rates. with the Management Letter and
Mr Osman Chandrawansa management responses thereto.
(IND/NED) 9/9 The BAC discussed and monitored the
> The Audit Committee met with the
steps taken by the management to align the
Mr Rasitha Gunawardana engagement partner of the External
internal processes and systems to comply
(IND/NED) 9/9 Auditor twice (2) during the year, in the
YKVJ&KTGEVKQP0QCPFQHKUUWGF
Mr Kithsiri Gunawardena absence of Key Management Personnel
by the Central Bank of Sri Lanka on 14th
(NIND/NED) 9/9 to ensure that there were no limitations
September 2021 which become effective
of the scope in relation to the audit and
from 1st January 2022 and will continue
to allow for full disclosure of any incidents
to focus on the internal control framework
which could have had a negative impact
relating to the new processes during the
on the effectiveness of the external audit.
[GCT
The Committee concluded that there was
no cause for concern.

GOVERNANCE AND RISK
BOARD AUDIT COMMITTEE REPORT
> The Committee reviewed the Non-Audit UKIPKƂECPVOCVVGTUDGKPIJKIJNKIJVGFD[ WHISTLE-BLOWING

Services provided by the auditor against the Internal Audit Department. The Committee reviewed concerns
the Policy on non-audit services, to > The BAC periodically reviewed and raised with regard to actual or suspected
ensure such functions do not fall within FKUEWUUGFVJGMG[ƂPCPEKCNKUUWGUQH frauds, violations or any other serious
the restricted services and provision group companies during the year, with infringement of rules / policies of the Bank.
of such services would not impair the a view of identifying and managing The Committee ensured independent
External Auditors’ independence and associated risks in order to maintain the investigations on such matters, while
objectivity. UOQQVJƃQYQHQRGTCVKQPU OCKPVCKPKPIVJGEQPƂFGPVKCNKV[QHVJGKFGPVKV[
of the person raising the concern.
RISKS AND INTERNAL CONTROL INTERNAL AUDIT
> Continued to assess the adequacy, > The Committee continuously TRAINING AND DEVELOPMENT OF
GHƂEKGPE[CPFGHHGEVKXGPGUUQHVJG$CPMoU TGXKGYGFCPFUCVKUƂGFKVUGNHYKVJ COMMITTEE MEMBERS
internal control systems. The Committee the independence, objectivity and
Members of the Committee attended
UCVKUƂGFKVUGNHVJCVCFGSWCVGEQPVTQNU effectiveness of the internal audit function
presentations made by consultants and
and procedures are in place to provide as the third line of defence.
Key Management Personnel. Members
reasonable assurance to the effect that > The Committee reviewed the internal also attended seminars, conferences and
the Bank’s assets are safeguarded. audit reports, investigation outcomes, workshops as part of their continuous
> Assessed through the internal audit UVCVWUQHUKIPKƂECPVƂPFKPIUCNQPI professional development.
function that reports directly to the with recommendations, management
Audit Committee, the effectiveness of responses and status of implementations
on a regular basis, in order to satisfy Itself COMMITTEE EVALUATION
VJG$CPMoUKPVGTPCNEQPVTQNQXGTƂPCPEKCN
TGRQTVKPICUCVUV&GEGODGTCU on the adequacy and effectiveness of the The annual evaluation of the Committee
TGSWKTGFD[VJGUGEVKQP

KK
DQHVJG Bank’s internal controls system. was conducted by the Independent Non-
Banking Act Direction No 11 of 2007 > Ensured the adequacy and coverage of Executive Chairman, with contributions from
on Corporate Governance for Licensed the annual audit plan for the year, which individual assessments by the Members of
Commercial Banks in Sri Lanka and based was prepared on risk-based planning the Audit Committee, Managing Director/
on the “Guidance for Directors of Banks methodology along with the frequency of CEO, Executive Director/COO, Chief
on the Directors’ Statement on Internal pre-planned reviews. (KPCPEKCN1HƂEGT%JKGH+PVGTPCN#WFKVQTCPF
Control” issued by the Institute of other regular invitees in accordance with
> Assessed and addressed the Internal international best practices and was deemed
Chartered Accountants of Sri Lanka (CA Audit Department’s resource
Sri Lanka). Furthermore, External Auditor to be satisfactory.
requirements including succession
has issued an Assurance Report on planning.
Directors’ Statement on Internal Control
> 4GXKGYGFCPFUCVKUƂGFKVUGNHYKVJVJG
over Financial Reporting.
performance of the Chief Internal Auditor
> 6JG$#%KUUCVKUƂGFCUVQVJGTGNKCDKNKV[ and other senior staff members of the
of the system as disclosed on pages 167 Internal Audit Department.
and 168, Directors’ Statement on Internal
> Reviewed and approved the revisions
Control over Financial Reporting. BAC Devaka Cooray
made to the Internal Audit Charter during
EQPƂTOUVJCVVJGTGRQTVIKXGPKPRCIG
the year. Chairman
169 does not suggest any fundamental
concerns over the control framework or > Continuously monitored and guided Board Audit Committee
procedures. the Internal Audit Department on the
execution of the annual Internal Audit Colombo, Sri Lanka
> 4GXKGYGFVJGRTQEGUUGUHQTKFGPVKƂECVKQP
Plan amidst challenging conditions faced VJ(GDTWCT[
recording, evaluation and management
during the year.
QHCNNUKIPKƂECPVTKUMUQHVJG$CPM6JG
BAC receives regular reports from the > Two (02) independent discussions were
Chief Internal Auditor on appraisal of held with the Chief Internal Auditor, in the
systems of internal controls across these absence of Key Management Personnel
risk types and areas of operation of to ensure independence of the Internal
the Bank and setting out the internal Audit Department’s operations.
audit function’s view of the control
environment. Reports also include
summary highlights of the most

*a¯*$΄¯Ô΄¯k¢¯Ntk¢΄*ÍN*Î΄
COMMITTEE REPORT
KEY INITIATIVES IMPLEMENTED SCOPE OF OPERATIONS

DURING 2022 The principal function of the Committee is
Expanded training and awareness on VJGTGXKGYXGTKƂECVKQPCPFUETWVKP[QHCNN
Related Party Transactions (RPTs) guidelines transactions with directors, Key Management
by conducting training programmes for Personnel (KMPs), substantial shareholders,
branch personnel. subsidiaries and associate companies of the
Bank and those substantial shareholders
The related party transactions policy CPFQVJGTTGNCVGFRCTVKGUCUFGƂPGFKPVJG
document was reviewed and revised taking “Code” and to determine and ensure that
into consideration changes which occurred they have not received more favourable or
Mr Devaka Cooray
Chairman
since the previous revision. preferential consideration vis a vis the other
Related Party Transactions Review shareholders and customers of the Bank
Committee SUMMARY OF THE ‘TERMS OF and thus all dealings have been done in
REFERENCE’ (TOR) OF THE RELATED conformity with the “Code”.
Composition & Meetings
PARTY TRANSACTIONS REVIEW
The Related Party Transactions Review COMMITTEE In discharging the above responsibilities, the
Committee (RPTRC) comprised four Committee relies on the integrity of periodic
The Related Party Transactions Review related party transactions data sourced via
members, of whom three including the
Committee is governed by the ‘Terms of the following:
Chairman are Independent Directors:
Reference’ approved by the Bank’s Board
QH&KTGEVQTU6JGUVCVWVQT[CPFƂFWEKCT[ > Comprehensive list of related parties
Chairman responsibilities of such Committee are based on latest available declarations,
Mr Devaka Cooray (IND/NED) those as envisaged in the ‘Code of Best signed by the responsible Directors/
Practices on Related Party Transactions’ KMPs.
Other Members published by the Securities and Exchange
> Mr Jonathan Alles (MD/CEO) Commission of Sri Lanka (the “Code”), > 4GNCVGFRCTV[VTCPUCEVKQPUEQPƂTOGFD[
regulations promulgated by the Colombo the business heads to the Committee.
> Mr Osman Chandrawansa (IND/NED)
Stock Exchange (“The CSE Rules”), Financial
> Mr. Nihal Jayawardene (NIND/NED) Reporting under Sri Lanka Accounting > The quarterly reporting to RPTRC which
Standard LKAS 24, Banking Act Direction Is under the responsibility of business
(IND/NED) – Independent Non-
No: 11 of 2007 on Corporate Governance heads, is in turn further reviewed by the
Executive Director, (NIND) - Non
of Licensed Commercial Banks in Sri Lanka Head of Finance who is the ultimate
Independent Director, (MD/CEO) -
and ‘Code of Best Practices on Corporate reporting authority to the Committee
Managing Director and Chief Executive
Governance 2017’, issued by the Institute of as well as its secretary. This review
1HƂEGT
Chartered Accountants of Sri Lanka. is carried out by comparing related
party transactions with bench - marked
Other Directors The TOR also spells out the constitution criteria applicable for comparable non
> Mr Dilshan Rodrigo – Executive and the composition of the Committee; related party transactions, to verify and
&KTGEVQT%JKGH1RGTCVKPI1HƂEGT that the chairman should be a Non - determine that related parties have not
$TKGHRTQƂNGUQHVJG&KTGEVQTUCTGIKXGP Executive Independent Director, and the received more favourable nor preferential
on pages 86 to 91 in this report. Committee should meet at least once in consideration, based on the reports
every quarter. It also sets out the guidelines submitted by the business heads to the
on related party transactions and its Committee.
reporting requirements. As per the TOR,
the Committee can directly access required The Bank’s Internal Audit Division is also
data and information in order to discharge mandated to periodically verify the integrity
its duties and responsibilities and when of reported data by carrying out audit
necessary, the Committee has the right to checks, to ensure greater transparency.
obtain appropriate opinions from external
specialists. As stated previously, wherever necessary,
the Committee is empowered to obtain
The TOR is subject to periodic review KPFGRGPFGPVNGICNƂPCPEKCNCPFVGEJPKECN
based on regulatory as well as operational CFXKEGHTQOURGEKCNKUVUKPUWEJƂGNFUVQ
requirements. During the year 2022, the TOR review and determine transactions. Apart
was amended to accommodate desired from obtaining independent specialists’
changes. advice wherever necessary, the Committee
has access to data and information
pertaining to related parties as well as the

GOVERNANCE AND RISK
RELATED PARTY TRANSACTIONS REVIEW

COMMITTEE REPORT
CDKNKV[VQECNNHQTENCTKƂECVKQPUHTQOVJG
Management Participants management and auditors (External and
> Ms K A L Thushari Ranaweera – DGM Internal) on any allied matter.
- (Legal)/Board Secretary
The Committee has reviewed the related
> Ms Anuradhi Delage – Head of party transactions reported by the business
Finance/Secretary to the Committee heads and the comments /observations
> Mr Neil Rasiah – Acting Head of made during such reviews if any, have been
Compliance Appointed w.e.f. 28th communicated to the Board of Directors.
October 2022
In addition, the Committee shares
> Mr Janath Illangantileke – AGM
information with the Board Audit Committee
(Compliance) – Resigned from Bank’s
whenever necessary and appropriate to
service w.e.f. 21st October 2022
facilitate the Board Audit Committee
> Ms Angelina Dharmaraj – Head of to conduct its Statutory and Regulatory
Centralized Credit Administration responsibilities with regard to related party
transactions.
In addition, the Committee summons
QVJGTTGNGXCPVQHƂEKCNUQHVJG$CPMVQ
participate in Committee proceedings SELF-APPRAISAL OF COMMITTEE
on a ‘need basis’ FUNCTIONS
An annual self-evaluation of the
Secretary to the Committee
effectiveness of the Committee is
The Bank’s Head of Finance functions conducted by the Chairman of the
as the secretary to the Related Party Committee with contributions by way of
Transactions Review Committee. individual assessments by the members
of the Committee, Managing Director/
Meetings CEO, participating KMPs referred to at the
In accordance with the terms of outset of this report and the review for 2022
reference, the Committee meets concluded that the Committee continues to
whenever necessary, but not less than operate effectively and competently.
four (4) times a year, once in every three

OQPVJUCUUVKRWNCVGFKPVJG5GEWTKVKGU 0QVGVQVJGƂPCPEKCNUVCVGOGPVUQP
and Exchange Commission of Sri Lanka RCIGUVQUGVQWVVJGKPHQTOCVKQP
(SEC) Guidelines. During 2022, four required on related party transactions. In the
(4) such meetings were held and the opinion of the Committee, there were no
minutes were circulated to the Board transactions with related parties which were
of Directors for their information and more favourable nor preferential during the
review. period under review and the Bank had been
compliant with the Code.
Membership attendance details of
meetings held during 2022 are as
follows:
Eligible to attend
/Attended
Mr Devaka Cooray 4/4
Mr Osman Chandrawansa 4/4 Devaka Cooray
/T0KJCN,C[CYCTFGPC Chairman
Mr Jonathan Alles 4/4 Related Party Transactions Review
Committee
Colombo, Sri Lanka

VJ(GDTWCT[

DIRECTORS’ STATEMENT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
RESPONSIBILITY with relevant accounting principles and the Board Audit Committee Report on page
The Board of Directors present this regulatory requirements. 162 to 164 in this report.
statement on Internal Control Over Financial
The Board Integrated Risk Management
Reporting of the Bank in accordance with KEY INTERNAL CONTROL PROCESSES
Committee (BIRMC) is established to
5GEVKQP

KK
DQH$CPMKPI#EV&KTGEVKQP The key processes that have been assist the Board to oversee the overall
No: 11 of 2007, and principle D.1.5. of established in reviewing the adequacy and management of principal areas of risk of
the Code of Best Practice on Corporate integrity of the system of internal controls the Bank. The Executive Risk Management
Governance issued by the Institute of include the following: Committee which includes representation
Chartered Accountants of Sri Lanka.
from all key business and operating units
The Board Sub Committees are established of the Bank, assists the Board with the
The Board of Directors (‘Board’) is to assist the Board in ensuring:
responsible for the adequacy and implementation of policies advocated at
effectiveness of Hatton National Bank PLC’s > the effectiveness of the Bank’s daily BIRMC.
(‘the Bank’) system of internal controls. It is operations.
Operational committees have also been
designed to manage the Bank’s key areas > that the Bank’s operations are in established with appropriate empowerment
QHTKUMYKVJKPCPCEEGRVCDNGTKUMRTQƂNGCPF accordance with the Bank’s declared to ensure effective management and
does not eliminate the risk of failure to objectives and strategies. supervision of the Bank’s core areas of
achieve the business objectives and policies
business operations. These committees
of the Bank. Accordingly, the system of > that the operations of the Bank are in
include the Human Resource Management
internal controls can only provide reasonable line with the annual budget as well as the
Committee, Assets and Liability Committee,
but not absolute assurance against material policies and business directions that have
the Information Technology Steering
OKUUVCVGOGPVQHOCPCIGOGPVCPFƂPCPEKCN been approved by the Board.
Committee, Executive Risk Management
KPHQTOCVKQPCPFTGEQTFUCICKPUVƂPCPEKCN
The Internal Audit Division of the Bank and Credit Policy Committee and the
losses or fraud.
checks for compliance with policies and Operational Risk Steering Committee.
The Board has established an on-going procedures and the effectiveness of the
In assessing the internal control system over
process for identifying, evaluating, and internal control systems and highlights
ƂPCPEKCNTGRQTVKPIKFGPVKƂGFQHƂEGTUQHVJG
OCPCIKPIVJGUKIPKƂECPVTKUMUHCEGFD[VJG UKIPKƂECPVƂPFKPIUKPTGURGEVQHCP[PQP
Bank collated all procedures and controls
Bank and this process includes enhancing compliance. Audits are carried out on
VJCVCTGEQPPGEVGFYKVJUKIPKƂECPVCEEQWPVU
the system of internal controls as and majority of the units and branches, the
CPFFKUENQUWTGUQHVJGƂPCPEKCNUVCVGOGPVU
when there are changes to the business frequency of which is determined by the
of the Bank. These, in turn, were observed
environment or regulatory guidelines. level of risk assessed by the internal audit,
and checked by the Internal Audit Division
to provide an independent and objective
The process is regularly reviewed by the for suitability of design and effectiveness on
report on the operational and management
Board in accordance with the guidance an on-going basis. This assessment did not
activities of these units and branches. The
for Directors of Banks on the Directors’ include Subsidiaries of the Bank.
annual audit plan is reviewed and approved
Statement on Internal Control issued by by the Board Audit Committee and the The Bank adopted SLFRS 9 – “Financial
the Institute of Chartered Accountants of ƂPFKPIUQHVJGCWFKVUCTGUWDOKVVGFVQVJG Instruments” in 2018 which became
Sri Lanka (CA Sri Lanka). As per the said Board Audit Committee for review at their CRRNKECDNGHQTƂPCPEKCNTGRQTVKPIRGTKQFU
IWKFCPEGRTQEGUUGUCHHGEVKPIUKIPKƂECPV periodic meetings. beginning on or after 1st January 2018.
accounts of the Bank were assessed along
6JG$CPMEQPVKPWGFVQTGƂPGVJGUVCVKUVKECN
with the key risk areas. The Board Audit Committee of the Bank
models used in the computations of
approves the annual audit plan, reviews
The management assists the Board in the Expected Credit Loss (ECL) and the data
KPVGTPCNEQPVTQNKUUWGUKFGPVKƂGFD[VJG
implementation of the Board’s policies extraction procedures pertaining to the
Internal Audit Division, the external auditors,
and procedures on risk and control by calculations performed in respect of SLFRS
regulatory authorities and management; and
identifying and assessing the risks faced by 9. Since the adoption of this standard,
evaluates the adequacy and effectiveness
the Bank, and in the design, operation, and progressive improvements on processes
of the risk management and internal control
monitoring of suitable internal controls to to comply with new requirements of
systems. They also review the internal audit
mitigate and control these risks. ENCUUKƂECVKQPGUVKOCVKQPQHGZRGEVGF
function with particular emphasis on the
credit losses and disclosures were made
scope of the audits and quality of same.
The Board is of the view that the system of whilst, further strengthening of processes
The minutes of the Board Audit Committee
internal controls in place is sound and robust continued to support the estimation of
meetings are tabled for the information of
to provide reasonable assurance regarding the Board on a periodic basis. Further details
GZRGEVGFETGFKVNQUUCPFƂPCPEKCNUVCVGOGPV
VJGTGNKCDKNKV[QHƂPCPEKCNTGRQTVKPICPF disclosures.
of the activities undertaken by the Board
VJCVVJGRTGRCTCVKQPQHƂPCPEKCNUVCVGOGPVU Audit Committee of the Bank are set out in
for external purposes is in accordance 6JGGZKUVKPIOQFGNUYGTGHWTVJGTTGƂPGF
this year to validate the appropriateness of

GOVERNANCE AND RISK
DIRECTORS’ STATEMENT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING
the underlying assumptions, incorporate the The recommendations made by the external VJGRTGRCTCVKQPQHƂPCPEKCNUVCVGOGPVU
potential implications of the macroeconomic auditors in connection with the internal for external purposes has been done in
conditions prevailing in the country through control system in previous years were accordance with Sri Lanka Accounting
post model adjustments ,based on stress reviewed during the year and appropriate Standards and regulatory requirements of
testing the exposures to risk elevated steps have been taken to implement those. the Central Bank of Sri Lanka.
sectors and adjustments made to economic
factors. The Management has made many changes
REVIEW OF THE STATEMENT BY
to the internal processes and systems to
EXTERNAL AUDITORS
Considering the complexity involved comply with Direction No 14 of 2021 issued
in the computation of ECL from Loans by the Central Bank of Sri Lanka on 14th The external auditors, Messrs KPMG, have
and Advances, the Bank will continue September 2021 which became effective reviewed the above Directors’ Statement on
to strengthen the process with system - from 1st January 2022 and will continue to Internal Control Over Financial Reporting
supported procedures in order to minimize strengthen the internal control framework HQTVJG[GCTGPFGFUV&GEGODGT
the manual intervention. relating the new processes during the year and reported to the Board that nothing has
come to their attention that causes them to
Adequate training and awareness sessions believe that the statement is inconsistent
have been conducted for the Board and with their understanding of the process
CONFIRMATION
the Senior Management with regard to this adopted by the Board in the review of the
standard. Further, the Board ensures that Based on the above processes, the Board design and effectiveness of the internal
processes and controls are put in place for EQPƂTOUVJCVVJGƂPCPEKCNTGRQTVKPI control system of the Bank. Their Report on
use of management information systems system of the Bank has been designed to the Statement of Internal Control is given in
and validation of information extracted to provide reasonable assurance regarding this report page 169.
comply with SLFRS 9. VJGTGNKCDKNKV[QHƂPCPEKCNTGRQTVKPICPF
By order of the Board
Devaka Cooray Jonathan Alles Aruni Goonetilleke

Chairman Managing Director Chairperson
$QCTF#WFKV%QOOKVVGG %JKGH'ZGEWVKXG1HƂEGT
Colombo, Sri Lanka

VJ(GDTWCT[

INDEPENDENT ASSURANCE REPORT
TO THE BOARD OF DIRECTORS OF the process the Directors have adopted in (g) Obtained written representations from
HATTON NATIONAL BANK PLC reviewing the system of internal control for Directors on matters material to the
We were engaged by the Board of Directors the Bank. Statement on Internal Control where
of Hatton National Bank PLC (“Bank”) QVJGTUWHƂEKGPVCRRTQRTKCVGCWFKV
To achieve this objective, appropriate evidence cannot reasonably be expected
to provide assurance on the Directors’
evidence has been obtained by performing to exist.
Statement on Internal Control Over Financial
the following procedures:
Reporting (“Statement”) included in the
5.5#'FQGUPQVTGSWKTGWUVQEQPUKFGT
#PPWCN4GRQTVHQTVJG[GCTGPFGF (a) Enquired the Directors to obtain an whether the Statement covers all risks
December 2022. WPFGTUVCPFKPIQHVJGRTQEGUUFGƂPGF and controls, or to form an opinion on the
by the Board of Directors for their effectiveness of the Bank’s risk and control
Management’s responsibility for the review of the design and effectiveness RTQEGFWTGU5.5#'CNUQFQGUPQV
Statement on Internal Control of internal control and compared their require us to consider whether the processes
Management is responsible for the understanding to the Statement made described to deal with material internal
preparation and presentation of the by the Directors in the Annual Report. EQPVTQNCURGEVUQHCP[UKIPKƂECPVRTQDNGOU
Statement in accordance with the “Guidance disclosed in the Annual Report will, in fact,
for Directors of Banks on the Directors’ (b) Reviewed the documentation prepared remedy the problems.
Statement on Internal Control” issued in by the Directors to support their
statement made.
EQORNKCPEGYKVJVJGUGEVKQP

KK
DQHVJG Our conclusion
Banking Act Direction No. 11 of 2007, by
(c) Related the statement made by the Based on the procedures performed,
the Institute of Chartered Accountants of Sri
Directors to our knowledge of the nothing has come to our attention that
Lanka.
Bank obtained during the audit of the causes us to believe that the Statement
Financial Statements. included on pages 167 to 168 of this annual
Scope of the engagement in report is inconsistent with our understanding
compliance with SLSAE 3050 (d) Reviewed the minutes of the meetings of the process the Board of Directors have
Our responsibility is to issue a report to the of the Board of Directors and of relevant adopted in the review of the design and
Board on the statement based on the work Board Committees. effectiveness of internal control system over
performed. We conducted our engagement VJGƂPCPEKCNTGRQTVKPIQHVJG$CPM
in accordance with Sri Lanka Standard on (e) Attended meetings of the Audit
#UUWTCPEG'PICIGOGPVU5.5#'s Committee at which the Annual Report,
Assurance Report for Banks on Directors’ including the Statement on Internal
Statement on Internal Control issued by The Control is considered and approved for
Institute of Chartered Accountants of Sri submission to the Board of Directors.
Lanka.
(f) Considered whether the Directors’
Statement on Internal Control covers Chartered Accountants
Summary of work performed
the year under review and that adequate
Our engagement has been conducted Colombo
processes are in place to identify any
to assess whether the Statement is both UKIPKƂECPVOCVVGTUCTKUKPI (GDTWCT[
supported by the documentation prepared
D[QTHQT&KTGEVQTUCPFCRRTQRTKCVGN[TGƃGEVU

GOVERNANCE AND RISK
$N*¯t¢ͽ΄Nk¯**¢¯΄Nk΄tk¯¯¢΄ÎN¯I΄¯I*΄k_
4GNCVGFRCTV[VTCPUCEVKQPUCUTGSWKTGFD[.-#5p4GNCVGF2CTV[&KUENQUWTGUqCTGFGVCKNGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU+PCFFKVKQP
the Bank carries out transactions in the ordinary course of its business at commercial rates with entities in which a Key Management Personnel
(KMP) of the Bank is the Chairman or a Director of such entities, the details of which are given below.
#NUQVJKUEQORNKGUYKVJVJGTGSWKTGOGPVUQHUGEVKQPQHVJG%QORCPKGU#EV0QQHCPFFKTGEVKQPUKUUWGFWPFGTUGEVKQP

CPF
QHVJG$CPMKPI#EV0QQH
1. LENDING TRANSACTIONS WITH THE BANK

Director/Company Name of the Nature of Transaction Aggregate Amount of Accommodation Security
Director/
As at 31st December 2022 As at 31st December 2021
Relationship
Limit Outstanding Limit Outstanding
(A) Mr Amal Cabraal

John Keells Director Overdraft/STL - I 200.00 200.00 200.00 200.00 Clean
Holdings PLC Commercial paper *(200.00) - *(200.00) - Commercial paper
Short Term Loan *(200.00) - *(200.00) - agreement, Cash Back
Overdraft/STL - II 4,800.00 4,711.19
Short Term Loan *(4,800.00) -
-
Forex Forward Booking *(204.00) - - -
Term Loan - I 5,100.00 2,700.00 6,000.00 6,000.00
Term Loan - II 2,700.00 2,700.00 - -
LG - - 2,991.09 2,991.09
Total 12,800.00 10,311.19 12,191.09 12,191.09
Ceylon Beverage Chairman Term Loan 2.50 2.50 2.50 2.50 Board Resolution
Holding PLC Total 2.50 2.50 2.50 2.50
Lion Brewery Chairman Overdraft 100.00 - 100.00 - DPN
(Ceylon) PLC Letter of Guarantee 20.00 **26.82 20.00 18.66 LG Indemnity
Money Market Loan 2,000.00 - Loan Agreement
Overdraft -Kaduwela *(400.00) - *(400.00) - OD Agreement
Term Loan - I - - *(110.00) 110.00 Loan Agreement
Letter of Credit - I 50.00 50.00 50.00 - Docs of Title
Import Loan - I *(50.00) - *(50.00) -
Letter of Credit - II *(2,000.00) 199.09 *(2,000.00) - Docs of Title
Import Loan - II *(2,000.00) - *(2,000.00) - Import Loan Agreement
Total 3,170.00 2,275.91 3,170.00 128.66
Sunshine Chairman Overdraft 50.00 0.04 50.00 - Clean
Holdings PLC STL Revolving 500.00 - - -
Total 550.00 0.04 50.00 -
Sunshine Chairman Letter of Credit 1,400.00 1,200.00 Absolute ownership
Healthcare Lanka Overdraft 150.00 19.61 200.00 57.08 over leased Asset,
Ltd. Letter of Guarantee 50.00 10.29 - - Duly Accepted usance
Import Loan *(700.00) - *(500.00) - Draft / Documents
Forex Forward Booking *(270.00) - *(270.00) - of Title, Import Loan
Shipping Guarantee *(400.00) 505.05 *(400.00) 66.20 Agreement, Forward
Block Lease Facility - II *(40.00) - *(40.00) - Exchange Agreement,
Block Lease Facility - I - - Clean, Overdraft
Money Market Loans - I 1,250.00 1,250.00 - - Agreement, Letter
Money Market Loans - II *(100.00) - - - of Indemnity, LG
Letter of Guarantee - II *(100.00) - *(100.00) 111.61 Indemnity
Export Bill Discounting *(100.00) - - -
Standby Overdraft 100.00 8.88 - -
Corporate CC - - 2.00 -
Total 2,982.28 2,472.06 1,434.20 365.38

Director/
Relationship
Sunshine Director Overdraft - Overdraft Agreement,

Consumer Lanka Letter of Guarantee 15.00 - 15.00 1.19 LG Indemnity, Loan
Ltd Short Term Loans 600.00 - - - Agreement, Documents
Letter of Credit *(200.00) - - - of Title, Usance Draft
Import Loans *(200.00) - - -
Total 915.00 282.32 315.00 1.19
Healthguard Chairman Short Term Loan - I 20.00 - 20.00 - Loan Agreement,
Pharmacy Ltd. Letter of Guarantee 10.00 7.00 10.00 7.00 Mortgage over stocks
Overdraft - I *(5.00) - *(5.00) - LG Indemnity,
Overdraft - II 50.00 50.00 - Docs of title. duly
Letter of Credit 100.00 - 100.00 15.94 accepted usance drafts,
Import Loan *(100.00) - *(100.00) - Overdraft Agreement
Short Term Loan-II 5.00 - 5.00 -
Letter of Credit (50.00) - - -
(Domestic)
Total 185.00 13.30 185.00 22.94
Lina Chairman Letter of Credit 200.00 25.91 200.00 - Document of Title /
Manufacturing Import Loan *(200.00) *(200.00) - Duly Accepted Usance
(Pvt) Ltd Money Market Loans *(50.00) - *(50.00) - Draft,
Overdraft 125.00 108.61 125.00 - Corporate Guarantee
Letter of Guarantee 25.00 - 25.00 -
Total 350.00 265.37 350.00 -
(B) Mr W M M D Ratnayake
Sri Lanka Institute Council Term Loan - - 2,000.00 509.80 Clean
of Information Member Total - - 2,000.00 509.80
Technology
(SLIIT)
Hsenid Business Director Bank Guarantee - - 6.00 6.00 Lien over Savings
Solutions (Pvt) Total - - 6.00 6.00 Account
Ltd
(C) Mrs Aruni Goonetilleke
Tea Small Holder Non- Overdraft *(50.00) - 50.00 - Clean
Factories PLC Executive Money Market Loan 50.00 - *(50.00) -
Director Total 50.00 - 50.00 -
Celcius Solutions Spouse of Letter of Credit - 100.00 41.86 Documents of Title,
(Pvt) Ltd Mrs Aruni Import Loan
*(100.00) 57.09 Mortgage over stock,
Goonetilleke Term Loan I 5.64 5.64 11.88 11.88 Personal Guarantee,
is a Director/ Term Loan II 7.50 7.50 22.50 22.50 Demand Promissory
Share Holder Term Loan III - - Note, 70% of post-
Short Term Loan
- - - dated cheques,
Shipping Guarantee
- - - Absolute ownership of
Overdraft - I
- - - Vehicles/ Machinery,
Overdraft - II 10.00 - - - 90% of cash deposits,
Block Lease Facility 10.00 - - - Shipping Guarantee
Letter of Credit -II 50.00 - - - Indemnity
Import Loan - II *(50.00) - - -
Shipping Guarantee - II *(50.00) - - -
Overdraft - III *(50.00) - - -
Total 221.14 150.90 142.31 141.26

GOVERNANCE AND RISK
DIRECTORS’ INTEREST IN CONTRACTS WITH THE BANK

Director/
Relationship
Eswaran Brothers Non- Packing Credit Loan $ 121.27 %QPƂTOGF'ZRQTV

Exports Pvt Ltd Executive Packing Credit Ln -LKR *(140.00) 97.55 orders, Export letters of
Director LC I - LKR *(20.00) - Credit,
LC II- LKR *(20.00) - Documents of title,
Import Loan - LKR *(40.00) - Joint & Several
Short Term Loan -LKR *(20.00) - personal guarantees,
Export Bill Discount $ *(91.87) - N/A N/A Duly accepted usance
Term Loan LKR drafts, Mortgage over
Term Loan $ - I 44.10 44.10 Equipment/Machinery,
Term Loan $ - II 216.82 216.82 Absolute ownership of
Term Loan $ - III Vehicles.
Lease Facility - LKR 1.75 1.75
Total 668.88 520.20
Softlogic Finance Non- Overdraft 25.00 4.48 Clean, Mortgage
PLC Executive Term Loan 24.94 24.94 124.96 124.96 over higher purchase
Director Total 49.94 29.42 266.89 226.35 receivables.
(D) Mr Prawira Rimoe Saldin
Sithma Chairman Overdraft 50.00 - 50.00 - Commercial Property
Development Term Loan - - - -
(Pvt) Ltd. Total 50.00 - 50.00 -
(E) Dr T K D P Samarasinghe
HNB General Alternate Corp CC 1.00 - 2.00 2.00 Corporate Guarantee
Insurance Director to Total 1.00 - 2.00 2.00
Mr L.U.D.
Fernando
HNB Assurance Alternate Bank Guarantee 227.41 227.41 26.69 26.69 100% cash margin
PLC Director to Corp CC 1.00 - 1.00 1.00 Corporate Guarantee
Mr L.U.D. Total 228.41 227.41 27.69 27.69
Fernando
Hayleys Fibre Director Packing Credit Loan 75.00 - Clean, Loan
PLC Export Bill Discounting *(50.00) - Agreement, Documents
Short Term Loan *(75.00) of Title, Duly accepted
Letter of Credit
- usance drafts, LG
Letter of Guarantee *(5.00) 1.79 N/A N/A Indemnity, Overdraft
Overdraft 6.00 Agreement, Forward
Saubhagya Term Loan 11.11 11.11 exchange agreement
Term Loan $ 0.08 *(29.40) -
Forward Ex Contract 200.00 200.00
Total 292.11 254.28
(F) Mr Devaka Cooray
United Motors Chairman TOD - 0.01 - 0.01 Clean
Lanka PLC Total - 0.01 - 0.01
Unimo Chairman LC 1,500.00 - 1,500.00 159.09 Documents of Title,
Enterprises Ltd Import Loan *(1,500.00) 657.00 *(1,500.00) - Duly Accepted Usance
LG *(1,500.00) *(1,500.00) Drafts, CG of United
Total 1,500.00 1,171.30 1,500.00 479.34 Motors Lanka PLC

Director/
Relationship
JAT Holdings Director Overdraft 50.00 45.67 Clean

PLC Letter of Guarantee 75.00 Counter Indemnity
Corp CC 1.00 - Title of Documents,
Letter of Credit 150.00 - N/A N/A Duly Accepted Usance
Import Loans *(150.00) 101.24 Drafts
Total 276.00 198.54 Import Loan Agreement
HVA Foods PLC Director Packing Credit ($) Clean
Export Bill Discounting
-
OD 100.00 **100.46 N/A N/A
One off STL 100.00 100.00
Total 565.00 273.46
(G) Mr D P N Rodrigo
HNB Assurance Director Bank Guarantee 227.41 227.41 26.69 26.69 100% Cash back
PLC Corp CC 1.00 - 1.00 1.00 Margin, Corporate
Total 228.41 227.41 27.69 27.69 Guarantee
HNB Finance Chairman Overdraft 1,000.00 1,000.00 - Negative Pledge, Corp
MM Loan 1,000.00 1,000.00 1,000.00 Guarantee/STO for the
Corp CC 0.50 0.06 0.15 - Recovery of 100% of CC
Total 2,000.50 1,234.32 2,000.15 300.00 o/s on due date
* Figures in brackets indicate sub limits granted to respective entities.

** Approval was obtained for the excesses.

GOVERNANCE AND RISK
DIRECTORS’ INTEREST IN CONTRACTS WITH THE BANK
2. OTHER BUSINESS TRANSACTIONS WITH THE BANK
Company/Director Name of the Director / Nature of Transaction Amount (Rs Mn)

Relations hip 2022 2021
(A) Mr Jonathan Alles

Sri Lanka Bank's Association Director Subscription Charges 0.55 N/A
(B) Mr Amal Cabraal
John Keels Holdings PLC Director Merchant Commission -
Healthguard Pharmacy Ltd. Chairman Merchant Commission 17.71
Sunshine Healthcare Lanka Ltd Chairman Merchant Commission - 0.19
(C) Mr Prawira Rimoe Saldin
Sithma Development (Pvt) Ltd. Chairman Repo (outstanding as at year end) - 600.00
Interest on REPO 8.00 1.60
Rental paid 748.10
Rental income 4.15
(D) Dr T K D A P Samarasinghe
HNB Assurance PLC Alternate Director to Interest on REPO 80.22
Mr. L.U.D. Fernando
HNB General Insurance Alternate Director to Interest on REPO 0.72
Mr. L.U.D. Fernando
Lanka Bell Limited MD Merchant Commission 4.59 5.88
Data Line Expenses 12.06
(E) Mr D P N Rodrigo
HNB Assurance PLC Director Premium paid 84.12
Interest on REPO 98.52
Merchant Commission 20.94 16.72
Rental income 9.68 9.15
Dividend income 251.94
Fee and Commission income 521.19
Claims paid
Credit Information Bureau of Sri Lanka Director CRIB Charges 50.68 46.08
Sri Lanka Institute of Directors Council Member Subscription Charges N/A
Lanka Financial Services Bureau Ltd Director Investment Shares - 5.00
Swift Charges 5.65
Guardian Acuity Asset Management Director Management Fee 1.79 -
REPO - 12.50
Interest on REPO -
(F) Mr Devaka Cooray
Management Systems Ltd MD Administration Expenses 6.40
JAT Holdings (Pvt) Ltd Director Merchant Commission N/A
(G) Mr W M M D Ratnayake
Hsenid Business Solution Ltd Director Interest on REPO 10.55 -
Merchant Commission 0.80

Company/Director Name of the Director / Nature of Transaction Amount (Rs Mn)
Relations hip 2022 2021
(H) Mrs Aruni Goonetilleke

Tea Small Holder Factories PLC Director REPO Outstanding 45.27 -
Interest on REPO 6.25 -
Celcius Solution Pvt Ltd Spouse of Mrs Aruni Merchant Commission 2.76
Goonetilleke is a
Director/ Share Holder
Softlogic Finance PLC Director Merchant Commission 0.18 0.26
Collateral details of facilities for each company are grouped together without Identifying collateral, facility- wise.
6JGCDQXGFKUENQUWTGQPN[RGTVCKPUVQVJGVTCPUCEVKQPUECTTKGFQWVYKVJFKTGEVQTUYJQCTGJQNFKPIQHƂEGCUCV
The above entities also held customer deposits with the Bank totalling to 15,957.48 Mn. and interest paid was 2,170.40 Mn. Interest income
GCTPGFHTQONQCPUCPFCFXCPEGUCOQWPVGFVQ/P0GV(GG+PEQOGVQVCNNKPIVQ/PHQTVJG[GCTGPFGF

GOVERNANCE AND RISK
N¢_΄π΄N¯a΄*ÍN*Î
The country experienced continuous

Risk Management
economic disruptions throughout the year
Achievements in 2022
2022, which resulted in a major socio-
economic crisis impacting all industries, > Bank was not exposed to any cyber breaches during the year.
services and agricultural operations. Rising > /CPCIKPITKUMUHQTUWUVCKPCDNGITQYVJCPFRTQƂVCDKNKV[
KPƃCVKQPCPFUGXGTGUJQTVCIGUQHGUUGPVKCN
> Bank’s operational losses were at an all-time low due to strengthened
food, fuel, gas, medicines and other
operational risk practises.
necessities culminated in mass nationwide
demonstrations against the government,
leading to political unrest and changes
within the government. Sri Lanka being
KEY RISKS 2022
VJGƂTUVEQWPVT[KPVJG#UKC2CEKƂETGIKQP Country Risk
to default on its national debt in the 21st The key risk events of 2022 included
century, caused the country’s sovereign rapidly evolving political, market > The assignment of Default
rating to be downgraded to D (Default) by and operational risks as well as an Country Ratings by rating agencies
S&P in August 2022 and to RD (Long Term CTTC[QHƂPCPEKCNTKUMGNGOGPVUVJCV had several direct and indirect
Issuer Default) by Fitch Ratings in December required foresight and prudence. The repercussions on the Bank and
2022, and this resulted in Sri Lanka facing interconnected nature of these risk factors constrained treasury operations,
a severe shortage of US dollars. During contributed towards exposing the Bank such as curtailment of overseas
the year, the population, particularly the to a heightened overall risk environment. counterparty limits, non-availability
masses in the lower income categories, The major risk elements included: of swap funding lines, foreign
HCEGFUKIPKƂECPVJCTFUJKRUCUVJGEQWPVT[ borrowings, international trade
struggled to supply foreign exchange to operations and placements etc…
import essentials such as food, fuel, gas Sovereign Default
etc. High demand and the low supply of US
dollars, caused a steep depreciation of the > This risk relates to the non-
settlement of US dollar denominated Foreign Currency Liquidity Crisis
Sri Lankan rupee against the US dollar and
also against other international currencies, Government securities in the form > Sovereign default coupled with low
which in turn, had an adverse impact on of International Sovereign Bonds & exports and inward remittances
domestic interest rates. Consequently, due Sri Lanka Development Bonds, that have resulted in constrained foreign
to the rising interest rates, lending declined greatly impacted the Bank’s US dollar currency liquidity. Furthermore,
across all economic sectors and a large liquidity and foreign currency cash increased customer demand for
group of households fell below the poverty ƃQYUCPFECRKVCN foreign exchange due to economic
line. instabilities and migrations also
added to the pressure.
Focusing on operations of the Bank within
the challenging economic conditions Exponential Increase in Market
that prevailed during 2022, the Bank Interest Rates
maintained stringent risk management > The sharp increase in market interest Health & Safety
practices and oversight to ensure prudent rates during the 12 months under
management of assets and operational > Health and safety remained a priority
review resulted in frequent MTM
GHƂEKGPE[HQTQRVKOWOTGVWTPUHQTCNN as the country gradually opened up
losses on account of the rupee
stakeholders. Responding to the evolving and resumed economic activities as it
denominated Govt Securities
risk landscape, the Bank continued to was necessary to maintain health and
portfolio and slowed down the
review and strengthen its risk management safety guidelines in the early part of
growth in the advances portfolio of
systems and processes to mitigate impacts 2022 due to the emerging variants of
the Bank.
of business disruptions as both local and COVID-19 and other viral deceases
global turbulence continued to disrupt spreading around the globe. Hence
markets and operations. This report seeks the social distancing, tele-working
to provide a succinct overview of the Bank’s Foreign Exchange Risk and work from home arrangements
risk management initiatives during the year continued to a certain level even after
> The element of foreign exchange the country fully opened up after
under review within the context of the wider
risk was augmented within the pandemic.
macroeconomic environment and dynamic
prevailing environment of rapid rupee
risk landscape.
depreciation against all international
currencies.

Macroeconomic Environment Technology & Cybersecurity Geopolitical Stress
> The overall macroeconomic > Technology continued to play a > The world faced renewed uncertainty,
environment presented a high vital role during the year with the as war broke out on top of an
threat level due to the combination Bank promoting digital platforms to ever-changing and persistent
of unfavourable developments customers and tele-working and work pandemic with the Russian invasion
that occurred during the year, from home arrangements for staff of the Ukraine in March 2022. Sharp
destabilising the country’s COVID due to the disruption to transport increases in energy and food prices
recovery trajectory and retarding services during 2022. Cyber threats have added to these pressures for
economic gains that could otherwise escalated due to increased volumes the poorest and most vulnerable.
have accrued to the overall GDP. The of digital transactions and remained Consequently, the geopolitical
unfavourable economic conditions CEQPEGTPCUƂPCPEKCNUVTGUUKPETGCUGF landscape represented heightened
including the indirect impacts of globally. However, the expansion threat levels during the year with
political instability, contraction in and enrichment of HNB’s digital escalating global tensions and
GDP due to the disruptions to all payment platforms have paved the repeated bouts of COVID-19 in
economic activities, depreciation of way for contactless banking with a China and other countries, which
VJGEWTTGPE[JKIJKPƃCVKQPCPFTCRKF high level of security. The Bank has increased supply side restrictions
increase in interest rates, augmented also invested in increasing the rigor and contributed towards dramatic
the existing risk factors during the of safeguards against any cyber increases in energy prices. Stock
year while paving the way for new risk security threats and also in upgrading market valuations around the world
elements. the business continuity infrastructure have fallen drastically and real estate
to ensure readiness to any given prices may follow, which also poses
eventuality. TKUMUVQVJGUVCDKNKV[QHƂPCPEKCN
institutions worldwide. The worst
People and Behaviour affected by the turnaround in interest
rates are highly indebted countries in
> The behaviour of customers and Policy Uncertainty the global South, which will have to
staff continue to evolve in response spend even larger shares of their tax
to the unprecedented pressures > Policy uncertainty remains a key risk
revenues on debt servicing, or face
brought about by the full-blown with the Government having to take
insolvency altogether.
socio-economic crisis experienced extraordinary policy decisions to
during 2022. The repeated strikes UWRRQTVU[UVGOKEƂPCPEKCNUVCDKNKV[
by essential services including the Polices aimed at curtailing imports,
health care sector and the rising costs KPƃCVKQPCPFKPVGTGUVTCVGUJCXGC Foreign Currency Restrictions
of essential medicinal drugs and the direct impact on the banking sector
> The Central Bank of Sri Lanka with
fuel and power crisis experienced YKVJKORNKECVKQPUQPRTQƂVCDKNKV[CPF
a view to easing pressure on the
during the year created a huge liquidity.
exchange rate, introduced several
impact on life styles of the civilians of
regulations for Banks including
the country causing severe physical
the restrictions on purchasing of
and mental stress. The fuel shortages
Government Moratorium Sri Lanka International Sovereign
curtained freedom of movement due
Programmes and assisting Bonds, restrictions on entering
VQFKHƂEWNVKGUKPVTCPURQTVCVKQPCPF
customers for business revival into forward contracts of foreign
the extensive power cuts directly
exchange, revoking of short-term
affected the behaviour of customers > HNB continued to support the
foreign currency borrowing limits,
and the staff of the Bank. The power Government in these programs
import restrictions on certain classes
shortages during work hours and at and have provided Rs. 85.7 Bn in
of commodities, and the imposition
PKIJVVJGVTCPURQTVFKHƂEWNVKGUFWGVQ moratoria across all customer groups.
of maximum interest rates on
lack of fuel, work from home models,
foreign currency deposits. These
performance pressures, customer
capital controls together with import
behaviour, pandemic related fears
restrictions and additional exchange
CPFƂPCPEKCNUVTGUUJCXGCNNEQODKPGF
EQPVTQNUJCXGJCFCUKIPKƂECPV
to bring about increased and
impact on the Banks foreign currency
complex challenges for our customers
operations.
and staff.

GOVERNANCE AND RISK
RISK & CAPITAL REVIEW
6JG$CPMCUUKUVGFEWUVQOGTUYJQYGTGKPFKHƂEWNVKGUVQTGXKXGVJGKTDWUKPGUUGUD[HQTOWNCVKPIPGYDWUKPGUUXKUKQPUHCEKNKVCVKPIUWRRN[EJCKP
linkages, offering digital solutions etc… Further, the Bank extended support to vulnerable industries and shifted focus towards developing the
production economy, MSMEs, health, education and exports. Customers that were dealing with moratoria were supported by way of advisory
UGTXKEGUYKVJTGICTFUVQECUJƃQYOCPCIGOGPVECRVWTKPIPGYOCTMGVUCPFTGXKXKPIVJGKTDWUKPGUUUVTCVGIKGU
Response Total *Customers in this category have assured

the Bank that repayments would commence
Total value of moratoria at the beginning of the year Rs 85.7Bn HTQO,CPWCT[6JG$CPMJCUEQPVKPWGF
Total value of moratoria paid-off during the year 4U$P to support these customers in diverse ways
Total value of outstating moratoria as at the end of the year 4U$P to facilitate business revival.
OUR SIGNIFICANT RISKS
Liquidity Risk
While investments in USD development bonds and International Sovereign Bonds (ISBs) continued to decline in the latter part of 2022,
KORCKTOGPVRTQXKUKQPKPIQPVJGUGKPUVTWOGPVUKPETGCUGFUWDUVCPVKCNN[CUCVGPFPGICVKXGN[KORCEVKPIRTQƂVCDKNKV[HQTVJG[GCT*QYGXGT
VJG$CPMVQQMCNNRTGECWVKQPUVQUCHGIWCTFVJGECRKVCNCPFNKSWKFKV[RQUKVKQPVQGPUWTGƂPCPEKCNUVCDKNKV[YJKNGCEEQOOQFCVKPICNNEWUVQOGT
needs. Meanwhile, the Bank has strengthened its investment portfolio by increasing its investments into treasury bills that did not require
impairment provisioning.
Investments Impairment
As at Dec 2021 As at Dec 2022 As at Dec 2021 As at Dec 2022
Rs. (Bn) Rs. (Bn) Rs. (Bn) Rs. (Bn)
Bank’s investment in USD development bonds 51.5* 2.5

Bank’s investments in ISBs 114.1* 209.6* 7.6
Bank’s investments in TBills 168.1 216.5 Nil Nil
Bank’s investments in TBonds 56.4 Nil Nil
*Based on prevailing exchange rate during the corresponding dates.

Measures implemented to manage the Looking ahead Strategic Risk – Digital transformation
liquidity risk The Bank has deployed a range of measures initiatives
> Daily trackers and meetings. to continually monitor and manage liquidity A number of digital transformation initiatives
TKUMKPVJGPGYƂPCPEKCN[GCT6JGUGKPENWFG were introduced during the year to mitigate
> Formation of a separate Committee
strategic risks, while assisting decision
comprising the MD, COO, CRO, CFO, > Reviewing caps, loss limits and
making. These include:
DGM-Treasury and business heads, to measurement of volatility of foreign
review the liquidity position on a weekly exchange and securities. > Developing predictive models to conduct
basis and to take necessary remedial analytics on the Bank’s loan portfolios
> Reviewing and structuring Treasury limits
action. across businesses and products, to
HQTEQPUKFGTKPIVJGRQUUKDNGTKUMU
identify early warning signals with regards
> Treasury limits were reviewed more current market and economic challenges
to the build-up of portfolio stress.
frequently in order to assess micro and and impacts on debt restructuring etc…
macro-economic factors on counterparty > Implementing contingency planning
> Continuous focus on reducing the Bank’s
limits. The Bank’s liquidity and funding initiatives.
investments in TBonds and increasing the
needs were periodically reviewed.
investments in TBills. > 1DVCKPKPISWCNKV[EGTVKƂECVKQPU
> Stress testing was conducted regularly
> Maintaining stringent quality systems and
to understand the impact on the Bank’s
standards.
liquidity position due to non-settlement
of USD denominated bonds. > NOP management.
> Engaging with foreign legal consultants > Carrying out aggressive deposit
on sovereign exposure management. campaigns in order to mobilize LKR and
USD deposits.
> Impact analysis on Bank’s capital
base was carried out on the possible > Encourage worker remittances by offering
hair cut on Bank’s investment in USD attractive exchange rates and arranging
denominated bonds, USD deposit run, deposit campaigns overseas.
LKR deposit run and immediate demand
of FC borrowings by overseas lenders > Secure new to bank export customers by
including identifying strategies to offering competitive lending rates and
minimize the impact of these events. advisory services to explore new markets.
> Engaging with overseas counterparts for
fresh USD funding lines

GOVERNANCE AND RISK
Material Risks
/CVGTKCNTKUMUCPFVJGTKUMFTKXGTUYGTGKFGPVKƂGFOGCUWTGFCPFOQPKVQTGFEQPVKPWCNN[FWTKPIVJG[GCTVJTQWIJVJG$CPMoUTKUMOCPCIGOGPV
processes as described below.
Figure 1: Material Risks
Credit Risk Operational Risk Information & Cyber Risk
This risk refers to losses due to one or The risk of loss due to inadequate or failed 4KUMQHƂPCPEKCNNQUUQTFKUTWRVKQPQTFCOCIG
iwÌv,Ã
more counterparties failing to meet all internal processes, people, or systems or from to the reputation of the Bank from any sort of
or part of their contractual obligations GZVGTPCNGXGPVU6JKUFGƂPKVKQPKPENWFGUNGICN compromising of information by unintended
towards the Bank in accordance with risk but excludes strategic and reputational parties and unauthorized access to our systems
agreed terms. risk. or data/information. This risk also arises from
the failure of the Bank’s information technology
systems services due to unauthorized
OQFKƂECVKQPU
Drivers of this risk includes the current This risk arises from day-to-day operations and Arises from the integration of Information
economic situation, concentration external events. technology into all aspects of banking
of portfolio by product, business operations which facilitate convenience,
sector, geography etc.; rigour of credit scalability and capability but also makes the
Risk Drivers
evaluation and monitoring processes, Bank vulnerable to unauthorised access to

Bank’s credit risk appetite, internal risk systems and information assets
goals and tolerance level, Expectation
on government concessions to postpone
repayment.
The risk is measured based on credit Measured using operational losses, loss Cyber risk loss limits and cyber risk matrix,
How the Risk is
exposure, Probability of Default (PD), events/near misses, key risk indicators, overall hacking, phishing, malware attack attempts for
Measured
expected losses, Loss Given Default risk grid matrix, risk ranking and prioritizing, a month are measured to track this risk factor
(LGD) and recovery rates. NPA ratios, risk heat map. Capital is allocated under CAR continuously.
stress testing on concentration, large as per Basel III.
borrower default, increase in provision
etc. Additional capital under Pillar 2 risk
is assessed by ICAAP as per Basel III
Continuous monitoring is conducted Monitored through the Bank’s Operational The Bank conducts security risk reviews/
via Credit Risk Vertical using the Credit risk management vertical under the guidance assessments on regular basis against
How the Risk is
Risk Dashboard which provides metrics of ORSC with input from business units technology infrastructure and critical system
Monitored
on several parameters including analysis through Risk and Control Self-Assessments. & business process. IT & cyber-risk dashboard
of arrears, collateral, concentration etc. Operational risk monthly Dashboards are presented to BIRMC and ERMCPC monthly
submitted to BIRMC, BCC and executive submitted to ERMCPC, BIRMC and Board by Information and cyber security risk vertical
committees. , Monitoring of Privileged User Activities and
changes carried out on a periodic basis and
report to BIRMC.
A Credit Risk management policy and Managed through a sound Operational Risk The Bank has in place an action plan for digital
How the Risk
is Managed
monitoring mechanism is available to Management Framework by the ORSC with the resilience and awareness and also has business
manage this risk CBSL guidelines were participation of all business/support units. A continuity plans. In addition, physical controls,
used in extending the moratorium. comprehensive Business Continuity Plan (BCP) technical and logical access and administrative
is also available. EQPVTQNUKPFGRGPFGPV..XGTKƂECVKQPUD[
Risk and Audit are used to manage the risk.
Assessment: High Assessment: High Assessment: Moderate

Information
Trend: Trend: Trend:

Key
Page 194 Page 200 Page 205

Liquidity Risk Market Risk Strategic Risk Reputation Risk
This refers to the risk that the This is the risk that movements in The strategic risk is the Refers to potential losses from
Bank is unable to meet its debt market factors could reduce bank’s uncertainties inherent in executing damages to reputation.
obligations or having to meet these income or value of portfolios and strategic objectives.
obligations at excessive cost. include interest rate risk, exchange
risk and settlement risk.
Arises from the risk of debt The increasing interest rates Arises from external developments Arises from events that could
restructure, as well as mismatches and depreciation of LKR against in technology, products, business adversely impact public perception
KPECUJƃQYHTQORQVGPVKCNUJQTV USD resulted in a huge negative models. of the Bank as a responsible
term cash demand, the Bank’s own impact on lending activity of the corporate citizen.
borrowing activity, trading activities Bank, whereas the interest paid to
and counterparty interactions. depositors was at a high level.
Due to this market condition,

the Bank’s Net Interest Income
deteriorated and more focus had to
be placed on fee-based income.
A range of metrics are being used Measured using Value at Risk, Measured using a scorecard Measured using a scorecard
by the Bank including regulatory Sensitivity analysis and stress approach to quantify strategic approach by assessing underlying
limits such as the LCR, internal testing on open positions, mark to risk under the Basel III Pillar 2 risk drivers of reputational risk due
models and balance sheet based market on daily basis to identify the calculation. to qualitative nature of the risk.
measures and stress testing on trading book position. Capital is
interest rate sensitivity, probabilistic allocated under CAR as per Basel
analysis and NII analysis to measure III.
this risk.
Regular monitoring of the situation The risk is monitored by the ALCO An Integrated risk management The Integrated risk management
by the ALCO Board subcommittee using Market Risk Dashboards unit is in place to monitor this unit monitors this risk through a
CPF6TGCUWT[/KFFNG1HƂEG
6/1 supported by an independent risk through a scorecard and is scorecard and evaluated for any
using a matrix of regulatory and 6TGCUWT[/KFFNG1HƂEG
6/1 evaluated for any additional capital additional capital requirement
prudential limits and gaps using which reports to CRO. Internal and requirement through the ICAAP through the ICAAP submission to
DQVJUVQEMCPFƃQYCRRTQCEJGU regulatory limits and exceptions are submission to Board annually. Board annually.
dashboards submitted to ALCO immediately reported to ALCO.
and BIRMC and the Board.
A strong liquidity risk management The Treasury Department overlooks The corporate management and The Bank sets the tone at the top
Framework is in place which VJKUTKUMWUKPIFKXGTUKƂECVKQPCPF Board are involved in managing and reinforces its core values and
includes contingency plans. hedging strategies. this risk. purpose. A Reputation Risk Task
Force was established as a sub-
committee of ORSC to manage risk
in case of trigger events.
Assessment: High Assessment: High Assessment: High Assessment: Moderate

Trend: Trend: Trend: Trend:
2CIG Page 207 Page 219 Page 218

GOVERNANCE AND RISK
ENTERPRISE RISK GOVERNANCE

+PFWUVT[DGUVRTCEVKEGUJCXGDGGPKPVTQFWEGFKPGUVCDNKUJKPICF[PCOKECPFƃGZKDNGHTCOGYQTMVQGHHGEVKXGN[KFGPVKH[OQPKVQTCPFIQXGTP
the Bank’s risk elements, incorporating specialised and technical expertise to ensure optimum responses while also guaranteeing stringent
compliance with all relevant regulatory requirements pertaining towards risk management within the current highly volatile macro environment
KPYJKEJVJG$CPMEQPFWEVUKVUFCKN[QRGTCVKQPU6JG$CPMoUIQXGTPCPEGUVTWEVWTGENGCTN[FGƂPGUVJGTGURQPUKDKNKVKGUCVCNNNGXGNUQHVJG
organisation with regards to managing the internal and external risks faced by the Bank, with the Board holding ultimate responsibility
for managing the Bank’s risks. The Board is assisted in this onerous task by the Board Integrated Risk Management Committee (BIRMC).
In addition, the executive functional units of the Bank are also held responsible for the effective implementation of the risk management
strategies that have been approved by the Board. As a further measure, the risk management structure of the Bank incorporates expertise
from executive committees consisting of corporate and senior management teams that draw upon years of work experience in managing a
plethora of risks.
The Bank has adopted the Three Lines of Defence model in its risk management at the three levels comprising business units, group and
ITQWRKPVGTPCNCWFKVCPFKUEQPVKPWCNN[TGXKGYKPICPFKORTQXKPIVJGGHƂEKGPE[CPFGHHGEVKXGPGUUQHVJGUGFGHGPEGU+PQTFGTVQUVTGPIVJGP
VJGTKUMOCPCIGOGPVHTCOGYQTMKPVJG$CPMCRRQKPVGFCUGRCTCVG%JKGH+PHQTOCVKQP5GEWTKV[1HƂEGTCPFHQNNQYGFVJKUWRKP
by rationalising the Risk Management Department functions to increase the focus on the monitoring and advisory functions. The Branch
Operating Model (BOM) has been further reinforced, with clear segregation of relationship management and operational processing at
DTCPEJGUJCXGDGGPUVTGCONKPGFYKVJJKIJGTNGXGNUQHURGEKCNK\CVKQPVJTQWIJQWVVJG$TCPEJYQTMƃQYRTQEGUUGU
Three Lines of Defence
1 BUSINESS UNITS 2 GROUP RISK MANAGEMENT 3 GROUP INTERNAL AUDIT
Heads of business units are responsible Implements Group’s Risk Management Provides an independent assessment of
for identifying, measuring, monitoring, Framework and policies, with a focus the adequacy and effectiveness of the
reporting and managing risks relevant on monitoring and review of key risks overall risk management framework,
to their businesses applicable to the Group. Reports reporting independently to the Board
independently to the BIRMC Audit Committee

Figure 2: Risk Governance Structure of the Bank
Board of Directors Executive Committees

with responsibility for
Risk Management
Board Committees with
oversight responsibilities
of Risk Management Executive Risk Management
and Credit Policy Committee
Board Integrated Risk Managing Director/

iv ÝiVÕÌÛi"vwViÀ Asset & Liability
Committee
Board Credit Committee Operational

Risk Steering Committee
Board Strategic Investment
Information Security
Review Committee
Steering Committee
Compliance
Board Recoveries Committee
Board Audit Committee Regulatory Compliance

Risk Management
Committee FIU Compliance
Cyber & Information
Board Procurement Committee Security Risk
Foreign Exchange Compliance
Credit Risk
FATCA (Foreign Account
Tax Compliance Act)
Import & Export Market Risk

Internal Audit
Control Regulations
Business Continuity
Management
Loan Review Mechanism
Portfolio Risk Management
ICAAP
Group Risk
Integrated Risk Management
Operational Risk

GOVERNANCE AND RISK
Figure 3: Roles & Responsibilities of Committees in Relation to Risk Management
Board Committees Role of Committee in Relation to Risk Management
Board Integrated Risk Management Maintains oversight of Risk Management and makes recommendations to the Board on
Committee (BIRMC) developing and implementing Risk Management Policies, setting the Bank’s Risk Appetite and
OQPKVQTKPIOCVGTKCNTKUMUQHVJG$CPMVJTQWIJTKUMFCUJDQCTFU6JG%JKGH4KUM1HƂEGTCPF%JKGH
%QORNKCPEG1HƂEGTJCXGCFKTGEVVGEJPKECNTGRQTVKPINKPGVQVJG$+4/%
Board Credit Committee (BCC) /CPCIGOGPVQH%TGFKVQXGTUKIJVCPFCRRTQXGUETGFKVITCPVGFCDQXGCURGEKƂGFGZRQUWTG
threshold. Reviews the Credit Risk dashboards and makes recommendations on areas including
credit limits, sector-wise exposure, sector risks, or any other related areas concerning Credit Risk
Management policies and processes.
Board Recoveries Committee (BRC) Is responsible for recoveries of advances and to strengthen the delinquent loan recovery function
of the Bank.
Board Audit Committee (BAC) 4GURQPUKDNGHQTƂPCPEKCNTGRQTVKPITKUMCPFKPVGTPCNEQPVTQNU6JG$CPMoU%JKGH+PVGTPCN#WFKVQT
reports directly to the BAC. This Committee plays a key role in the implementation of the Bank’s
risk management and compliance policy by monitoring key controls.
Board Strategic Planning & Investment Responsible for setting the overall business strategy of the Bank and ensures there is a
Committee (BSPIC) congruence in the Bank’s strategic direction, goals and KPI’s and the Board’s Risk Appetite.
Board Digital Banking Committee Responsible for implementing the Bank’s proposed Digital Banking Platform and Products
(BDBC) and reviews key technology risks and associated strategies. It is responsible for identifying and
monitoring of key risks arising from the Digital area and refers such risks to the Risk Department
and Compliance Department for advice and action.
Board Procurement & Asset Disposal Responsible for assessing proposals for procurement or disposal of assets/ properties of the Bank
Committee and ensures transparency in procurement/disposal processes and good practices.
Executive Committees Role of Committee in Relation to Risk Management
Executive Risk Management and Credit Chaired by MD/CEO and comprising heads of key business lines and operating units of the Bank,
Policy Committee (ERMCPC) the ERMCPC is the apex executive committee for risk management and supports BIRMC and
BCC in effective implementation of the risk policy.
Asset & Liability Committee (ALCO) 6JG#.%1RNC[UCMG[TQNGKPOCPCIKPINKSWKFKV[TKUMCPFƂPCPEKCNUVCDKNKV[QHVJG$CPM+VTGXKGYU
liquidity forecasts to manage gaps, adequacy of contingency funding plans and stress testing
results in achieving its objectives. The Committee also determines the ideal structure of the
$CPMoUDCNCPEGUJGGVVQRTQXKFGVJGQRVKOCNRTQƂVCDKNKV[YJKNGOKPKOK\KPIRQVGPVKCNTKUMU
Operational Risk Steering Committee Chaired by COO and comprising the DGM-Risk/CRO, Heads of Operations, Audit, Compliance,
(ORSC) IT, HR and Network Management, the committee is responsible for assessing operational
processes and internal controls to minimise operational losses and to instil a compliance culture
amongst staff.
Information Security Committee (ISC) Responsible for reviewing and making recommendations on Bank wide information security and
Cyber Security, the ISC is chaired by MD/CEO and comprises of representatives from corporate
business, IT, Audit, Compliance and Support Functions.

RISK MANAGEMENT POLICY FRAMEWORK
The Bank’s risk management policy stems from the Bank’s risk philosophy of prudent management of assets for the maximum value creation
for all stakeholders through the establishment of an overarching risk culture across the organisation. The Board approved risk management
policy provides guidance to the management on implementing processes within the Bank. Recognised as a “Systemically Important Bank”
(SIB) in Sri Lanka, the Bank’s stability has socio-economic relevance above and beyond organisational limits and ensuring effective and strong
TKUMOCPCIGOGPVU[UVGOUKUGUUGPVKCNHQTQXGTCNNƂPCPEKCNUVCDKNKV[CPFGEQPQOKEYGNHCTGQHVJGEQWPVT[*GPEGVJGRTKOCT[QDLGEVKXGQHVJG
Bank’s risk management framework is to effectively identify, measure, manage, monitor and control risks faced by the Bank and to determine
its Risk Appetite in line with the overall business strategy of the Bank.
Figure 4: Risk Management Policy Framework
RISK MANAGEMENT FRAMEWORK POLICY
Risk Philosophy Risk Culture Risk Governance Risk Appetite Risk Goals
Information & Credit Risk Market Risk Liquidity Risk Operational Risk Integrated Risk
Cybersecurity Risk
> The Information > Margin Trading > Treasury Policy > Asset & Liability > Operational Risk > Overall Risk
Security Policy is Guidelines > Treasury Dispute Management Policy Framework Policy
managed by the > Post COVID-19 Resolution Policy Policy > BCP Document > Risk Appetite
CISO and some Revival Policy & > Liquidity Risk Statement
> Contingency > Business
policies were Procedure Management guideline
Funding Plan Disruption
amalgamated into > Product policies Policy Containment > Integrated Stress
the main policy
> Credit Risk Policy > Contingency > Public Health Testing Policy
during the year.
> Memorandum Funding Plan Contagion Plan > Model Risk
> Information
Transfer/Write Off > Fraud Risk guideline
%NCUUKƂECVKQP
Policy
Policy Management
> Guidelines for
> Payment > Customer
Disposal of
Related Mobile Blacklisting
Foreclosed Real
Application Policy Guideline
Estate
> Patch > Baseline Credit > Policy on
Management Framework Reporting and
Policy Provisioning
> Baseline Collateral
for Operational
Framework
Losses
> %NCUUKƂECVKQP
> Valuation Policy
Policy
> Environment
& Social Risk
Management
Policy
> SAM Policy
> Watch Listed &
MRL Policy
> Corporate
Lending Policy
> Internal CRIB
Guidelines
> /KETQƂPCPEG
Policy
> Educational Loan
Policy
ICAAP Stress Testing Disclosure

GOVERNANCE AND RISK
RISK CULTURE
The Bank has instilled an organisation wide risk culture extending across all functions, operations and branches to ensure risk ownership
among all staff. The culture of risk ownership is supported by mandatory training and capacity building, a strong code of conduct applicable
to all employees and a remuneration framework that rewards a balanced approach to risk. This participatory mechanism aims to ingrain the
Bank’s risk policy into the attitudes, norms and behaviours of all personnel to create an environment for sustainable growth.
}ÕÀix\iÞiÌiÀ>ÌÃv,Ã
ÕÌÕÀi
Risk Management Policies Corporate & Risk Governance
Tone at the Top Code of Conduct

Risk
Culture
Corporate Values Mandatory Training
Risk Appetite Remuneration & Rewards
}ÕÀiÈ\ *Ã«Þ>>}},Ã
Risk Culture Risk Governance Risk Management Frame Work

> Tone at the top > Regulatory prescriptions & > Business strategy
> Corporate values directions > 4KUMENCUUKƂECVKQP
> Attitude towards risk > Basel best practice > Risk goals
> Risk appetite > Independent oversight > Risk management polices & procedures
responsibilities > Internal control framework
Risk Culture ICAAP

> 4KUMKFGPVKƂECVKQP
Risk Governance
> Risk assessment
Regulation
Risk Management Framework > Risk measurement
> Risk reporting
ICAAP
Quantitative Requirements
Credit Risk
Capital
Supervisory Review
Info & Cyber Risk

Market Discipline
Enterprise Risk
Management
Model
PILLAR 1
PILLAR 2
PILLAR 3
Operational Risk
Market Risk
Capital Model
Liquidity Risk
> Basel III minimum
Integrated Risk regulatory capital
Capital Model
Risk Management Framework
Disclosure & Reporting

RISK APPETITE > The stress testing framework is a key In addition, some of the subsidiaries are also
Understanding and establishing the Bank’s risk management tool within the Bank subject to external regulatory monitoring
risk appetite is an integral element of risk employed to ensure readiness of the with two direct subsidiaries, which are
management and the Bank has developed Bank to face adverse business strategies public listed companies, complying with
a comprehensive Risk Appetite Statement and decisions. During the year additional the regulatory reporting requirements of
which observes targets for a number of scenarios were introduced for stress the Colombo Stock Exchange (i.e HNB
ETKVGTKCUWEJCUECRKVCNCFGSWCE[RTQƂVCDKNKV[ VGUVKPIQHECRKVCNCFGSWCE[RTQƂVCDKNKV[ Assurance PLC and HNB Finance PLC).
CPFGHƂEKGPE[EQPEGPVTCVKQPNKOKVUNKSWKFKV[ and liquidity based on possible Also, HNB Assurance PLC and HNB General
positioning and limits for other risk types. UGVVNGOGPVTKUMQHƂPCPEKCNKPUVTWOGPVU Insurance Ltd., come under the regulations
of the Insurance Regulatory Commission
The objectives of the Bank’s Risk Appetite > The stress testing framework aims to of Sri Lanka, while HNB Finance PLC is
Framework (RAF) are as follows: capture material and relevant risks that regulated by CBSL.
apply across its business and apply
> Link the Bank’s business strategy, UVTGUUGUVJCVCTGUWHƂEKGPVN[UGXGTG
STRENGTHENING RISK MANAGEMENT
products and processes with associated
> The models and methodologies to IN 2022
risk levels
assess the impact of scenarios and As both internal and external developments
> Design Risk Appetite and thresholds UGPUKVKXKVKGUPGGFVQDGƂVHQTRWTRQUG EQPVKPWCNN[KPƃWGPEGVJGTKUMNCPFUECRGQH
in line with the Risk Management and are regularly reviewed to ensure their the Bank, risk management is a dynamic
Framework of the Bank effectiveness and relevance function which is constantly evolving in
response to the changing risk environment.
> Enable the Senior Management and the > The stress test framework, models, and Therefore, the Bank’s risk management
Board of Directors (BOD) to effectively results are subject to challenge and systems and processes are continually
monitor the material risks across various regular review reviewed and improved in response to
business units of the Bank, and take the changing risk factors. The Bank has
corrective actions, as and when required GROUP RISK also invested in the integration of modern
information communication technology
> Compliance to regulatory principles on Stringent management of risks across
solutions towards enhancing the risk
Risk Appetite requirements the Group is vital for the stability and
management process. The Bank also
sustainability of the entire Group. Hence,
continued its timely submission of Statutory
the Bank’s four direct subsidiaries come
STRESS TESTING Reports such as the ICAAP report to the
under the purview of the Integrated Risk
The Bank has in place a Stress testing Regulator despite challenges encountered
Management Division for regular review
framework which complies with the during the year.
and continuous supervision, while senior
guidelines issued by CBSL and the $CPMQHƂEKCNUCTGOGODGTUQHVJG$QCTFU
Basel Committee and encompasses all of subsidiaries ensuring high level of
UKIPKƂECPVCPFJKIJKORCEVTKUMCTGCUQH knowledge of the risk management activities
the Bank. Assessing the impact of adverse of the subsidiaries. The two insurance
scenarios on the Bank’s Capital Adequacy subsidiaries and HNB Finance PLC also
4CVKQ
%#4RTQƂVCDKNKV[CPFNKSWKFKV[CTG operate dedicated risk management
the primary objectives of stress testing, units, which regularly liaise with the Bank’s
which is evaluated following Stress Tests Integrated Risk Management division. The
for various risk factors. The outcome of Integrated Risk Management (IRM) division
the stress tests is communicated to the also receives the Regulatory Inspection
BIRMC and to the Board. In addition, Reports and Management Letters of
appropriate stress scenario development the Group entities to ascertain potential
methodologies applicable to each risk area areas of risk concern and follow up on
CTGENGCTN[URGEKƂGF6JGKFGPVKƂECVKQPQHMG[ agreed remedial action to strengthen the
macroeconomic factors impacting the Bank risk management environment of Group
supports this key process. The key factors companies.
driving the stress testing framework are as
follows:
> The stress testing framework is based

on an effective governance structure,
with clearly documented responsibilities
CETQUUVJGƂTUVNKPGUGEQPFNKPGCPFVJKTF
line of defence

GOVERNANCE AND RISK
Figure 7: Key Initiatives of the Bank to Strengthen Risk Management in 2022
CREDIT RISK
> Bank’s Baseline Credit and Collateral Framework
policies including the Product Lending Policies across
%QTRQTCVG$CPMKPI5/'/KETQƂPCPEG4GVCKN$CPMKPI
were reviewed and updated to ensure they are in line
with the current market environment.
> Post COVID-19 Revival Policy was established which
provides a framework for identifying and assisting
borrowers of HNB who were affected by the COVID-19
RCPFGOKECPFJCFHCEGFƂPCPEKCNFKHƂEWNVKGU
INTEGRATED RISK MANAGEMENT
> Credit Approval Structure was reviewed against new
> Bank’s ICAAP was reviewed during the year to ensure
02#U.4/ƂPFKPIU/QTCVQTKWOEJCPIGU4GIWNCVQT[
capital adequacy was maintained above minimum
changes and other emerging credit risks to the loan
regulatory requirements. Stress testing was conducted
book
for a number of variables including asset quality, asset
> Enhanced post loan disbursement reviews were concentrations, market risk factors etc.
carried out on the Advances Portfolio in order to
> Risk appetite statement of the Bank was also reviewed in
ensure compliance to Credit Policies and Guidelines.
order to align with changes within the macro and micro
Observations and learnings were shared with Business
economic factors of the country.
Units and Credit Teams in order to ensure qualitative
improvements in Credit underwriting and Credit > A series of industry reviews across various sectors were
Administration process. carried out in order to understand risk levels of these
industries and recommendations were extended to
> Training sessions were conducted for businesses and
business units.
credit approvers on the Bank’s credit policies and
guidelines, best practises and common lapses in credit > Conducted series of training sessions across business
underwriting of facilities as well as rescheduling / divisions to enhance knowledge of Risk Adjusted Return
restructuring of facilities. on Capital (RAROC) model, market outlook, good credit
governance practices etc.
> Directions issued by CBSL on Environment were
formalised and communicated on Social Risk
Management / Sustainable Finance / IFRS 9
%NCUUKƂECVKQP4GEQIPKVKQPVQVJGDWUKPGUUVGCOU
COMPLIANCE
> Data Analytics/AI tools were introduced to improve
monitoring of alerts generated by the AML system.
> Review mechanisms were strengthened on Compliance
Audits carried out covering critical areas in branches and
departments of the Bank.
> Quarterly group reviews on Risk, Compliance, Finance
and Audit was implemented to ensure regular
monitoring of compliance risk of Group Subsidiaries.
Strengthening Risk Culture

OPERATIONAL RISK
> Fraud risk policy and Customer blacklisting guideline
were reviewed to enhance the coverage to mitigate
emerging risks from changes in socio-economic
INFORMATION & CYBER RISK conditions.
> Risk Assessment Methodology & Risk Acceptance > Valuation policy was reviewed to address the changes
Criteria was introduced for the area of IT/Cyber Risk, in risk appetite of the Bank and to incorporate industry
which is in line with the ISO 27001 standard. best practices.
> A process for the Cyber Risk unit to conduct regular > Consolidated Recovery plan for the Bank was
security vulnerability assessments & application developed to identify credible options to survive a
security testing was established to support Bank wide range of severe and plausible stress scenarios.
L2 technical reviews, security projects testing and > Outsourced services were reviewed to identify possible
technology implementations. threats and continuation of business activities.
> Policies on Information and Cyber Security was > Guideline on provisioning and reporting of operational
reviewed to deal with emerging risks and assessed losses was reviewed to maintain the consistency and
risks with regard to the Bank’s Information and Cyber timely reporting of operational losses
Security metrics against embedded and emerging > Business Continuity Management process was
risks. evaluated to monitor the resilience of DR drills covering
> Risks covering Privilege Access Activities on mission critical units and systems to ensure their
Databases, Operating Systems and Applications were resilience
reviewed and assessed of critical systems > Bank’s Operational Risk Management Framework was
strengthened in line with the current operating model
> Business units and Branch Network was engaged
and best practices
to assess the technology & processes in order to
identify security vulnerabilities and to enhance security > Business Continuity Policy was reviewed to incorporate
awareness among the staff members. risks related to continuation of business due to
emerging developments in macro and micro economic
fronts such as shortages in various supplies, social
unrest etc.
MARKET RISK
> Treasury limits were reviewed more frequently in order to
assess micro and macro-economic factors on counterparty
limits.
> Bank’s liquidity and funding needs were periodically
reviewed.
> Stress testing was carried out regularly to understand the
impact to Bank’s liquidity position due to non-settlement
of USD denominated bonds.
> Impact analysis on Bank’s capital base was carried out
on the possible hair cut on Bank’s investment in USD
denominated bonds, USD deposit run, LKR deposit run
and immediate demand of FC borrowings by overseas
lenders including identifying strategies to minimize the
impact of these events.

GOVERNANCE AND RISK
PLANS FOR 2023

+PNKIJVQHVJGGZKUVKPIGEQPQOKEEQPFKVKQPUCPFHQTGECUVUHQTVJG$CPMKPIUGEVQTECPCPVKEKRCVGEQPVKPWGFOCETQGPXKTQPOGPVCNKPUVCDKNKV[
KPDQVJVJGINQDCNCPFNQECNEQPVGZV%QPUGSWGPVN[VJGCXCKNCDKNKV[QHCTGURQPUKXGCPFƃGZKDNGTKUMOCPCIGOGPVU[UVGOYKNNDGXKVCNHQTVJG
future sustainability of the Bank in the coming months. Hence the Bank has emphasized strengthening of risk management systems in the new
ƂPCPEKCN[GCT2NCPUHQTVJGPGYƂPCPEKCN[GCTKPENWFGU
Figure 8: Planned Initiatives to Strengthen Risk Management In 2023
CREDIT RISK IT & CYBER RISK OPERATIONAL RISK
> The Bank closely works with the impacted > Strengthen the L2 Cyber Risk > Implement a Governance, Risk
customers to understand their business challenges Assessment function by increasing and, Compliance (GRC) system
CPFECUJƃQYEQPUVTCKPVUKPQTFGTVQUWRRQTVVJGUG engagements with Business units to strengthen operational risk
businesses in their revival by way of facilitating to > Implement an End Point Detection monitoring.
expand their customer base through linking them & Response (EDR) solution to > Implement the computation
with supply chains of large corporates, offering enhance security of data and to method of Risk Weighted values
digital solutions to expand their sales and collection FGVGEVCPQOCNQWUFKIKVCNVTCHƂECPF for operational risk from the current
points, advisory services etc. Where required, the anomalous behavioural activity in the Basic Indicator Approach (BIA), to the
Bank also restructures customer facilities at an early Bank’s IT systems. Alternative Standardized Approach
stage to enable customers to service their bank (ASA).
> Implementation of a new Data
NKCDKNKVKGUDCUGFQPVJGKTHQTGECUVECUJƃQYU
%NCUUKƂECVKQPVQQNKPQTFGTVQ > Frequent stress testing to be
> Develop predictive models to carry out analytics RTQXKFGENCUUKƂECVKQPQHFKIKVCN conducted for operational losses
on the Bank’s loan portfolios across businesses and documents and emails via various and to be presented to Board
products to identify early warning signals of building communications channels. Subcommittees and BOD
up of portfolio stress.
> Support the rollout of the second phase of the
Loan Origination System for Corporate and SME
businesses. LOAN REVIEW MECHANISM INTEGRATED RISK MANAGEMENT
> Upgrade and integrate enhanced IRR assessment > E-Learning Module on LRM to be > Increase reviews on industries in order
models across all businesses to their respective loan hosted on the Talent Space. to understand new entrance/ exits to
origination modules elevated risk industries.
> Formalise evaluation standards by introducing > Further Strengthen periodic
IWKFGNKPGUHQTRTQLGEVƂPCPEGQXGTUGCUNGPFKPICPF assessment of Group Risk and
XCNWGEJCKPƂPCPEKPI Compliance monitoring.
> Bank will strengthen tools such as RAROC, used for
pricing guidelines of credit facilities.
> Exercises will be carried out throughout the branch MARKET RISK COMPLIANCE RISK
network to integrate new learnings from the current
market situation. > Review caps, loss limits, measurement > Enhance monitoring of Trade Based
of volatility of forex and securities. Money Laundering by monitoring
> Given the prevailing economic volatility, the internal
> Review and structure Treasury limits Dual Usage of goods and Vessel
credit guidelines will be reviewed frequently.
HQTEQPUKFGTKPIVJGRQUUKDNG Tracking, by linking the Dow Jones
> Periodic review of Industry Sectors will be one of data base to the Trade core banking
risks and current market and
the key measures carried out to identify vulnerable system through API connections.
economic challenges/ impact on debt
Industry Sectors in order to classify them as
restructuring etc. > Implement ITRS project (International
“Elevated Risk Industries”
Transaction Reporting System)
> Support the implementation of the Corporate initiated by CBSL to automate various
Loan Originating System which would enable International, Trade and Treasury
streamlining of the entire end-to-end credit related reports.
approval, security documentation and disbursement
process.

INTEGRATED RISK MANAGEMENT & CAPITAL MANAGEMENT
Regulatory Capital
HNB is required to maintain a CETI 1.0% of Risk-Weighted Assets as HLA as opposed to 1.5% as per Direction No 01 of 2016. Requirements
relevant to HNB are given below:
Figure 9: Regulatory Capital Requirements
Regulatory Requirement as at Bank’s Position as at

31.12.2020 31.12.2021 31.12.2022 31.12.2020 31.12.2021 31.12.2022
Common Equity Tier (CET) 1 (a) 7% 7% 7% 11.06%

Total Tier 1 (a) 8.5% 8.5% 9.5% 11.06%
Total Capital (a) 12.5% 12.5% 17.98% 18.16% 14%
(a) Including Capital Conservation Buffer and Capital Surcharge on Domestic Systemically Important Banks
Figure 9 depicts the components of the Bank’s capital and compliance with regulatory requirements.
During 2022 the CBSL issued new directives and regulations for capital adequacy and liquidity ratios of Banks
Capital Adequacy -Bank Capital Adequacy -Group

% % % %
20 20 20 20
16 16 16 16
12 12 12 12
8 8 8 8
4 4 4 4
0 0 0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Tier 01 Tier 01
CAR CAR
Regulatory Requirement (Total Capital) Regulatory Requirement (Total Capital)
Regulatory Requirement (Tier 1) Regulatory Requirement (Tier 1)
Risk Weighted Assets

Capital requirements are measured as a percentage of Risk Weighted Assets which are
calculated on the following basis as per CBSL direction No.1 of 2016:
> Credit Risk – The Standardised Approach

> Market Risk – The Standardised Measurement Method
> Operational Risk – Basic Indicator Approach

GOVERNANCE AND RISK
Figure 10: Risk Weighted Assets & Capital Charge
Item Risk Weighted Assets Capital Required

Rs.’000 2021 2022 2021 2022
Credit Risk 770,527,810 886,459,570 119.672,042

Market Risk 1,495,688 186,961
Operational Risk 96,612,704 9,129,262
Total 845,057,594 997,470,892
Total Assets Vs. Risk Weighted Assets Bank Total Assets Vs.Risk Weighted Assets Group
Rs Bn Rs Bn
2,000 2,000
1,500 1,500
1,000 1,000
500 500
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Total Assets Total Assets

Risk Weighted Assets Risk Weighted Assets
RWAs increased by Rs. 152 Bn during the year to Rs. 997 Bn. The difference between Total Assets and Risk Weighted assets increased during
the year to Rs. 694 Bn.
Capital Charge for Risk- Bank Capital Charge for Risk - Group
Rs Bn Rs Bn
150 150
120 120
90 90
60 60
30 30
0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Capital Charge for Credit Risk Capital Charge for Credit Risk
Capital Charge for Market Risk Capital Charge for Market Risk
Capital Charge for Operational Risk Capital Charge for Operational Risk
STRESS TESTING
Stress testing is a key component of Capital Planning. Extracts from the Bank’s comprehensive stress tests on the Bank’s CAR are given below
for the highest risk indicator in each major risk category.

Figure 11: Stress Testing Results On A Moderate Stress Scenario
Item Impact on CAR as at 30.06.2022

High Moderate Severe
Impact Impact Impact
NPL Stress Increase in NPL ratio for different portfolio and thereby increase 9
in provision.
Credit Risk – Asset Downgrade Increasing the direct non-performing facilities over the direct 9
performing facilities balance for the entire portfolio.
Credit Concentration Risk– Large Default of the higher borrowers by classifying the credit granted 9
Borrowers Default to them as non-performing.
Credit Concentration Risk– HHI % increase in HHI under stress. 9
Interest Risk in Banking Book To assess the long-term impact of changes in interest rates 9
(IRRBB) EAR and EVE (LKR) on Bank’s Economic Value of Equity (EVE) through changes in
the economic value of its assets and liabilities and to assess
the immediate impact of changes in interest rates on Bank’s
earnings through changes in interest rates on Bank’s earnings
through changes in its Net Interest Income (NII).
Foreign Exchange Risk % shock in the LKR exchange rate against all other currencies. 9
Liquidity Risk Deposit runs and rollovers 9
Global Financial Crisis (Multiple 1. Adverse changes in Foreign Exchange Rates 9
Scenarios) 2. Interest Rate Risk
.KSWKFKV[
Overall Credit Portfolio 1. NPL Stress 9
Deterioration 2. Asset Downgrade
%QPEGPVTCVKQP+PETGCUG
ACTIVITIES IN 2022
Integrated Risk Management
Key activities implemented to enhance the Bank’s management of integrated risk are as follows:
POLICY FRAMEWORK STRENGTHENING OF PROCESS MONITORING

AND REVIEWS
> 0GYUEGPCTKQUYGTGFGXGNQRGFVQKFGPVKH[TKUMQHPQPUGVVNGOGPVQHƂPCPEKCN > Conducted periodic
> Reviewed Risk instruments for Bank capital. industry studies covering
Management > The effectiveness of the Management Committees was evaluated including the many sectors including
Policies pertaining review of their KPIs to enhance their contribution to the Bank. tourism, construction,
to Integrated Risk automobile and
> Reviewed adequacy of Liquidity Management, Business Continuity Plans,
Framework, Model agriculture, which were
Cybersecurity safeguards and Working from Home practices of Group
Risk and Stress Testing UKIPKƂECPVN[KORCEVGF
businesses.
to ensure that they are by the pandemic and
in line with industry > Commenced concept development and implementation of a new policy decisions.
best practices. comprehensive risk rating models for all business segments and products of the
> Risk Appetite Statement
Bank.
> Reviewed and revised of the Bank was
the Risk Appetite > Risk adjusted return on capital (RAROC) assessment process was introduced reviewed periodically to
Statement and Risk for corporate and emerging corporate segments facilitating assessment of risk- understand the impact
Goals to align with based pricing when evaluating return on customer relationships. of adverse external
the current economic > ICAAP was strengthened by introducing Concentration Risk assessments factors to the Bank and
situation. for product, geography and maturity concentrations as well as Group Risk appropriate mitigants
assessment. were proposed to
minimise the impact.

GOVERNANCE AND RISK
CREDIT RISK MANAGEMENT

The Bank continued to cautiously manage credit risk during the year in accordance with the Credit Risk Policy whilst focusing on measures
to strengthen credit risk management capabilities in response to elevated risk factors in the operating environment. The combined impacts
of political and economic instability exerted increased pressure on clients, thereby heightening credit risk across industry and geographic
sectors. However, the Bank has exhibited commendable results in managing the credit risk.
DEFINITION OF CREDIT RISK CREDIT RISK COMPONENTS

Credit Quality
Rs Bn %
6JGTKUMQHƂPCPEKCNNQUUVQVJG$CPMKHC > Default Risk
1,200 10
EWUVQOGTQTCEQWPVGTRCTV[VQCƂPCPEKCN > Counterparty Risk
instrument fails to meet its contractual 1,000 8
> Concentration Risk 800
obligations. 6
> Residual Risk 600
4
> Recovery Risk 400
200 2
0 0
2018 2019 2020 2021 2022
2021 2022 %
Neither Past due nor impaired
Maximum Maximum
Past due not impaired
Exposure Exposure
Impaired
Rs. 000’s Rs. 000’s
NPA / Stage 3 Net Ratio
Maximum Credit Exposures 1,474,568,401 1,853,037,478 26%
- Total Assets subject to Credit Risk 1,699,591,581 29% Credit Exposure
- Off Balance Sheet Commitment subject to
Rs. Bn
Credit Risk 155,679,119 153,445,897 -1%
2,000
- Max Exposure to credit risk Gross Loans &
Receivables to customers 1,061,371,654 14% 1,500
Net exposure to credit risk of Loans & 1,000

Receivables to Customers 452,717,179 19%
500
Impaired Loans 102,325,088 61%
Provisions for impairment 87,240,402 65% 0
2018 2019 2020 2021 2022
- Individual Impairment 25,005,778 44,889,662 80%
Max Exposure On Balance Sheet
- Collective Impairment 27,711,258 42,350,740 Max Exposure Off Balance Sheet
0GV5VCIG4CVKQ 2.55% 3.4% 0.85% Net Exposure On Balance Sheet

Net Exposure Off Balance Sheet
CREDIT RISK REVIEW

In 2022, the Bank’s maximum exposures to credit risk increased by 26% while Impaired
.QCPUCUCQH)TQUU.QCPUCPF4GEGKXCDNGUYGTGCVTGƃGEVKPICDGVVGTRQUKVKQPVJCP
its peers. The Bank’s stringent oversight mechanism has demonstrated its effectiveness in
containing the NPAs despite the high-risk environment that prevailed during the year. By
working proactively with clients, the Bank was also able to reduce the number and value of
moratoriums during the year.
Provisions for impairments increased by 65% due to heightened threats of the operating
landscape. Allowance for individual impairments increased by 80% to Rs. 44.8Bn while
CNNQYCPEGHQTEQNNGEVKXGKORCKTOGPVUKPETGCUGFD[VQ4U$P

ACTIVITIES IN 2022
Key activities implemented to enhance the Banks management of credit risk are as follows;
POLICY FRAMEWORK AND REVIEWS

MONITORING
> Bank’s Baseline Credit and Collateral
> Directions issued by CBSL on
Framework policies including
Environment were formalised
the Product Lending Policies
and communicated on Social Risk
across Corporate Banking, SME,
Management / Sustainable Finance
/KETQƂPCPEG4GVCKN$CPMKPIYGTG
+(45%NCUUKƂECVKQP4GEQIPKVKQPVQ
reviewed and updated to ensure they
the business teams.
are in line with the current market
environment. > The scope of LRM reviews was further
enhanced to capture the learnings
from Capital / Interest write off
accounts in addition to the learnings
STRENGTHENING PROCESSES
HTQOPGYGPVTCPVUVQ5VCIG9CVEJ
> Credit Approval Structure was Listed and Management Review
reviewed against new NPAs, LRM List, & Parate Accounts highlighting
ƂPFKPIUOQTCVQTKWOEJCPIGU the areas for improvement in credit
regulatory changes and other underwriting and monitoring.
emerging credit risks to the loan book.
> .4/ƂPFKPIUYGTGEKTEWNCVGFVQ
> Enhanced post loan disbursement Corporate Management for remedial
reviews were carried out on the action and also followed up on the
Advances Portfolio in order to corrective measures taken to ensure
ensure compliance to Credit Policies effective implementation.
and Guidelines. Observations and
learnings were shared with Business
Units and Credit Teams in order to
ensure qualitative improvements CREDIT RISK GOVERNANCE
in Credit underwriting and Credit > The Risk Management Department
Administration process. function was further streamlined to
focus on the monitoring and advisory
> Strengthened controls over Margin
functions on credit risk, in order
Trading products in view of the
to enhance credit risk governance
volatility of underlying market
process.
variables.
STRENGTHENING RISK CULTURE
> Training sessions were conducted

for businesses and credit approvers
on the Bank’s credit policies and
guidelines, best practises and
common lapses in credit underwriting
of facilities as well as rescheduling /
restructuring of facilities.

GOVERNANCE AND RISK
CREDIT RISK GOVERNANCE Figure 12: Credit Risk Governance CREDIT RISK MANAGEMENT
The Risk Management Department function PROCESSES
was further streamlined to focus on the BOARD The Bank’s comprehensive Credit risk
monitoring and advisory functions on management process includes the following:
credit risk, in order to enhance credit risk
governance process. > Segregation of credit risk management
BIRMC BCC at branch level – Duties between
Approved Regulatory Capital Approach relationship management/ sales
and the loan approval process for
Complying with the CBSL Direction No.1
ERMCPC SME and retail segments are clearly
of 2016, the Bank uses the Standardised
segregated, facilitating high levels of
Approach to measure the capital charge for
specialisation. Separation of recoveries
%TGFKV4KUM#EEQTFKPIN[URGEKƂETKUMYGKIJVU
RMD has enhanced recoveries with monitoring
are applied to net counterparty exposures
at management and Board levels. Due to
KPFGƂPGFECVGIQTKGUCHVGTTGEQIPKUKPI
this segregation, it is possible measure,
a limited set of qualifying collateral.
monitor and make recommendations at
Template 9 : Credit Risk under Standardized CREDIT RISK portfolio level.
Approach: Exposures by Assets Classes and
> Pre-Assessment
Risk Weights on page 192 provide details > Independent Risk Assessment – The
according to risk weights while Template 8: > Portfolio Management
Credit Risk Management function
Credit Risk under Standardized Approach > Loan Review Mechanism independently reviews Corporate,
QPRCIGFGVCKNUVJGEQORWVCVKQPQH4KUM Emerging Corporates and SME facilities,
Weighted Assets for Credit Risk while Retail facilities are reviewed by the
CREDIT ADMINISTRATION
Centre of Excellence (COE) enabling high
Internal Risk Ratings (IRR) > Security Documentation levels of specialisation, and improved
The Bank’s current IRR model, which is > Disbursements turnaround times.
Basel III compliant serves to strengthen
our capability to manage default risk. The > Delegation of Authority - Approval
Bank is currently in process of recalibrating CENTRE OF ASPIRATION QHETGFKVHCEKNKVKGUCDQXGCURGEKƂGF
the IRR models in order to factor emerging threshold have been assigned to Credit
> Collection & Recoveries
development in macro and microeconomic Approval Committees. The Credit
variables. Risk management division provides
its assessment on credit facilities prior
to approval of facilities in order to
Risk Weighted Assets & Capital support decision making of the relevant
Charge for Credit Risk approving committee.
Rs Bn > Internal Risk Ratings – Risk ratings are

1,000 assigned to borrowers above a certain
800 threshold using the Internal Risk Rating
framework, which has been approved/
600
accepted by the regulator. Since 2021,
400 the Bank also computes the Risk adjusted
200 return on capital (RAROC) for corporates
and emerging corporates across the
0
portfolio to assess the risk returns of
2018 2019 2020 2021 2022
customer relationships.
Credit Risk RWA
Capital Charge for Credit Risk
> Collateral – The Bank obtains collateral as
a secondary recourse through mortgage
bonds over movable and immovable
RTQRGTV[IWCTCPVGGUNKGPUQXGTƂPCPEKCN
assets and assignments of receivables.
Regular valuations are carried out to
ensure adequacy of collateral throughout
the lifecycle of the loan.

> Security Documentation and Figure 13: segregation of duties for credit
Disbursement – The Centralised Security risk management
Repository centre checks completeness
and authenticity of documentation
including security documentation and Credit Application &
Evaluation
Business Unit/
compliance with pre-disbursement
Excellence
conditions. This function supports
Centre of
LOAN ORIGINATION
compliance and recovery processes
with required documentation while the Internal Risk Rating
pre-disbursement function ensures that
correct limits and rates are marked in
RMD
the system facilitating accurate billing,
Independent Risk
monitoring and recovery processes. Assessment
Committee
> Loan Review Mechanism – Post reviews Credit
of credit facilities are conducted covering
all business lines and LRM reports Credit Approval
are submitted to BIRMC and Board,
and learnings from LRM reports are
incorporated when Credit Policies are
reviewed.
DOCUMENTATION
& DISBURSEMENT
Credit Administration
> Management of Large Exposures – Security Documentation

Exposures of the 20 largest borrowers
are maintained within internal risk limits
Unit
and material exposures and substantial

exposures are monitored. Industry risk
Disbursement
limits are set to monitor concentration
risk facilitating early action on industries
with elevated risk.
> Portfolio Risk Management – Accounts

are monitored to identify early warning
Business
signs of asset quality deterioration. EWS,

Units
Monitoring &
Watch Lists and Management Review Follow Up
Lists, Likely to fall in to NPA lists are
POST DISBURSEMENT PORTFOLIO MANAGEMENT
used for alerting Business units, Risk

Management department, Management
Aspiration
Centre of
Committees and the Board. The Special Collection & Recoveries

Asset Management (SAM) Unit manages
accounts with Early Warning Signals to
manage credit risk of distressed accounts.
> Environmental and Social Risk Portfolio Risk

Management
Management – The Bank’s Environmental
and Social Risk Management
division provides the framework to
establish internationally accepted Loan Review Mechanism
best Environmental and Social Risk
RMD
Management practices including country

regulations and globally standards such Risk Reporting
as IFC Performance standards and ADB
Safeguards.
Escalation

GOVERNANCE AND RISK
CONCENTRATION RISK
6QOCPCIGRQVGPVKCNEQPEGPVTCVKQPTKUMVJG$CPMOCKPVCKPUCFKXGTUKƂGFRQTVHQNKQKPNKPGYKVJKVUTKUMCRRGVKVG6JG**+OQFGNKUWUGFVQ
quantify concentration risk and dashboards are reviewed at all levels of the risk governance structure to balance portfolio quality.
Portfolio Growth by Region (Mn) Dec’21 Dec’22 Exposure By Geography

(Rs. Mn) (Rs. Mn) 2022
3% 5% 2%
Central 41,645 1%
4%
Colombo 126,597
2% CENTRAL PROVINCE
Corporate/EC 2% EASTERN PROVINCE
Eastern 16,612 19,908 5% NORTH CENTRAL
3% 5% 2%
1% PROVINCE
FCBU 956 4% 1%
NORTH WESTERN
2%
Greater Colombo 68,765 71,090 2021 2% PROVINCE
5% NORTHERN PROVINCE
North Central 40,192 41,162 1%
75% SABARAGAMUWA
Northern 20,449 22,018 75% PROVINCE
SOUTHERN PROVINCE
North Western 69,882
UVA PROVINCE
Southern 42,774 WESTERN PROVINCE
OVERSEAS EXPOSURES
South Western
Uva/Sabaragamuwa 25,896 28,102
Overseas Exposure Exposure By Product

2022 2022
1%
10% 1% 5%1%
5%
1%
2%
7% Term Loan
Maldives Overdraft
10% 5% 3%1%
Cambodia 3% Leasing
8%
Uganda 7% Trade Finance
2021 Bangladesh 2021 Shanthi Housing
13%
Middle East 13% Pawning
68%
Others
82%
Credit Card
88%
66%

Exposure By Counter Party Exposure By Industry Sector
2022 2022
1%
2% 3%
Agriculture, Forestry & Fishing
8% Arts, Entertainment &
5% Large Corporates 16% Recreation
44% Mid Market Construction & Infrastructure
7% SME Development
15% Consumption
Micro Finance 2% Education
1%
Personal Loans 7% Financial Services
5% 3% 3% 4% 5% 16% Health Care, Social Services &
7% Housing Loans 2% 16% Support Services
5% 42% Dream Drive 1% 5% Information Technology And
2021 Credit Cards 1% 2021 Communication Services
6% 7% 11%
10% Lending To Ministry of Finanace
3% Leasing Lending To Overseas Entities
Pawning 11% 3% 1%
1% Manufacturing
21% 5% 10%
2% Staff Loans 1% 16% 12% Professional, Scientific &
Technical Activities
Individual Tourism
Others 3% 1% Transportation & Storage
1% Wholesale & Retail Trade
1%
19% 9%
5% 15%
DEFAULT RISK
&GHCWNVTKUMTGOCKPGFUKIPKƂECPVKPFWGVQVJGEJCNNGPIKPIOCETQGEQPQOKEEQPFKVKQPUVJCVRTGXCKNGF&GHCWNVTKUM+PFKECVQTUKPENWFGPQP
RGTHQTOKPITCVKQUCIGKPIQHGZRQUWTGUCPFENCUUKƂECVKQPQHVJGRQTVHQNKQWUKPI+PVGTPCN4KUM4CVKPIOQFGNU
NPA / Stage 3 Net as a % of Loans & Aging of Past Due Loans

Advances 2022
% 1% 7%
4.0 1%
3.5 1%
4%
3.0
2.5
Current
2.0 1-30 DPD
11% 2% 4%
1.5 31-60 DPD
9%
1.0 61-90 DPD
0.5 91-120 DPD
2021
0.0 121-150 DPD
151-180 DPD
2018 2019 2020 2021 2022
85% >180 DPD
75%

GOVERNANCE AND RISK
OPERATIONAL RISK
DELAY IN NEW IT SYSTEM
The Bank faces a high level of operational risk due to its island wide extensive market IMPLEMENTATION
exposure across all economic sectors, given within the prevailing unpredictable market
conditions. Cognisant of the volatile operating environment, the Bank has invested in > Delays in implementing proposed new
monitoring and control mechanisms as well as specialised human resources and technical IT solutions within departments could
support systems for optimum management of operational risks to facilitate rapid responses result in escalation in prices, import
to emergent threats while capitalising on emergent opportunities. The process was restrictions etc.
spearheaded by developing a consolidated Recovery Plan for the Bank considering Business
Continuity Policy, Contingency Funding Plan, Internal Capital Adequacy Process and Crisis
Communication Plan. Further, the Fraud Risk Management Policy and Customer Blacklisting DETERIORATION OF SERVICE LEVELS
Guideline were reviewed to address new and emerging risks. OF THE VENDORS
$CPMoUQRGTCVKQPCNTKUMRTQƂNGCNUQRTGUGPVGFCEJCNNGPIKPIRQUKVKQPFWGVQVJGHCNNQWVHTQO > Deterioration in standards of vendors

the sluggish economic environment that prevailed and disruptions to operations, suppliers such as insurance services providers,
and external services providers. due to changes in the processes
and costs could impact the Bank’s
processes and continuation of high
RISKS ARISING THROUGH THIRD RISK DUE TO PREVAILING ECONOMIC quality of services.
PARTY SERVICES PROVIDERS AND POLITICAL INSTABILITY
> These include delays, non-provision > Many risks arise due to economic
UNEXPECTED CHANGES IN
or unavailability of agreed services and political volatility impacting
OPERATIONAL CONDITIONS DUE TO
due to staff layoffs transportation the continuation of business and
POLITICAL INSTABILITY
FKHƂEWNVKGUCPFRQYGTHCKNWTGU6JG disruption of services.
impact of this risk is the adverse > In such cases the Bank faces the risk
customer experiences, delays and of service disruptions and threat to
consequent reputational damage. IT SYSTEM FAILURES AND business continuity.
UNEXPECTED ERRORS
> IT system related risks impact the Bank

DISRUPTIONS TO SMOOTH through the deterioration of service OUTSOURCED BUSINESS RISK
FUNCTIONING OF BRANCH levels, losses and also reputational VULNERABILITIES
OPERATIONS damage. > Outsourced service providers were
> 1RGTCVKQPCNGHƂEKGPE[QHDTCPEJ impacted by high staff turnover and
QHƂEGUYCUCFXGTUGN[KORCEVGFFWG FKHƂEWNV[KPTGUQWTEGCNNQECVKQP
INCREASING TREND IN STAFF
to a number of constraints during
TURNOVER
the year including power cuts, the
fuel crisis, restricted banking hours > The trend of increasing employee EMERGING RISKS DUE TO
etc. This situation had the impact of turnover due to migration and being OPERATIONAL PROCESS CHANGES
disrupting customer services. recruited by competitor Banks and
Financial Institutions impacts upon the > Such process changes to respond
customer experience while causing limitations in supplies could increase
THEFT AND FRAUD a dearth of staff for specialized errors and result in customer
(INTERNAL AND EXTERNAL) operations dissatisfaction.
> The risk of theft within and without

the organisation could result in the
INCREASING TREND IN FRAUDULENT
deterioration of service levels, losses
ACTIVITIES
and reputational damage.
> The growing trend of fraud by
customers through the use of
CHANGES IN VALUES OF MOVABLE fraudulent documents, identity theft,
AND IMMOVABLE ASSETS impersonation, money laundering
GVEEQWNFTGUWNVKPƂPCPEKCNNQUUGU
> The rapid changes in the value of reputational damage and possible
assets decreases the collateral values lawsuits.
and security margins.

DEFINITION OF OPERATIONAL RISK OPERATIONAL RISK COMPONENTS Operational Losses & Recoveries
Rs. Mn Rs. Mn
The possibility of losses due to > Compliance Risk
800 600
inadequate or failed internal processes, > Legal Risk 700 500
people or systems, or from external > Financial Crimes Risk 600
events. 500 400
> Technology Risk
400 300
> Information & Cyber Risk 300 200
> Business Continuity Management 200
100 100
> Conduct Risk
0 0
2018 2019 2020 2021 2022
OpLosses
Recoveries
Operational losses by event type -2021/2022
2022
No of Incidents
1%
Internal Fraud 800

49% 24% 700
External Fraud
Employment Practices & 600
Workplace Safety 500
Clients, Products & Business 400
28% 26% Services 300
200
Damage to Physical Assets
2021 100
Business Disruption & System
0
Failures
11% 2018 2019 2020 2021 2022
Execution Delivery & Process
35% Management
8%
18%
Operational Risk Review

The frequent economic disruptions in the form of energy shortages and shortages of other essential goods, coupled with continuous political
unrest resulted in a high level of operational risk during the year under review, which posed multiple threats towards business continuity and
QRGTCVKQPCNGHƂEKGPE[QHVJG$CPM4GURQPFKPIVQVJGWPCXQKFCDNGGZVGTPCNFGXGNQROGPVUVJG$CPMGUVCDNKUJGFC/CPCIGOGPV%QOOKVVGG
formally approved by the Board, to continually evaluate external socio-economic developments and provide vital feedback and advice with
regards to navigating the unpredictable risk landscape that materialised during the 12 months under review. The Committee, which reports
directly to the Board, comprises the top management of the Bank, including the CEO, COO, CRO and CFO and met once a week. Although
mainly focused on managing the heightened operational risk, the Committee was actively involved in developing solutions to address many
new challenges faced by the Bank and its stakeholders while accommodating all regulatory changes.

GOVERNANCE AND RISK
PLANNING ORGANISING STAFFING LEADING CONTROLLING
The multi-disciplinary Committee An alert and Our highly-trained Providing The control actions
was formulated with a diverse range response matrix and experienced inspirational and established in
of skills and expertise to enable were developed staff were an prudent leadership managing the risks
an in-depth understanding of the and successfully invaluable asset in was essential to included monitoring
dynamic external developments deployed across safeguarding the enable teamwork compliance with
and comprised representation from the organisation to Bank’s operations and to navigate the regulatory directions
Business units, Risk Management, monitor liquidity, and market position headwinds faced and focussing on
Finance and Treasury which enabled capital and during the uncertain by the Bank during ensuring smooth
a holistic assessment of potential impairment risks, times that prevailed. the year. The Bank’s functioning of day
and existing threats that escalated which provided To maximise on senior leadership to day banking
during the year. The objectives of the invaluable and the Bank’s human responded operations. The Bank’s
Committee were to: vital forecasting capital expertise, promptly by stringent controls
to facilitate rapid separate teams becoming actively ensured the delivery
> Proactively manage the Liquidity,
decision - making. were created and engaged in of our trademark high
Capital, Forex and impairment
entrusted with the reviewing actions standard of services to
and interest rate risks stemming
task of overlooking taken to prepare our customers through
from the volatile external
different aspects of against any possible the effective delivery
situation.
the risk factors. risks stemming of services despite the
> Safeguard staff members from the from liquidity, many challenges in the
fallout from adverse economic foreign exchange operational area, while
and political developments and interest rate making sure the Bank
> Review and comply with volatility. accommodated all
regulatory directives, including changes to regulations.
market policy changes
The Bank implemented a hybrid working Operational Risk Governance Figure 14: Operational Risk Governance
model, which varied in intensity with the The Bank’s operational risk policy was
external threats as we strived to maintain reviewed and revised with Board approval, BOARD
high levels of service excellence throughout during the year to safeguard the Bank from
our branch network for the convenience of external threats. The BIRMC continued to
our customers. We continued our transition engage with the Board in management of
from the Basic Indicator Approach which Risk including operational risk while the BAC BIRMC
was used to calculate the capital charge for Board Audit Committee (BAC) maintained
operational risk, to the more sophisticated stringent oversight of internal controls, while
Alternative Standardised Approach by liaising with internal and external auditors.
submitting the relevant documentation The Board and Board subcommittees ERMCPC ORSC
for regulatory approval. Adoption of the are supported in risk management by
Alternative Standardised Approach may the Executive Risk Management & Credit
enable the Bank to reduce the capital Policy Committee (ERMCPC) in addition to RMD - Operational Risk
charge for operational risk which in turn the Operational Risk Steering Committee
YKNNGPJCPEGVJG$CPMoURTQƂVCDKNKV[+P (ORSC) which supports the BIRMC in Preventive Detective
addition, various processes were reviewed identifying, measuring, monitoring and measures measures
and adjusted in response to the prevailing managing Operational Risk. The Operational
external conditions while ensuring regulatory Risk Unit maintained a close surveillance on
compliance. the risk landscape through Preventive and
Detective measures.

KEY ACTIVITIES IN 2022
POLICY FRAMEWORK AND REVIEWS STRENGTHENING PROCESSES
> Fraud Risk Policy and Customer blacklisting Policy were > Business Continuity Management process was evaluated to
reviewed to enhance the coverage to mitigate emerging risks monitor the resilience of DR drills covering mission critical units
from changes socio-economic conditions. and systems to ensure their resilience.
> Business Continuity Policy was reviewed to incorporate > Bank’s Operational Risk Management Framework was
risks related to continuation of business due to emerging strengthened in line with the current operating model and best
developments in macro and micro economic fronts such as practices.
shortages in various supplies, social unrest etc. > Consolidated Recovery Plan for the Bank was developed to
> Valuation Policy was reviewed to address the changes in identify credible options to survive a range of severe and
risk appetite of the Bank and to incorporate Industry best plausible stress scenarios
practices.
> Guideline on Provisioning and reporting of operational losses
was reviewed to maintain the consistency and timely reporting
of operational losses
MONITORING STRENGTHENING RISK CULTURE
> Outsourced services were reviewed to identify possible threats > Conducted online training programs covering all staff in the
and continuation of business activities. Branch network.
Approved regulatory capital approach TGIWNCTN[VQTGƃGEVTGIWNCVQT[TGSWKTGOGPVU Risk Review of New Products &
The Bank is in the process of transitioning to and changes to the Bank’s risk appetite and Processes
the Alternative Standardised Approach from KPVGTPCNDGPEJOCTMUYJKEJTGƃGEVVTGPFU The Bank has set out clear policies and
the current Basic Indicator Approach for observed externally and internally. procedures for introducing new products or
calculation of regulatory capital. The change amending or discontinuing existing products
in calculation methodology is expected to Internal Loss Data Capturing & or delivery channels, to minimise associated
reduce the capital charge in the future. Reporting risks.
The Bank uses Operational Risk Dashboards
Managing operational risk in accordance with Basel guidelines on Risk Weighted Assets & Capital Charge
Operational risk is managed by utilising the internal losses including potential losses and for Operational Risk
following tools. “near misses” for material risks. These are
reviewed by ORSC, ERMCPC and BIRMC Rs. Bn
to identify potential threats and determine 100
Risk & Control Self-Assessment (RCSA)
appropriate action to manage the same. 80
The frequency of the RCSA process was External loss incidents are captured on best
increased to quarterly assessments, which 60
effort basis and reviewed in relation to the
has enhanced operational risk management, internal control environment. 40
through more frequent operational risk
20
KFGPVKƂECVKQPOGCUWTGOGPVCPFOQPKVQTKPI
Root Cause Analysis 0
Business units are required to assess their
own processes and controls on a quarterly The Bank has adopted a system to review 2018 2019 2020 2021 2022
basis, which are reviewed by the Operational material loss incidents to ascertain the
Risk Unit to estimate the operational risk root cause and these learnings are used to Operational Risk RWA
improve the control environment under the Capital Charge for Operational Risk
RTQƂNGQHVJGGPVKTG$CPM
Operational Risk Management function.
Key Risk Indicators (KRI)
Risk Matrices
KRIs provide early warnings of escalations
in risks and are monitored continuously to Risk matrices are used to consolidate and
initiate timely and effective action. Triggers prioritize risks considering the potential
and thresholds are reviewed and revised impact and likelihood of occurrence.

GOVERNANCE AND RISK
MITIGATING OPERATIONAL RISK Point Objectives (RPO) and Recovery

6JG14/HTCOGYQTMUGVUQWVVJGHQNNQYKPIURGEKƂEVQQNUHQTOCPCIKPIQRGTCVKQPCNTKUM Strategies. This was augmented by a
Business Continuity Management and Public
Health Contagion Plan in 2020 following the
Strengthening emergence of the COVID-19 pandemic and
Risk Culture Business Continuity policy documents and
RNCPUCTGWRFCVGFTGIWNCTN[VQTGƃGEVVJG
regulatory changes.
Regular BCP and Disaster Recovery tests

are conducted to cover all critical systems
Mitigating
Assessment of Insurance and the Mission Critical Units (MCUs) of
Operational
Outsourcing Cover the Bank. BCP tests are reviewed by the
Risk
Bank’s Internal Audit department and
the Bank has also established a Business
Continuity Steering Committee (BCSC)
and a Disaster Management Team (DMT)
to oversee the BCP strategy. Awareness
Scenario sessions and Newsletters are used to
Planning educate the staff regarding the Business
Continuity Management process, while
maintaining clear communications with
> Risk Culture – The risk culture at the > Assessment of Outsourcing Activities’ – the public to communicate any emergency
Bank is driven by the top with all senior The Bank has developed and deployed responses. The Bank has continued to
personnel leading by example to inspire a comprehensive Outsourcing Policy FGOQPUVTCVGWPƃCIIKPITGUKNKGPEGFWTKPI
all grades of staff towards accountability VJCVFGƂPGUVJGCEVKXKVKGUVGTOUCPF the pandemic era and in the post-COVID
and risk ownership. It is a key preventive conditions relating to outsourced era, demonstrating the effectiveness of
VQQNCPFKUPWTVWTGFVJTQWIJCƂVHQT activities and the Compliance Division the business continuity process and has
purpose policy framework, governance monitors the same. Detailed KYC and also successfully adopted new operating
structure, regular training to increase risk due diligence tests are conducted before models such as telecommuting and product
awareness and effective internal controls. engagement or renewal of existing innovation with solutions like SOLO and
contracts to assess the AML/CFT risks MOMO to support customers.
> Insurance – A comprehensive insurance that may arise regarding the outsourcing
cover is in place securing the Bank arrangements. The Operational Risk
from low frequency- high severity Unit carries out a risk-based review of
and high frequency- low severity loss critical outsourcing activities on a need
events. Adequacy and effectiveness of basis. The Operational Risk Unit will also
insurance covers were reviewed during ensure that all critical outsourcing service
the year with the assistance of external providers have a satisfactory BCP and
consultants. A new Cyber insurance cover that they perform regular tests on its
was put in place in view of heightened BCP to ensure disaster readiness and a
threat levels. return to normal operations as quickly as
possible.
> Scenario planning - The operational
risk unit uses scenario planning mainly
Business Continuity Planning & Disaster
in its BCM and related activities to
Recovery
demonstrate and make uses of the
development of appropriate responses The Bank has conducted a comprehensive
to few potential loss events that can Business Impact Analysis (BIA) and has
or likely to take place together such KFGPVKƂGFOKUUKQPETKVKECNWPKVUETKVKECN
CUƂTGUGEWTKV[DTGCEJGVE5EGPCTKQ processes and necessary resources, which
planning was continued in 2022 to factor have been clearly documented together with
KPEJCPIGUKPVJGEQWPVT[oUTKUMRTQƂNG Recovery Time Objectives (RTO), Recovery
stemming from the economic downturn.

INFORMATION AND CYBER RISK
6JGTCRKFCFQRVKQPQPFKIKVCNƂPCPEKCNUGTXKEGUYKVJKPVJGEQWPVT[HQNNQYKPIVJG%18+&RCPFGOKEJCUHCUVVTCEMGFVJGKPVGITCVKQP
of information technology solutions both internally within the Bank and among external stakeholders, thereby both facilitating greater
convenience as well as mitigating potential security threat. Therefore, the Bank continued to focus on cyber security risk mitigation during the
year by investing in governance structures, policy frameworks, competence and surveillance of monitoring tools.
DEFINITION OF CYBER RISK COMPONENTS OF KEY TRENDS IMPACTING BANK’S CYBER RISK IN 2022
CYBER RISK
4KUMQHƂPCPEKCNNQUUQRGTCVKQPCNFKUTWRVKQP > Increase in sophisticated malware, ransomware and
or damage, from the failure of the digital > Information Risk phishing attacks around the globe
technologies employed for informational > Cyber Risk > Unprecedented levels of online activity have made
and/ or operational functions via electronic systems more expose to cyber-attacks worldwide.
> Financial Crime Risk
means from the unauthorized access, use,
> Technology Risk > New cyber threats in the form of supply chain attacks
FKUENQUWTGFKUTWRVKQPOQFKƂECVKQPQT
have dramatically changed the risk landscape
destruction of systems, services or data.
INFORMATION & CYBER RISK REVIEWS A BREAKDOWN OF GLOBAL CYBERCRIME DAMAGE

COSTS PREDICTED IN 2023
> Information Security Policy & Procedure review
> Privilege Access Management (PAM) reviews > $8 Trillion a Year.
> Vulnerability assessments on critical internet facing IT infrastructure > $667 Billion a Month.
> Independent L2 Firewall Reviews > $154 Billion a Week
> Digital/online banking application Reviews > $21.9 Billion a Day.
> End User level security controls reviews > $913 Million an Hour.
> Cyber Risk reviews related to various critical business functions and > $15.2 Million a Minute.
branch operations
> $255,000 a Second.
> Third party service provider/vendor information security risk reviews
> Application software patch management reviews (Source: Cybersecurity Ventures)
Information & Cyber Risk Figure 15: Information and Cyber Risk
CYBERSECURITY THREAT STATISTICS 2022 Governance Governance
> Global Average total cost of a data breach: The Information and Cyber Security Risk
USD 4.35 Million Management Unit which operates within BOARD
> Average cost of a critical infrastructure data the Risk Management Department of
breach USD 4.82 Million the Bank, reports to the CRO who in turn
reports independently to BIRMC. Given BIRMC
> Average cost savings associated with fully
the growing importance of Information
deployed security AI and automation USD
CPFE[DGTTKUMIQXGTPCPEGVJGƂTUVNKPG COO
3.05 Million
of defence was further strengthened with
> Average cost of a ransomware attack, not the appointment of a Chief Information
including the cost of the ransom itself USD 5GEWTKV[1HƂEGT
%+51YJQTGRQTVU CRO CISO
4.54 Million directly to the COO. Accordingly,
> Average difference in cost where remote work policy formulation is under the purview IInformation
nformation and Cyber Security
was a factor in causing the breach versus when of the CISO while implementation Risk Management Unit
it wasn’t a factor USD 1 Million and compliance is overseen by the
> Average cost of a breach in the United States, Information and Cyber Security Risk
the highest of any country: USD 9.44 Million Management Team. The segregation
of functions has brought about greater
(Source: IBM)
focus on the implementation and
monitoring aspects of the cyber risk
management function.

GOVERNANCE AND RISK
ACTIVITIES IN 2022
Key initiatives implemented to enhance the Bank’s management of Information and Cyber risk are as follows:
STRENGTHENING POLICY FRAMEWORK STRENGTHENING PROCESSES
> IT & Cyber Risk Assessment Methodology and Risk > Continuous enhancements were made on security alert monitoring
Acceptance criteria was introduced to support Information capabilities via the Security Operations Centre (SOC) in order to
& Cyber Security Risk Management of the Bank. strengthen the Bank’s cyber security surveillance.
> Policies on Information and Cyber Security were reviewed > $CPMYKFGKORNGOGPVCVKQPQHCPGYFCVCENCUUKƂECVKQPVQQNYCU
to assess the Bank’s Information and Cyber security metrics GZRGFKVGFKPQTFGTVQRTQXKFGENCUUKƂECVKQPQHFKIKVCNFQEWOGPVU
against embedded and emerging risks to ensure that they and emails via various communication channels.
are in line with industry best practices. > New security controls were introduced to remote access platforms.
> Digital Rights Management (DRM) solution was implemented to
enhance security of data transfers with third party entities.
MONITORING > Implemented a Mobile Application Management (MAM) to provide
> Reviewed Privilege Access Management. secure email access via mobile devices.
> Conducted periodic reviews of the Bank’s Internal IT/IS > Implemented Data Loss Prevention controls over the cloud email
Management by Information & Cyber Security Risk Team platform.
in addition to independent reviews conducted by Internal > Conducted phishing simulations to test resilience of Bank and
audit and CISO Bank staff to potential threats and assess Bank’s readiness against
phishing attacks.
INFORMATION SECURITY > Periodic reviews of the effectiveness of > Cyber Risk Dashboard – Communicates
MANAGEMENT the Bank’s Internal IT/IS Management developments in Information & Cyber Risk
#UCHWVWTGQTKGPVGFƂPCPEKCNUGTXKEGU by IT Security Team - Internal Audit and to Executive and Board Committees on
RTQXKFGTVJG$CPMJCUKFGPVKƂGFKPHQTOCVKQP CISO carry out separate reviews to assess a monthly basis. This dashboard includes
communication technology assets as vital the effectiveness of the Information and a tracker of Information and Cyber Risk
strategic assets and has deployed a fully- Cyber Risk Management processes and related incidents, Top 10 cyber risks,
ƃGFIGF+PHQTOCVKQP%[DGT5GEWTKV[ controls. Cybersecurity incidents reported during
2QNKE[6JGRQNKE[FGƂPGUVJGOCPCIGOGPV > Monitoring Cyber Threat Intelligence – OQPVJU+5CWFKVƂPFKPIUCFJGTGPEG
approach towards the Bank’s information Review up to date information on current level of security standards, Cybersecurity
assets, hardware and software, with the and emerging cyber threats with a view awareness activities, Security Operations
primary objective of protecting these assets to initiating necessary action in a timely Centre statistics, malware & phishing
HTQOKFGPVKƂGFKPVGTPCNCPFGZVGTPCNVJTGCVU manner. related updates, update on BCP and DR
to ensure that all statutory and contractual drill, update on Endpoints exposed with
> >Ì>
>ÃÃwV>ÌiÌ`}Þ -
obligations are met, and the brand is risks, etc.
This initiative supports safeguarding
protected. It also provides guidance for of information assets through clear > IT disaster Recovery Plan – A key
systematic management of information categorization of access to documents component of the Bank’s Business
assets throughout its lifecycle supporting the and uses leading IT tools. Continuity Plan, this is tested regularly
operational and strategic needs of the Bank and amended as appropriate.
> Controls over Data in Transit, At Rest and
in compliance with regulations and internal > Privilege Access Management (PAM)
in Use'OCKNƃQYCPF75$%&41/
risk appetite. Additional tools used to ensure – Provide granular level visibility over
restrictions implemented together with
continuous protection of its information activities carried out by privilege users in
organization wide awareness campaigns
assets from emerging threats include the the banking systems.
enhance levels of information security.
following:
> Security Information & Event > Security Operating Centre (SOC)
> Layered Defence Model – The Bank has Management (SIEM) Solution - All critical – Strengthens the Cyber Security
implemented a layered defence model systems and databases are integrated surveillance and incident response
to support management of Information for log analysis enhancing capabilities of process with 24x7 security alert
Security. identifying IT & Cyber risks monitoring function.
> Third Party Vulnerability Assessments > Surveillance & Upgrading – Continuous
and Third-Party Security & Compliance upgrade of anti-virus/ Malware/
Reviews – Carried out to manage risks Ransomware protection.
arising from connectivity with third parties.

MARKET RISK compared to 14.5 % as at end 2021. Total
The unpredictable and unfavourable developments within the market during the year had an loans and advances increased by Rs. 712.8
unavoidable impact on consumer demand, the stock market, liquidity, foreign exchange and billion to reach Rs. 1.15 trillion, recording
VJGEQUVQHETGFKVCUYGNNCUIQQFUCPFUGTXKEGUYJKEJKPVWTPKORCEVGFVJGRTQƂVCDKNKV[QHVJG a 6.6 % growth during the eight months
Bank. Consequently, the valuations of portfolios of assets and liabilities were also impacted ending in August 2022, compared to an
as most transactions involve at least one element of market risk. Within this turbulent increase of Rs. 1.4 trillion, which was a 14.5 %
GPXKTQPOGPVVJG$CPMJCUOCPCIGFKVUGZRQUWTGUD[RTWFGPVN[DCNCPEKPIRTQƂVCDKNKV[CPF growth reported in the same period of 2021,
stability within its predetermined risk appetite. mainly due to the impact of the exchange
rate depreciation on foreign currency loans.
Deposits expressed as a percentage of total

DEFINITION OF MARKET RISK COMPONENTS OF MARKET RISK
assets stood at 62% as at end December
Potential losses arising from factors > Interest Rate Risk 2022. The deposit base of the banking
that affect the overall performance of > Foreign Exchange Risk sector expanded by Rs. 1.9 trillion during
VJGƂPCPEKCNOCTMGVUYJKEJECPPQVDG the eight months ending in August 2022
> Equity Price Risk and stood at Rs. 14.8 trillion recording a 14.9
GNKOKPCVGFVJTQWIJFKXGTUKƂECVKQP
> Commodity Price Risk % growth, mainly due to growth of rupee
FGRQUKVUEQORCTGFVQCPKPETGCUGQH4U
trillion and a corresponding 11.6 % growth
Market Risk Review recorded in the same period of 2021.
The Bank’s market risk exposures arise mainly from the Bank’s Non-Trading Portfolio (Banking
The growth in borrowings continued to
Book) which accounts for 26% of Total Assets and 29% of Total Liabilities. Interest Rate Risk
decrease as a result of the decline in foreign
+44CPF(QTGKIP'ZEJCPIG
(:4KUMCTGVJGOQUVUKIPKƂECPVEQORQPGPVUQHOCTMGVTKUMCU
currency borrowings. Borrowings of the
the Bank has minimal exposure to commodity price risk and equity risk as these account for
banking sector moderated, recording a 5.8
less than 5% of the total risk weighted exposure for market risk at the close of the year.
% growth with an increase of Rs. 126.5 billion
during the eight months ending in August
Rs Mn 2022 2021 CPFTGCEJGF4UVTKNNKQPCUCVGPF
Assets Subject to Market Risk August 2022, compared to an increase of
Rs. 282.1 billion and a corresponding 16.5 %
Cash & Cash Equivalents growth recorded in the same period of the
Balances with Central Bank 25,820 previous year.
Placements with Banks -
During the Year ending in December 2022,
Derivative Financial Assets 927 VJG5TK.CPMCPTWRGGTGEQTFGFCUKIPKƂECPV
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQT 112 depreciation of 45.5% against the US dollar
loss HTQO4UCUCVGPFVQ4UCU
CV&GEGODGT
Financial assets measured at amortised cost - debt and 448,792 160,678
other instruments The equity market witnessed a steep fall
Loans & Receivables to other customers 876,250 since early February 2022 as panicked
investors started withdrawing their funds
Financial assets measured at fair value through other 2,707
amid increased macroeconomic concerns
comprehensive income
and political instability. However, this
Liabilities subject to Market Risk declining trend moderated since May
Due to Banks 6,105 17,076 CNVJQWIJUKIPKƂECPVXQNCVKNKVKGUYGTG
observed in several instances, and the
Derivative Financial Liabilities 26
market showed signs of improvements since
Due to Other Customers/Deposits from customers 1,407,800 1,075,709 July 2022. Overall, the ASPI and S&P SL 20
Other Borrowings 24,748 index recorded negative growth of 18.8 %
and 25.2 %, respectively, during the year
Subordinated Liabilities 22,914 until end September 2022.
In line with the continued tight monetary policy stance, the Central Bank increased its policy
interest rates by a cumulative of 950 bps on four occasions during 2022, thereby increasing
SDFR and the SLFR to 14.5 % and 15.5 %, respectively. Tightening monetary policy led to a
deceleration in year-on-year growth of loans and advances to 6.8 % as at end August 2022,

GOVERNANCE AND RISK
ACTIVITIES IN 2022
The Market Risk Management unit implemented the following actions during the year:
STRENGTHENING POLICY STRENGTHENING PROCESSES MONITORING

FRAMEWORK
> Stress testing was carried out regularly to understand the > Counterparty limits were
> Treasury limits were impact to Bank’s liquidity position due to non-settlement of recalibrated to capture the
reviewed more frequently USD denominated bonds. impact of the economic
in order to assess micro > Impact analysis on Bank’s capital base was carried out on the situation.
and macro-economic possible occurrence of hair cut on Bank’s investment in USD
factors on counterparty denominated bonds, USD deposit run, LKR deposit run and
limits immediate demand of FC borrowings by overseas lenders.
Market Risk Governance Approved Regulatory Capital Approaches

As the apex body involved in risk The Bank is in the process of adopting the more advanced Internal Model Approach, while
management the Board has overall using the Standardised Measurement method as required by CBSL Direction No.1 of 2016 in
responsibility for managing the market risks line with Basel III requirements for computing regulatory capital for Market Risk. Accordingly,
that the Bank is exposed to during the year. VJGECNEWNCVKQPQHTGIWNCVQT[ECRKVCNKUDCUGFQPURGEKƂGFTKUMYGKIJVKPIUCRRNKGFVQPGV
The Board is assisted in its duties by Board GZRQUWTGUKPFGƂPGFECVGIQTKGUCUUGVQWVKP6GORNCVG/CTMGV4KUM7PFGT5VCPFCTFKUGF
Integrated Risk Management Committee Measurement Method.
(BIRMC) who have oversight responsibility
for this key topic, while the Executive Risk Market Risk Management
Management and Credit Policy Committee Market Risk is managed in accordance with the Asset and Liability Management (ALM) and
(ERMCPC) made proposals on policy to Treasury Policy which support management of Interest Rate Risk, Investment and the Foreign
monitor risks. Market risk exposures and Exchange Risk. The trading portfolio is managed by Treasury while the Non-Trading portfolio
RTQƂVCDKNKV[KUUWRGTXKUGFD[#UUGVCPF is impacted by both the Bank’s business lines and Treasury. The Balance Sheet and Income
Liability Committee (ALCO) ensuring that Statement implications of market risk are summarised below.
risks taken are commensurate with the
rewards and managed within the Risk
Appetite Statement (RAS) and the Treasury Portfolio Banking Book Trading Book
is involved in managing both the banking/ “Hold Until Maturity” and “Intend to Actively Trade”
trading book and the asset and liability “Available for Sale”
position of the Bank. Accordingly, duties Line Items > Deposits > Bills & Bonds (Treasury
of the Bank’s Treasury Operations are > Loans Portfolio)
UGITGICVGFKPVQ(TQPV1HƂEG/KFFNG1HƂEG > Derivatives (Forward, Swaps
> Bonds (Investment Portfolio)
CPF$CEM1HƂEGKPNKPGYKVJDGUVRTCEVKEG and Options,)
6TGCUWT[/KFFNG1HƂEG
6/1GPUWTGU > Bills & Bonds (Treasury
VJCV6TGCUWT[(TQPV1HƂEGFGCNUYKVJKP Portfolio)
limits set out in the Bank’s risk appetite > Derivatives
CPF6TGCUWT[$CEM1HƂEGTGEQPEKNGUCPF Balance Sheet Value Historical Cost Mark to Market daily
escalates key issues promptly. The Market
Income Statement Net Interest Margins Net Interest margins
Risk Management Unit of Risk Management
Department (RMD) independently measures, + Net Change in Value (Mark to
monitors and reports on market risk Market
exposures using Market Risk Dashboards Risk exposure > Repricing risk All components of market risk
and assists in review of the Bank’s market > Basis risk
risk related policies and exposure limits, > Forex Risk
supporting ALCO, ERMCPC, BIRMC and the
Board with information required for decision
making.

BOARD Risk Weighted Assets & Capital Charge
for Market Risk
Rs.Bn
BIRMC 1,500
1,200
ERMCPC ALCO 900

600
300
,/Ài>ÃÕÀÞ`ì"vwVi
0
Market Risk Policy System Enabled Real 2018 2019 2020 2021 2022
Framework Time Monitoring
Market- Risk RWA
Capital Charge for Market Risk
Market risk management is a critical aspect in implementing Asset and Liability Management (ALM) framework of the Bank. Key tools and
processes used to manage market risk include the following:
> Market Risk Limitss.KOKVUEQPVCKPVTCFKPICEVKXKVKGUYKVJKPCURGEKƂGFTCPIGKPNKPGYKVJVJG$CPMoU4KUM#RRGVKVG5VCVGOGPV6JGUGCTG

reviewed and approved by the BIRMC as well as BOD and are regularly reviewed by ALCO and ERMCPC
}ÕÀi£È\>ÀiÌ,ÃÌÃ
Limit Type Activity Limit Target Risk Area
Exposure 6TCFKPI+PXGUVOGPVKPHQTGKIPEWTTGPE[ƂZGFKPEQOG Governs the trading/investment in long-term securities

securities (excluding investment in Sri Lanka Government with reputed issuers, with minimum credit ratings of A or
Treasury Bills & Bonds equivalent.
Investment in Sri Lanka Government Treasury Bills & Governs trading & investments in Sri Lanka Government
Bonds/CBSL Securities Treasury Bills & Bonds that are denominated in Sri Lanka
Rupees.
Cap on total investment on Gov. Securities Will govern overall exposure to government securities in
terms of balance sheet exposure
Standing Deposit Facility (SDF) With CBSL Governs Money Market Deals with CBSL
Interbank Money Market/Trade borrowings in FCY both Limits the Bank’s exposure to liquidity risk arising from
in Sri Lanka and Outside funding mismatches and over reliance of FC borrowings
to generate liquidity
Cap on inter-bank call borrowing / Call lending .KOKVUVJG$CPMoUGZRQUWTGVQCFXGTUGƃWEVWCVKQPUKP
inter-bank call money rates and liquidity risk arising due
to market liquidity
Tolerance Rate tolerances Governs minimum / maximum deviation from market
rates on interest / exchange rates to ensure no undue
risks are undertaken
Amount Tolerances Govern maximum transaction size undertaken on a
currency, instrument or by a dealer.
Tenor Tolerances Protects the bank from both market and counterparty risk
that could arise with time.

GOVERNANCE AND RISK
> Value at Risk (VaR) - The VaR of a portfolio > Bank also periodically conducts - A global banking crisis which could
is the estimated loss that will arise on simulation on severe liquidity crisis event affect short term interbank FC liquidity
VJGRQTVHQNKQQXGTCURGEKƂGFRGTKQFQH can be triggered off by any one or more - Worst case scenario comprising of the
time (holding period) from an adverse of the following events taking place: above stress situations (scenarios 1,2
OCTMGVOQXGOGPVYKVJCURGEKƂGF - Loss of reputation due to rumours CPF
RTQDCDKNKV[
EQPƂFGPEGNGXGN6JG8C4 of a large loss, fraud, management - Loss of wholesale savings and deposits
model used by the Bank is based upon misdemeanour etc.
CEQPƂFGPEGNGXGNCPFCUUWOGU Results of the stress testing are tabled at
5GXGTGTCVKPIFQYPITCFG
PQVEJGU
1-day and a 10-day holding period. It is ERMCPC/ ALCO/ BIRMC for their reference
or to below investment grade)
based mainly on historical simulation. on ALM decisions.
The model generates a wide range of - News/speculation of an impending
plausible future scenarios for market price takeover/merger.
movements considering market data and .CTIGTGIWNCVQT[RGPCNV[SWCNKƂECVKQP
observed relationships between different of accounts by Auditors/other
markets and prices. compliance related loss of reputation.
> Stress Testing - The Bank conducts stress The following stress scenarios were applied
testing on key components of market to assess the impact of a liquidity squeeze
risk including interest rate, foreign on the Bank:
currency, equity and gold to understand - A run on the Bank by depositors
the potential impacts. This information
is used to provide direction in managing - Loss of short-term interbank LKR
RQTVHQNKQUQRVKOK\KPIRTQƂVCDKNKV[CPF liquidity
liquidity.
Stress Testing On Projected NII

Results of stress tests carried out on Interest Rate Risk for its Loans and Advances portfolio and the Fixed Income Securities portfolio are
given below
Item 2022 2021

Rs.’000 100 bp 100 bp 100 bp 100 bp
Parallel Up Parallel Down Parallel Up Parallel Down
Rs. ’000 Rs. ’000 Rs. ’000 Rs. ’000
#UCV&GEGODGTUV (2,664,071) 5,171,597 (5,478,992)

Average for the Year
5,246,966

Maximum for the Year 5,705,000
6,008,522

Minimum for the year (6,050,000) 4,160,462

Minimum for the year 1% 2% 5%

Fixed Income Risk Orginal CAR CAR after Change
Fixed Income Total Portfolio 14%
Fixed Income Trading Portfolio 14% 14% 14% 14%

Interest Rate Risk in Banking Book (IRRBB)
The differences in re-pricing of Rate Sensitive Assets (RSA) and Rate Sensitive Liabilities (RSL) can lead to IRRBB, which impact future interest
income and expenses and its economic value. Different maturity buckets are used to analyse the Bank’s interest rate sensitive assets and
KPVGTGUVTCVGUGPUKVKXGNKCDKNKVKGUVQFGVGTOKPGUWKVCDNGUVTCVGIKGUVQQRVKOK\GGCTPKPIUDCUGFQPKFGPVKƂGFICRUCPFHWVWTGKPVGTGUVTCVG
HQTGECUVU6JGOQFKƂGFFWTCVKQPICRCRRTQCEJKUWUGFHQTCPCN[UKPIEJCPIGUKPGEQPQOKEXCNWGQHGSWKV[YJKEJTGSWKTGUVJGOCRRKPIQH
assets and liabilities into different time buckets based on their residual maturity as set out below depicting an increased/decreased sensitivity.
(Rs Mn) Upto 1 1-3 3-6 6-12 1-3 3-5 Over 5 Non Total
Month Months Months Months Years Years Years Sensitive (Rs.Mn)
Assets and Off-Balance Sheet 525,445 121,782 116,825 248,222 99,184 175,415 1,742,756
Exposures
Liabilities and Off-Balance Sheet 212,079 266,726 188,999 112,654 92,250 1,727,877
Exposures
Period Gap (144,944) (199,846) 59,222
28,118
Cumulative Gap 495,798 151,008 196,760 224,878
RSA/RSL 1.58 0.46 0.88
FOREIGN EXCHANGE RISK

The sharp rupee depreciation heightened the Foreign Exchange Risk faced by the Bank during 2022 and foreign exchange exposure of the
Bank was judiciously monitored and prudently managed to balance the Bank’s exposure risks against customer demand. During the year 98%
of the Bank’s foreign currency exposure was in US dollars.
The Bank has implemented a broad risk management process to manages this risk which includes currency swaps, exposure limits and
8C4/CTMGVTKUMGZRQUWTGQHVJG$CPMoUQXGTPKIJVHQTGKIPGZEJCPIGRQUKVKQPUKUOGCUWTGFWUKPIFC[8C4CVEQPƂFGPEGNGXGN6/1
OQPKVQTUNKOKVUKPTGCNVKOGCPFCVURGEKƂGFHTGSWGPEKGUKPCEEQTFCPEGYKVJVJG$CPMoUEQORTGJGPUKXGOCTMGVTKUMOCPCIGOGPVNKOKVUVTWEVWTG
to ensure compliance with Bank’s risk appetite. Trigger points are escalated to CRO, MD/ CEO or Board of Directors depending on the
potential loss that may arise.
The Bank’s exposure to FX risk as at the end of the reporting period is given below. Foreign exchange exposures are subject to stress testing
D[CRRN[KPIUJQEMUDGVYGGPVQVQGUVKOCVGVJGKORCEVQPRTQƂVCDKNKV[CPFECRKVCNCFGSWCE[QHVJG$CPM#EEQTFKPIN[CEJCPIGKP
exchange rate has a minimal impact on CAR as given in the table below.

GOVERNANCE AND RISK
Net Open Overall Overall

Position Exposure in Exposure
(NOP) Respective in LKR 000’
(000) Foreign
Currency
(000)
United States Dollar 1,759,264 646,529,562

Great Britain Pound 5
Euro 17 51,418,450
Japanese Yen 1,485 875,280
Singapore Dollar 4 5,677 1,555,544
Other currencies in USD 768 80,844
Total Exposure 2,079,802
6QVCN%CRKVCN(WPFUCUCV&GEGODGTUV
6QVCNGZRQUWTGCUCQH%CRKVCN(WPFUCUCV&GEGODGTUV 10.21%
8C4
FC[UV&GEGODGT
8C4
FC[UV&GEGODGT
The Bank conducts stress testing on foreign exchange exposures by applying shocks between 5% to 15% to estimate the impact on
RTQƂVCDKNKV[CPFECRKVCNCFGSWCE[#EEQTFKPIN[CEJCPIGKPGZEJCPIGTCVGJCUCOKPKOCNKORCEVQP%#4CUIKXGPKPVJGVCDNGDGNQY
Magnitude of shock 5% 10% 15%
Foreign Currency Risk Original CAR CAR after Change

All foreign currencies 14%
USD/LKR 14%
EQUITY PRICE RISK

As at end Dec 2022, the Bank’s equity portfolio stood at Rs. 111 Mn and is managed taking a long term view. Stress testing conducted at 10%
to 40% change in equity prices indicate no change in CAR. The bank conducts mark-to-market calculations on a daily basis for held-for-trading
and available-for sale portfolios and VaR calculations on a 10-day basis. Year-end positions are summarized below.
2022 2021
Magnitude of shock Exposure Rs.Mn VaR (99%, 10 day) Exposure Rs. Mn VaR (99%, 10 day)
Equity (MV) 111 Mn 17.86 Mn /P 11.94 Mn
COMMODITY PRICE RISK

The Bank’s commodity price risk was impacted by the sharp increase in gold prices as this risk factor is limited to the extent of the Pawning
portfolio. During the year under review, the Bank’s careful management of the pawning portfolio and the use of conservative loan to value
ratios, have ensured that the risk exposure was limited to 5% of Total Market Risk exposures. It is noteworthy that the regulatory approach is to
treat the exposure in line with Foreign Exchange Risk as described in the Approved Regulatory Capital Approach on Market Risk.

LIQUIDITY RISK
Farsighted and cautious liquidity risk management within the liquidity constraints experienced during the year has enabled the Bank to
support its asset base and strategic goals.
DEFINITION OF LIQUIDITY RISK Liquidity Ratios 2022 2021
A bank’s inability to meet its short-term Statutory Liquid Asset Ratio (SLAR) 33.95% 28.02%
contractual obligations without sustaining
Liquidity Coverage Ratio 252.37% 207.60%
unacceptable losses.
Net Loans to Total Assets 56.02% 64.99%
Loans to Customer Deposits 79.65% 89.04%
Liquid Assets to Short Term Liabilities 118.89% 78.25%
Commitments to Liquid Assets 31.19% 68.11%
Commitments to Total Loans 20.89%
AƞœĈĳœħ΄$ĳƵĎƂƊĳǙāåƖĳŜœ΄ĀƼ΄ƂŜĈƞāƖ Liquidity Gap

2022 based on behavioural analysis
10% Rs. Mn Rs. Mn

1% 250,000 500,000
2% 27% 200,000 450,000
150,000 400,000
100,000 350,000
50,000 300,000
12% 0 250,000
2% Deposit- CASA -50,000 200,000
2% 34% Deposit - Others -100,000 150,000
1% Bank Borrowings -150,000 100,000
2021 -200,000 50,000
Other Borrowing -250,000 0
Senior/ subordinate debts
upto 1M
1-3M
3-6M
6-9M
9M-1Y
1-3Y
over 5Y
3-5Y
49% Share Holders Funds
Net Liquidity Gap (Rs. Mn.)

Cumulative Gap (Rs. Mn.)
60%
Liquidity Risk Review to stabilise the exchange rate and correct TKIJVTGƃGEVUVJGIQXGTPCPEGUVTWEVWTGU
+PEQPUKFGTCVKQPQHTKUKPIKPƃCVKQPCT[ anomalies observed in the market interest identifying roles of those with responsibility
pressures, the Central Bank tightened rate structure. Such sizeable adjustments for managing liquidity risk. The Board,
monitory and liquidity conditions to in the policy interest rates were in addition BIRMC, ERMCPC and ALCO regularly review
unprecedented level in 2022. Since the to the upward revision of SRR by 200 bps, reports on the Bank’s liquidity indicators to
monetary tightening cycle that began in effective September 2021. ensure that they are managed within agreed
August 2021, the Central Bank’s key policy parameters
interest rates, i.e., SDFR and SLFR, have Liquidity Risk Governance
been raised by 950 bps, and a larger portion A comprehensive liquidity risk management
of that adjustment took place in April 2022. framework is in place which includes a
Policy interest rates were increased by contingency plan encompassing both
700 bps in April 2022, with the intention contracted and un-contracted liquidity
of arresting the build-up of any demand positions as summarized in Liquidity
FTKXGPKPƃCVKQPCT[RTGUUWTGUKPVJGGEQPQO[ Ratios Table. The column on the extreme
CPFRTGGORVKPIVJGGUECNCVKQPQHKPƃCVKQP
further while providing the required impetus

GOVERNANCE AND RISK
Figure 17: Liquidity Risk Management Framework
Hard Limits & Ratios

Decision Limit
Regulatory Limit
Adjustment
Boundaries & Prudent Risk Management Guidelines
Internal Model Based Measures Balance Sheet Based Ratios

> Cumulative Gap Limits > Loan: Asset Ratio
Bank-wide limits Proposed by ALCO,
> Long term funding limits > B/S Turnover
per Legal Entity Decision by Board
> Deposits to purchased funds ratio
> Limits on committed lines
Operational Limits Max Cash Proposed by Treasury/

Max unsecured Secured Limits on large
for steering of 1WVƃQYNKOKV Etc. ALM Decision
Funding Limits Funding Limits transactions
liquidity risk position net securities by ALCO
Limits for Max Unsecured Liquidity Gap Total Foreign Set by CRO/Treasury
/CZ%CUJ1WVƃQY
Trading Units Lending 2TQƂNGU Currency Funding decision by ALCO
Liquidity Risk Management

The Bank has implemented a range of liquidity risk indicators which indicate changes in assets and liabilities to enable continuous and
effective monitoring of liquidity risk. Appropriate funding activities to maintain desired levels of liquidity in line with the Bank’s risk appetite
JCXGDGGPKFGPVKƂGFCPFNKSWKFKV[NCFFGTURTQDCDKNKUVKECPCN[UKUCPFUVTGUUVGUVUCTGWPFGTVCMGPVQGXCNWCVGNKSWKFKV[TGSWKTGOGPVUQHVJG$CPM
WUKPIDQVJUVQEMCPFƃQYCRRTQCEJGU6JG$CPMJCUKORQUGF+PVGTPCNNKOKVUYJKEJCTGOQTGUVTKPIGPVVJCPVJGTGIWNCVQT[TGSWKTGOGPVUKPNKPG
with the Bank’s overall approach to risk management. Liquidity gaps are monitored based on the behavioural analysis of the Bank’s assets and
liabilities, historical rollover patterns, drawdown of unutilized overdrafts and disbursement of approved but undisbursed loans.
Figure 18: Managing Liquidity Risk
Funding Plan Managing Liquidity Risk Managing intraday Identify Contingent Managing Regulator
liquidity risk Funding Requirement
Identify concentration risk in Establish liquidity policy Maintain liquidity buffers Early warning indicators Maintaining LCR
banking book and appetite
Pricing liquidity risk via Monitor intraday limits and Daily clearing and Conduct liquidity Reporting on liquidity
transfer pricing mechanism carry out stress testing settlement simulations assets and reserves
within the Bank
As a component of liquidity risk PGIQVKCVGFYKVJRGGTDCPMUHQTUWHƂEKGPV through foreign currency swaps for short
management, the Bank measures its liquidity liquidity buffers in accordance with the to medium term liquidity. Exposure limits
position against all major currencies at Bank’s Contingency Funding Plan. in terms of regulatory and internal, regular
both individual and aggregate levels to management information to ALCO/BIRMC/
OCKPVCKPRQVGPVKCNTKUMUYKVJKPURGEKƂGF %QORGVKVKQPCOQPIƂPCPEKCNKPUVKVWVKQPU BOD manages the liquidity risk that could
limits while liquidity commitments resulting and market interventions, challenge the arise from overreliance of borrowings and
from loan disbursements and undrawn mobilising of low-cost LKR customer cross currency liquidity generation, are
overdrafts are also monitored to assess deposits. Moreover, with the dearth of actively managed.
adequacy of funding sources. An adequate lending opportunities in foreign currency
margin in high quality liquid assets and and access to low cost foreign currency
diverse funding sources are maintained and funding lines the bank has taken a strategic
contingency funding agreements have been decision to generate low cost LKR funding

(WPFKPI&KXGTUKƂECVKQP
Deposits from customers account for 99% of funds making this the primary source of funding for the Bank. Total Capital of the Bank was
Rs. 142 Bn as end of December 2022.
Credit Ratings
The credit ratings of the Bank at the close of the year are as follows
Rating Type Long Term National Rating
Issuer Fitch Ratings Lanka Ltd

Rating A (lka) / RWN
Date Issued VJ,CPWCT[
What can change rating up There is limited scope for upward rating action given the RWN. The resolution of the
Rating Watch could be driven by reduced foreseeable risks from funding stresses, both
at the bank as well as the sector and the bank’s ability to service its obligations in local
and foreign currency is not hindered.
What can change the rating down > HNB’s National Rating is sensitive to a change in the bank’s creditworthiness relative
to other Sri Lankan issuers.
> 6JG490TGƃGEVUTKUKPITKUMUVQVJGDCPMoUTCVKPIHTQOHWPFKPIUVTGUUGUYJKEJEQWNF
lead to a multiple-notch downgrade.

GOVERNANCE AND RISK
COMPLIANCE RISK
As a responsible corporate citizen with an unblemished track record in integrity, the Bank ensured full compliance with all regulatory
IWKFGNKPGUFWTKPIVJG[GCT%QORNKCPEG4KUMKUOCPCIGFD[CFGFKECVGF%QORNKCPEG&GRCTVOGPVJGCFGFD[VJG%QORNKCPEG1HƂEGTYJQ
reports directly to the Board Integrated Risk Management Committee (BIRMC), ensuring the stringent oversight of all regulatory requirements.
The Bank maintains a zero-tolerance approach for non-compliance with regulatory requirements and ensures that systems and policy
frameworks are updated with the regulatory changes to facilitate compliance.
DEFINITION KEY ACTIVITIES OF THE COMPLIANCE

FUNCTION
%QORNKCPEGTKUMKUFGƂPGFCUVJGTKUMQH
NGICNQTTGIWNCVQT[UCPEVKQPUƂPCPEKCN > Foreign Exchange Regulations
loss, or loss of reputation that a bank may > Financial Crime
suffer as a result of its failure to comply
> Anti-Money Laundering & Know Your
with all applicable laws, regulations,
Client
codes of conduct and standards of good
practice > FATCA
> Group Compliance
Compliance Risk Governance Compliance Risk Review Figure 19: Compliance Risk Governance
The Compliance function of the Bank falls In response to the prevailing adverse
within the purview of the Bank’s Compliance macroeconomic conditions, a range of BOARD
Department which is empowered to ensure regulatory changes were implemented
that the Bank complies with all legal and during the year including regulations
Digital Banking
regulatory requirements including CBSL, on Anti- Money Laundering (AML) and
Committee
Committee
BIRMC
RPTRC
SEC, CSE, SLAASMB etc., and encompasses Foreign Exchange Operations. The Bank
Audit
DQVJƂPCPEKCNCPFQRGTCVKQPCNEQORNKCPEG has maintained a rigorous focus on all new
The compliance function also extends to the as well as existing compliance guidelines.
Bank’s wide-ranging policy framework. While Compliance Division has carried out regular
the Compliance Department reports directly compliance checks on branches and
to BIRMC, it operates independently of the departments to ensure compliance to the Compliance
Compliance
p Department
p
Risk Management Department but is invited regulatory guidelines.
to attend meetings of the Board Audit
Committee, Board Related Party Review
Committee and the Special Board Digital
Banking Committee.

ACTIVITIES IN 2022
The following projects were implemented to strengthen this key function:
STRENGTHENING AML/ KYC PROCESSES STRENGTHENING COMPLIANCE STRENGTHENING GROUP

WITH ALL LEGAL AND REGULATORY COMPLIANCE RISK
> An on-site review was conducted by REQUIREMENTS
KPMG on the Bank’s Risk Management > Quarterly group reviews on risk,
framework and practices on Anti > Review mechanisms were EQORNKCPEGƂPCPEGCPFCWFKVYGTG
Money Laundering and Terrorist strengthened on compliance audits implemented to ensure regular
Financing. carried out covering critical areas in monitoring of compliance risk of
> The on-boarding process of Politically branches and departments of the Group subsidiaries.
Exposed Persons was strengthened. Bank.
> The Bank migrated to the new GoAML

reporting system introduced by the
CBSL and live operations commenced
in February 2022.
Mitigation QHVJG$CPMUVTGPIVJGPKPIVJGƂTUVNKPG Plans for 2023

As a key mechanism of compliance risk of defence. New recruits and promoted
employees receive a compliance training Anti-Money Laundering
mitigation, the Bank regularly reviews and
tailored to meet the demands of their new > Enhanced monitoring of trade-based
updates its policy framework to incorporate
role and function. An e-learning AML module money laundering by monitoring dual
changes in regulations, emerging threats, the
further supports knowledge enhancement on usage of goods and vessel tracking by
Bank’s processes and learnings from industry
Anti Money Laundering covering all regions. linking the Dow Jones data base to the
experiences and our own. All policy revisions
The Bank also conducted compliance case trade core banking system through API
are reviewed by the relevant Board sub-
studies for its branch network to mitigate connections.
committees and approved by the Board of
Directors. potential compliance risk.
> Implementation of the ITRS project
During the year compliance risk awareness was (International Transaction Reporting
The Bank ensures that the Compliance
enhanced by: System) initiated by CBSL to automate
Division is staffed with the relevant expertise
various international, trade and treasury
to enable full compliance with all regulations
> Attendance at local & foreign training related reports, is on track.
CPFKUJGCFGFD[VJG%QORNKCPEG1HƂEGT
programmes, international summits,
#UVJGTGIWNCVQT[HTCOGYQTMQHVJGƂPCPEKCN
YGDKPCTUCPFQPNKPGEGTVKƂECVKQP
services industry continues to become
courses to update employee knowledge
increasingly more complex, it is essential that
regarding the latest regulations.
employees are regularly trained in compliance
requirements to mitigate compliance risk > The E - Learning System, which has been
that may arise from lack of awareness. The updated with the latest regulations,
Compliance Division plays a key role in AML courses, forex courses, & FAQs, for
enhancing awareness on regulations, internal knowledge sharing.
policies and best practices in the industry by
integrating these into the training programmes

GOVERNANCE AND RISK
REPUTATION RISK > Availability of a Code of Ethics applicable evaluation of alternative strategies which
#UCU[UVGOKECNN[KORQTVCPVƂPCPEKCN to all employees ensures that corporate are deliberated in depth to chart its course.
institution, the Bank’s brand name and values and expectations of conduct are Strategic risk was continually reviewed
associated reputation are a core component clearly communicated throughout the during the year to accommodate the highly
of the Bank’s reputation risk. Reputation Bank. volatile macroeconomic environment that
risk may arise from the potential adverse > Comprehensive customer engagement prevailed and strategies were recalibrated to
impact to the Bank’s reputation, such as mechanisms are in place including the align with the dynamic market conditions.
unethical practices, regulatory actions, contact centre, which is operative 24x7,
customer dissatisfaction, negative/adverse enabling customers to contact the Bank Mitigation
publicity, inability to meet obligations, etc. for any assistance, report of a complaint The strategic risk mitigation system includes
Bank was able to prudently manage its and also enables the Bank to address any a dedicated Strategic Planning Department
reputation risk by maintaining transparent concerns promptly. which oversees the strategic planning
and timely communications with its > Print and electronic media exposure is process. Inputs from RMD strengthen the
stakeholders, despite disruptions due to monitored for any adverse remarks or process through testing of key assumptions
adverse economic conditions that prevailed customer complaints on the Bank and its and analysis to identify and assess potential
in the country. As an important initiative, the services. areas of concern. Due care is exercised to
Bank implemented measures to safeguard facilitate compliance with all regulatory
> A comprehensive training and
the interests of its customers while ensuring requirements including those anticipated
development plan facilitate employee
EWUVQOGTVQWEJRQKPVUHWPEVKQPGFGHƂEKGPVN[ for implementation within the forecast
learning on the subject and sharing of
to serve the needs of the communities period. Key risk drivers and other material
learnings while supporting competency
it operates in. Additionally, awards and matters are monitored to identify potential
development in this area.
CEEQNCFGUTGEGKXGFFWTKPITGƃGEVVJG areas of regulation, facilitating early
high esteem in which the Bank is held. > 4GURQPUGRNCPUCPFKFGPVKƂECVKQPQH understanding of related impacts and issues.
spokespersons in the event of a crisis In addition, the Bank engages external
Mitigation supports organization readiness to resources to support its strategic planning
handle reputation risk events. processes, injecting global expertise to
Spearheaded by its leadership, the Bank has
created a work environment that nurtures enhance the management of strategic
Monitoring risk which contributed towards optimizing
ethical and professional behaviour as well
as creating an environment of transparency A scorecard approach has been deployed to risk and returns by facilitating a thorough
and accountability across the Bank. Other assess Reputation Risk and the Reputational understanding of risks and opportunities.
mechanisms in place to safeguard the Risk Task Force (RRTF) which operates Regular communications are maintained with
reputation of the Bank include: under the supervision of ORSC reviews, employees on progress of Projects through
reputational risk trigger events and manages meetings, dedicated monthly newsletters
> Continuation of COVID-19 responses attributes that impact the reputation of the and the intranet to ensure that employees
– Providing moratoria according to Bank, reducing the capital requirement. were engaged and clearly understood their
CBSL guidelines for customers whose These pre-emptive measures support role in the transformation.
ECUJƃQYUJCXGDGGPCFXGTUGN[ scoring, reducing capital allocation under
impacted as a result of the pandemic. reputational risk. Monitoring
– Establishing Business Continuity Strategic risk assessments are conducted in
Management and conducting DR drills STRATEGIC RISK both quantitative and qualitative dimensions
covering mission critical units. The Bank’s strategies represent the future using a scorecard to compute capital
sustainability of the Bank and its ability to allocation for strategic risk as a part of
– COVID-19 response team to identify
continually create value for its stakeholders Pillar II risk assessment under ICAAP. The
potential areas of concerns and
through its operations. Strategic risk may Bank plans to operationalize a strategic risk
address them promptly.
arise if the Bank’s future business plans dashboard through which major strategic
– Extending outreach through mobile risks can be escalated to the BSIRC through
and strategies are inadequate to meet
ATMs, implementation of IPG as well the BIRMC which would support the BSIRC
desired business goals and expectations
as SOLO, MOMO etc. in reviewing macroeconomic strategic
including protecting and enhancing
– Product innovation to meet customer the Bank’s competitive position and opportunities and risks available within and
and community challenges that shareholder returns. The leadership of outside Sri Lanka.
emerged during the year. the Bank is collectively responsible for
providing strategic direction and undertake

CONDUCT RISK LEGAL RISK Bank retains reputed legal counsellors to
Conduct risk is any action of a bank or the Legal risk can arise from the current and safeguard the Bank’s interest in dealing with
banking industry that leads to customer prospective risks to earnings or capital due litigation against the Bank.
dissatisfaction or negatively impacts market to violations of, or non-conformance with
stability due to unacceptable or unexpected laws, rules, regulations, prescribed practice, Monitoring
behaviour in meeting bank’s obligations or ethical standards issued by the regulator Legal risks are analysed using a scorecard to
towards its stakeholders. Managing conduct HTQOVKOGVQVKOG#URGT+51.GICN ascertain the additional capital requirement
risk has become increasingly critical in the Risk can be of the following types: under Basel II, pillar 2 calculations. Factors
banking industry as the number of risk considered for the assessment of legal
events continues to rise. Underlying factors > Litigation Risk risk include, Legal Risk governance and
contributing to elevated conduct risk include > Contract Risk framework, claims arising from / deprived
failures in internal controls, noncompliance, > Regulatory Risk due to defective documentation in contracts,
negligence and failure to incentivize the legislative / regulatory developments
right behaviours etc… > Structural Risk
resulting in claims against / deprivation of
making claims etc.
The challenging economic conditions, Mitigation
immediately in the aftermath of a global The Bank has implemented a legal risk The Legal Department prepares a quarterly
pandemic can escalate this risk as personal scorecard as a part of improvements made compliance assessment report based on a
UVTGUUHCEVQTUCFFRTGUUWTGQPƂPCPEGUCPF to the ICAAP document of the Bank and the comprehensive checklist covering a broad
mental health of employees. Managing same was considered as quantitative risk spectrum of the Bank’s litigation and related
conduct risk has gained importance in the assessing parameters to be used in Pillar 2 functionalities which is signed off by every
Bank’s risk management agenda, as the risk assessment. member of the Legal Department. This is
prevailing unpredictable macroeconomic reviewed by the Compliance Division on a
conditions s are expected to persist in the The Legal Department of the Bank carries quarterly basis, strengthening Legal Risk
foreseeable future. out a comprehensive assessment prior to monitoring.
GPVGTKPIKPVQCPCITGGOGPVYKVJCP[TF
Mitigating party service providers. Additionally, the
A clear understanding of the causes of poor
conduct in the past has assisted the Bank in
estimating and preventing a recurrence of LEGAL RISK GOVERNANCE AND FRAMEWORK
the same conduct in the future. Therefore,
VJG$CPMJCUFGƂPGFKVUMG[EQPFWEVTKUM
drivers. Claims arising from / deprived due to defective documentation in contracts
Monitoring Mis – selling / mis – buying
Lines of defence in managing conduct risk:

Legislative
l / regulatory
l d
developments
l resulting
l in claims
l against / d
deprivation off making
k claims
l
> Operational: Day to day monitoring and
reviewing management of information. Di
Dispute M
Management
This line of defence remains with the
respective business unit itself.
Claims arising from / deprived of due to non - contractual rights / obligations risks
> Compliance: Implementing policies
and procedures as prescribed by Constraints faced due to technological advancements
regulator and industry best standards.
The Operational Risk Management
department is under the purview of
RMD, and the Audit and Compliance MODEL RISK
department ensures the management of
the risk control framework and ongoing /QFGNUCTGYKFGN[WUGFVQUWRRQTVFGEKUKQPOCMKPIKPVJGƂPCPEKCNUGEVQTCPFCTGVJGTGHQTG
compliance monitoring. a critical component of a Bank’s risk management. Model risk may arise from losses as a
consequence of decisions that could be primarily based on the output of internal models
> Board: Assessing conduct risks or as a result of the errors in the development, implementation or use/ maintenance of the
through review and analysis of periodic models.
management information.

GOVERNANCE AND RISK
The Bank’s model risk is governed by the Figure 20: Model Risk Governance Structure
Model Risk Management Framework which
provides guidance on the structure of BOARD OF DIRECTORS (BOD) SUPERVISION
models and assumptions used for the Bank’s
DWUKPGUURTQLGEVKQPUƂPCPEKCNCPCN[UKUCPF
risk management capabilities to ensure that BIRMC
VJG[CTGUWHƂEKGPVN[TQDWUVCPFGHHGEVKXG
to support its business strategies, risk > Review of Model Risk Management Framework
assessment and measurement capabilities. and recommendation to the BOD for approval
Model risk can potentially lead to over/
WPFGTGUVKOCVKPIHWVWTGRTQƂVUQTNQUUGU
ERMCPC
as it supports decision making. Therefore,
the Bank conducts regular tests on internal > Supervision of model risk management and model
models and the assumptions used for the design, review lifecycle
models, supporting effective management > Review of Model Risk Management Framework and
to mitigate model risk. Accordingly, the Bank recommendation to BRC for approval
engaged with external risk consultants in
2019 to establish a Model Risk Guideline and
framework governing all material models
used by the Bank and the policy is regularly Model Owners - RMD, RMD Audit
reviewed. Finance, Business groups etc. - Risk Analytics
The governance principles for the Bank’s > Inputs for model design > Model design facilitation > Periodic review
model lifecycles are prescribed below: > Input Data and data quality > Overseeing independent
> Administration model validation
> Compliance with model development
rules and risk estimation methodologies implementation of models > Model inventory
prescribed by Basel principles and management
leading model development practices > Model risk management
across the globe.
> Maintain data for models in line with the Monitoring > Estimation of losses (market, credit
Risk Data Aggregation (and Reporting) QTQRGTCVKQPCNTKUMNQUUGUHQTURGEKƂE
The governance of the Bank’s model
Principles prescribed by the Basel portfolios of the Bank.
management framework is characterized
Committee on Banking Supervision
by cross-departmental involvement in > Bank’s credit risk models, which aim to
VJTQWIJVJG$%$5RTKPEKRNGU
various stages of model development, enable the Bank to predict the Probability
> Develop distinct models across different implementation and review; with the of Defaults (PD), Loss Given Defaults
portfolios of the Bank such as Retail, oversight of the Board of Directors, through (LGD) based on recoveries information,
Corporate, etc... for credit portfolios and the BIRMC. and Exposure at Default (EAD) based
loss data for market risk and operational on customer and macroeconomic
risk. The following areas are managed through
characteristics, facilitate calculation
URGEKƂEOQFGNUKPVJG$CPM
> Models are to be parsimonious, taking of impairment due to Expected
into account the appropriateness of > Gauging the market risk parameters for Credit Loss(es) (ECL) as per the IFRS 9
variables, data length, ease of availability, the Bank, assessment and monitoring stipulations of impairment and provision
with the aim to maximize performance methodology. computation
with resources available. > Statistical methodologies for business or The performance of models against
> Independent validation of models with risk estimations. actual results are reported via dashboards
the aim of ensuring accuracy of models. > Non statistical models (such as Pillar 2 risk and other monthly reporting methods.
assessment models). Further, the Bank also obtains Independent
Maintaining strong governance over validation of data quality and model
development of models and their lifecycle > Models for assessment of obligors or processes to strengthen model risk
is fundamentally important to their facilities, to gauge the creditworthiness management.
effectiveness and risk control. Given below and risks involved with the same.
is the overview of the Model Governance
structure at the Bank.

MANAGING GROUP RISK
1WVQHVJG*0$)TQWRoUHQWTUWDUKFKCTKGUVJTGGCTGGPICIGFKPƂPCPEKCNUGTXKEGU#EWKV[2CTVPGTUKUCLQKPVXGPVWTGRTQXKFKPIKPXGUVOGPV
DCPMKPIUGTXKEGUYJKEJJCUHQWTUWDUKFKCTKGUYJKEJOCMGWRCHWNN[ƃGFIGFYGCNVJOCPCIGOGPVCPFKPXGUVOGPVDCPMKPIENWUVGT*0$
Assurance PLC and HNB Finance PLC are listed on the Colombo Stock Exchange. These two subsidiaries are regulated by the Insurance
Regulatory Commission of Sri Lanka and the Central Bank of Sri Lanka. Activities of Acuity Partners are subject to regulations of the SEC as
market intermediaries. Sithma Development Ltd., the fourth subsidiary is the real estate arm of the HNB Group. The Group structure and the
UKIPKƂECPEGVQVJG)TQWRCTGIKXGPDGNQY
60% 50% 42.16% 100%
HNB Assurance PLC Acuity Partners Ltd. HNB Finance PLC Sithma Development Ltd.
> HNB General Insurance > Acuity Securities Ltd.

Ltd. (100%) (100%)
> Acuity Stockbrokers (Pvt)
Ltd.
(100%)
> Lanka Ventures PLC.
(79.8%)

GOVERNANCE AND RISK
Mitigation & Monitoring

Risk management of the Group companies are overseen by the HNB’s Corporate Management
team and they are on the Boards of Group companies. The risk management divisions of the Group
companies forward Risk Management Review reports including the key risk concerns to the Risk
division and compliance division of HNB. These reports identify the key risks faced by each entity, KEY INITIATIVES IMPLEMENTED IN 2022
measures taken to manage or mitigate the risks and are reviewed by the Risk department of the
Bank and tabled at the BIRMC meeting for further guidance. > Strengthened Credit Policy framework
and Credit Risk Governance framework
Risk aggregating poses some challenges due to the varying operating models of the Group for HNB Finance
companies and the Bank continues to address this to facilitate assessment of the Bank’s material > Strengthened credit risk management
risks as a group. Accordingly, the Bank’s risk management department has developed a Group strategies and monitored effective
TKUMFCUJDQCTFVQOQPKVQTUWDUKFKCT[URGEKƂEƂPCPEKCNCPFPQPƂPCPEKCNTKUMRCTCOGVGTUEQXGTKPI implementation of the same through
EJCPIGUVQ)TQWRUVTWEVWTGIGPGTCNCPFURGEKƂEƂPCPEKCNJKIJNKIJVUQHGCEJUWDUKFKCT[CFJGTGPEG Group Risk Dashboard
VQTGURGEVKXGIQXGTPKPICWVJQTKVKGUEQORNKCPEGDTGCEJGUKHCP[CPFPQPƂPCPEKCNTKUMUHCEGFD[
respective subsidiaries on a quarterly basis.
Effectiveness of the Group risk management is supported by the following:
> #NN)TQWR%QORCPKGUKPFKECVGJGCNVJ[ƂPCPEKCNRQUKVKQPUCVVJGENQUGQHVJG[GCTFGURKVG
an exceptionally challenging year.
> HNB’s capital at risk is limited to the amounts invested in these companies in the form of
equities at the time of companies were incorporated or acquired.
> Key Management Personnel/Director representation on boards of Group Companies
UWRRQTVCNKIPOGPVVQEQTGXCNWGUDWUKPGUUUVTCVGI[CPFCUWHƂEKGPVKPHQTOCVKQPƃQY
Group Co. Board Chairman Board Risk

Representation Committee
Representation
HNB Assurance PLC 3 – 3

Acuity Partners (Pvt) 3 – Represented at
Ltd Acuity Securities Ltd
Only
Sithma Development 3 3 –
Pvt Ltd
HNB Finance PLC 3 3 3
Group companies engaged in Insurance, Finance Business and Investment Banking are
subject to regulatory oversight and have structures in place to facilitate compliance.

HNB ASSURANCE PLC
HNB Assurance PLC (HNBA) and its fully owned subsidiary HNB General Insurance Limited (HNBGI) have well established compliance and risk
management systems in place and comply with the regulations of the Insurance Regulatory Commission of Sri Lanka, the CSE and the SEC.
6JGMG[TKUMKPFKECVQTUQHVJGUGVYQUWDUKFKCTKGUCTGIKXGPDGNQYCPFCUWOOCT[QHVJGKTRGTHQTOCPEGKUIKXGPQPRCIGKPVJKUTGRQTV
CAPITAL ADEQUACY RATIO HNB ASSURANCE PLC HNB GENERAL INSURANC

KEY INITIATIVES IMPLEMENTED IN 2022
HNB Assurance PLC HNB General Insurance > Introduced new KRI’s to risk
National IFS Rating & National IFS Rating & dashboards for key risks indicators.
HNBA HNBGI
National Long Term Rating National Long Term Rating
> Conducted stress testing and
308% 242% A+(lka) A+(lka) scenario analysis based on the current
economic situation.
Outlook: Outlook:
Watch Maintained Watch Maintained > Conducted branch risk assessments
and reports were submitted to Risk
Committee.
Key risk indicators > Conducted work from home and
Cyber Security awareness training for
2022 2021
employees
HNB Assurance PLC > +PETGCUGFGORJCUKUQPVJGGHƂEKGPV
Claims Ratio (without policy maturities) 11% 10% management of reinsurance
arrangements and counter party risks
Expense Ratio 47% 42%
> Conducted BCP test and disaster
Combined Ratio 73% 52%
recovery simulations during the year
Capital Adequacy Ratio 308% 277% and the results were reviewed by the
Board Risk Management Committee.
HNB General Insurance Limited
Claims Ratio 72%
Expense Ratio 38%
Combined Ratio 110% 100%
Capital Adequacy Ratio 242% 258%
6JG*0$#)TQWR4KUMOCPCIGOGPVRQNKE[HTCOGYQTMFGƂPGUVJGTKUMOCPCIGOGPVRQNKEKGU
and processes and provides clear guidance for managing foreseeable risks. The policy
framework is aligned to the HNB policies where relevant to achieve strategic alignment and
minimise potential adverse impacts. HNBA’s Risk Governance structure includes a Board Level
Risk Management Committee and the Board Audit Committee. Risk management activities
carried out by HNBA and HNBGI are conveyed to the BIRMC of HNB PLC on a quarterly
DCUKU6JGEQORNKCPEGTKUMKUOCPCIGFD[VJGUWDOKUUKQPQHEQPƂTOCVKQPQPEQORNKCPEGVQ
VJGEQORNKCPEGFKXKUKQPQH*0$QPCSWCTVGTN[DCUKU6JGHQNNQYKPIQHƂEKCNUQHVJG$CPMCTG
directors of HNBA facilitating alignment of values and culture:
Name Role in HNBA Role at the Bank

Mr. Dilshan P.N. Rodrigo Non-Executive Director COO/Executive Director HNB
Ms. L Chiranthi Cooray Non-Executive Director %JKGH*WOCP4GUQWTEGU1HƂEGT
Mr. Sanjay Wijemanne Non-Executive Director Deputy General Manager -Retail and
SME
Mr. Arjuna Non-Executive Director Deputy General Manager Treasury &
Abeygunasekara Markets

GOVERNANCE AND RISK
HNB FINANCE PLC

*0$(KUCHWNNƃGFIGFƂPCPEGEQORCP[CPFYCUNKUVGFQPVJG%5'KP+VUTKUMRTQƂNGU
CTGUJCRGFD[CNGICE[QHOKETQƂPCPEGYKVJOQTGTGEGPVUWEEGUUHWNRGPGVTCVKQPKPVQVJG5/'
market segment, extending the customer life cycle and broad basing the market segments.
#UCTGIWNCVGFƂPCPEGEQORCP[*0$(JCUCEQORTGJGPUKXG4KUM/CPCIGOGPV(TCOGYQTM
aligned to the Bank’s risk objectives and parameters. The key risk indicators of HNBF are
given below while a summary of its performance is given on page 224.
CAPITAL ADEQUACY RATIO HNB FINANCE PLC
10.7% A(lka)
Outlook: Stable
Key Risk Indicators
2022 2021
Deposit Growth (%) 18.27

Advances Growth (%) 18.38 26.02
2TQƂVCDKNKV[
4U/P (526) 514
Total Assets ( Rs.Mn) 52,961
Shareholder Funds (Rs. Mn) 4,858
CAR (%) Total Capital 10.7 11.78
Impairment Charge (%) 22.95 16.11
Impaired Portfolio (Rs. Mn) 5,632 4,680
NPA Ratio (%) 15.05 14.78
HNBF recorded a loss of Rs. 526 Mn for the year 2022 and NII which recorded an decrease of
+PETGCUGFETGFKVTKUMPGEGUUKVCVGFCPQVJGT[GCTQHJKIJRTQXKUKQPKPIYJKEJFCORGPGF
RTQƂVCDKNKV[+PVGTGUVTCVGECRUQPFGRQUKVUKPVTQFWEGFD[%$5.KPTGOCKPGFKPRNCEG
easing competitive pressures. Liquidity risk remained at comfortable levels due to the strong
domestic franchise of the HNB Group which enabled HNBF to attract deposits and lending
activities were at a low ebb.
The CRO of HNB is the BIRMC Chairman of HNBF, and provides guidance on development
of Risk Management policies, structures, processes and controls using the extensive
experience of the Bank’s risk management function.
Name Role in HNBF Role at the Bank

Mr. D.P.N. Rodrigo Chairman/Non-Executive Director Executive Director/COO
Mr. R.D. Manatunga Non-Executive Director %JKGH4KUM1HƂEGT
Mr. A.G.R. Dissanayake Non-Executive Director %JKGH(KPCPEKCN1HƂEGT

ACUITY PARTNERS (PVT) LTD
The APL Group Risk exposure is monitored and followed by the Groups’ Audit Committees Break-up of Installed power Generation
with oversight by HNB BIRMC. The APL group submits a quarterly report on Risk capacity
management activities to the Board Integrated Risk Management Committee of the Bank.
In addition, HNB conducts a Group Governance follow up meeting on a quarterly basis 6% 2%
with Acuity Group. The Margin Trading Operations of Acuity Partners (Pvt) Ltd and the
8%
stockbroking license of Acuity Stock Brokers is issued by the SEC and they comply with its
requirements while Acuity Securities Ltd., is regulated by CBSL.
/CVGTKCNTKUMUKFGPVKƂGFD[VJG#2.)TQWRCTGOCTMGVTKUMUEQORNKCPEGTKUMKPVGTGUVTCVGTKUM
and liquidity risk. Such risks are assessed and mitigated through laid down procedures based
on regulatory and internal procedures. Additionally, Lanka Ventures is materially impacted by
the Currency devaluation, deteriorating liquidity position of CEB, high interest cost & climate
risks as its portfolio comprises of investments in renewable energy. However, climate risks are
NCTIGN[OKVKICVGFVJTQWIJFKXGTUKƂECVKQPCUVJGRQTVHQNKQEQXGTUUQNCTYKPFCPFJ[FTQRQYGT
generation. 84%
Thermal Wind
Hydro Solar
DEBT: EQUITY RATIO PROFIT AFTER TAX
22% Rs. 812 Mn Funds Under management by Unit trust
Rs.Mn
3,500
3,000
Key Risk Indicators 2,500
2,000
2022 2021 1,500
1,000
ROE 9.83% 10.4%
500
ROI 44% 0
31-12-2021 31-12-2022
APL Group has recorded a commendable performance despite sluggish economic conditions
YKVJVJGDGPEJOCTM#52+FGETGCUKPID[FWTKPI
6JGHQNNQYKPIQHƂEKCNUQHVJG$CPMCTGFKTGEVQTUQH#EWKV[2CTVPGTUHCEKNKVCVKPIQXGTUKIJVCPF
alignment of values and culture.
Name Role in Acuity Partners Role at the Bank

Rajive Dissanayake Director-Acuity Partners(Pvt) Ltd & Member CFO
of Board integrated Audit Committee for
ASB/APL.
Director-Lanka Ventures PLC & LVL Energy
Fund PLC
Damith Pallewatte Director -Acuity Partners (Pvt) Ltd, Director- DGM-Wholesale
Acuity Securities Ltd & member of board Banking
integrated Risk Committee of ASL.
Chairman-Lanka Ventures PLC & Director of
LVL Energy Fund PLC
Sanjay Wijemanne Director -Acuity Partners (Pvt) Ltd & Director- DGM -Retail & SME
Acuity Stockbrokers (Pvt) Ltd banking
Arjuna Abeygunasekara Director-Acuity Securities Ltd & member of DGM-Treasury &
board integrated Audit Committee Markets
Thushari Ranaweera Director-Acuity Stockbrokers (Pvt) Ltd DGM-Legal & Board
Secretary

GOVERNANCE AND RISK
SITHMA DEVELOPMENT (PVT) LTD

5KVJOC&GXGNQRGTUQYPUCPFOCPCIGUVJGNCPFOCTMDWKNFKPIQHVJG$CPMoU*GCF1HƂEGCPF
SITHMA DEVELOPMENT (PVT) LTD
manages the branch premises owned by the Bank. Risks related to Sithma are monitored by
the Bank’s Audit Committee and BIRMC in addition to the Board of the subsidiary and the
Bank in its role as the parent company. A Grade
Typically, the main risks faced by the subsidiary are market risk and compliance risk. However, Smart Building
operational risk factors became the main risk in 2021 and 2022. Additionally, Sithma was
also able to retain their clients despite the steep drop in demand in the commercial real
estate rental market. Sithma was able to handle these measures satisfactorily through regular
communication with key stakeholders and increased investment in personal protective gear
and rigorous reinforcement of agreed upon procedures
The value of its assets and rental revenues are impacted by real estate market movements
which stagnated during the period under review. However, these are expected to remain in
line with 2022 rates due to its prime location and A - grade facility. As the building houses
QXGTRGQRNGEQORNKCPEGYKVJDGUVRTCEVKEGKPJGCNVJCPFUCHGV[UVCPFCTFUKPENWFKPIƂTG
detection and prevention is a key aspect of risk that is monitored continuously.
Value of Properties Rs. ‘000
HNB Towers - No 479, TB Jayah Mawatha, Colombo 10.

Net Book Value 9,169,040
Market Value 18,606,600
SMART Building - No 21, Janadhipathi Mawatha, Colombo 1.
Net Book Value 57,798
Market Value 474,950
Building at Kegalle
Net Book Value 100,297
Market Value 192,578
2022 2021
Rs. ‘000 Rs. ‘000
Revenues from Rental

Rental Income 1,038,661 1,017,160
2TQƂVCDKNKV[
2TQƂV#HVGT6CZ 531,347 464,294
Equity & Debt : Equity Ratio
Equity & Reserves 8,854,587 8,240,760
Liabilities 2,106,864 2,696,122
Total Equity & Liabilities 10,961,451

We’re built to enab
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and
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FINANCIAL
REPORTS
Financial Calendars 228
Responsibility Statement 229
&KTGEVQTUo4GURQPUKDKNKV[HQT(KPCPEKCN4GRQTVKPI 230
&KTGEVQTUo4GURQPUKDKNKV[HQT(KPCPEKCN4GRQTVKPI
+PFGRGPFGPV#WFKVQToU4GRQTV 232
+PFGRGPFGPV#WFKVQToU4GRQTV
(KPCPEKCN*KIJNKIJVU$CPM 237
(KPCPEKCN*KIJNKIJVU$CPM
Income Statement 238
5VCVGOGPVQH2TQƂVQT.QUUCPF
Other Comprehensive Income 239
Statement of Financial Position 240
5VCVGOGPVQH%JCPIGUKP'SWKV[ 242
Statement of Cash Flows 246
Notes to the Financial Statements 248
FINANCIAL REPORTS
FINANCIAL CALENDARS
(+0#0%+#.%#.'0&#4
TF#PPWCN)GPGTCN/GGVKPIJGNFQP 30th March 2022

Rs. 9.00 per share Final Dividend for 2021 paid on 12th April 2022
#WFKVGF(KPCPEKCN5VCVGOGPVUUKIPGFQP 17th February 2023
VJ#PPWCN)GPGTCN/GGVKPIVQDGJGNFQP 30th March 2023
Rs. 5.00 per share Final Dividend for 2022 payable in the form of a scrip dividend* April 2023
Interim Financial Statements published in terms of Rule 8.3 of the
%QNQODQ5VQEM'ZEJCPIGCPFCURGTVJGTGSWKTGOGPVUQHVJG%GPVTCN$CPMQH5TK.CPMC
1st Quarter Interim Results released on 13th May 2022
2nd Quarter Interim Results released on VJ#WIWUV
3rd Quarter Interim Results released on 11th November 2022
FINANCIAL CALENDAR - 2023
VJ#PPWCN)GPGTCN/GGVKPIVQDGJGNFKP March 2024

Final Dividend for 2023 payable in ** April 2024
+PVGTKO(KPCPEKCN5VCVGOGPVURWDNKUJGFKPVGTOUQH4WNGQHVJG%QNQODQ5VQEM'ZEJCPIG
CPFCURGTVJGTGSWKTGOGPVUQHVJG%GPVTCN$CPMQH5TK.CPMC
1st Quarter Interim Results to be released in May 2023
2nd Quarter Interim Results to be released in #WIWUV
3rd Quarter Interim Results to be released in November 2023
5WDLGEVVQEQPƂTOCVKQPD[5JCTGJQNFGTU
5WDLGEVVQEQPƂTOCVKQPD[&KTGEVQTUCPF5JCTGJQNFGTU

CHIEF EXECUTIVE OFFICER’S AND CHIEF FINANCIAL
OFFICER’S RESPONSIBILITY STATEMENT
6JGƂPCPEKCNUVCVGOGPVUQH*CVVQP0CVKQPCN$CPM2.%
VJGp$CPMqCPF audits to provide reasonable assurance that the established policies
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the joint venture as at 31st December 2022 are prepared and presented CTGKPJGTGPVNKOKVCVKQPUVJCVUJQWNFDGTGEQIPKUGFKPYGKIJKPIVJG
KPEQORNKCPEGYKVJVJGTGSWKTGOGPVUQHVJGHQNNQYKPI CUUWTCPEGURTQXKFGFD[CP[U[UVGOQHKPVGTPCNEQPVTQNUCPFCEEQWPVKPI
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5TK.CPMC#EEQWPVKPI5VCPFCTFUKUUWGFD[VJG+PUVKVWVGQH%JCTVGTGF EQPVTQNUQXGTƂPCPEKCNTGRQTVKPIFWTKPIVJG[GCTGPFGFUV&GEGODGT
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FINANCIAL REPORTS
DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTING
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accordance with the provisions of the Companies Act No 7 of 2007 is set
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Financial statements prepared and presented in this report have been VJG&KTGEVQTUJCXGEQPƂTOGFVJCVVJG$CPMDCUGFQPVJGKPHQTOCVKQP
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responsibilities as set out in this statement.
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Shiromi Halloluwa (Ms)

Head of Legal/Board Secretary
%QNQODQ5TK.CPMC
17th February 2023
FINANCIAL REPORTS
INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF HATTON NATIONAL BANK PLC Basis for Opinion

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REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
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statements and the inherent complexity of the KPFKECVQTUJCXGDGGPKFGPVKƂGFD[OCPCIGOGPVCPFCUUGUUGFCUJKIJGTTKUMQTKORCKTGFCPF
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r #UUGUUKPIGZVGTPCNEQNNCVGTCNXCNWGToUETGFGPVKCNUCPFEQORCTKPIGZVGTPCNXCNWCVKQPU
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any impairment indicators were present.
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lifetime allowance is recorded.
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future cash repayments and estimated proceeds CPFUEGPCTKQYGKIJVKPIUVTGPFUKPVJGETGFKVTKUMEQPEGPVTCVKQPQHURGEKƂERQTVHQNKQU
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and Group in respect of the loans. TGCUQPCDNGPGUUQHVJG$CPMCPF)TQWRoUEQPUKFGTCVKQPUQHVJGWPEGTVCKPV[TGNCVKPIVQMG[
economic indicators.
FINANCIAL REPORTS
6JGFKUENQUWTGUTGICTFKPIVJG$CPM)TQWRoU +PCFFKVKQPVQEQPVTQNUVGUVKPIQWTRTQEGFWTGUKPENWFGF
CRRNKECVKQPQH5.(45CTGMG[VQGZRNCKPKPIVJG
r 9QTMKPIYKVJQWT(KPCPEKCN4KUM/CPCIGOGPV
(4/URGEKCNKUVKP
MG[LWFIGOGPVUCPFOCVGTKCNKPRWVUVQVJG5.(45
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HCEVQTUWUGFVQTGNGXCPVRWDNKEN[CXCKNCDNGOCETQGEQPQOKEKPHQTOCVKQPVQKFGPVKH[
contradictory indicators
Q 'XCNWCVKPICPFEJCNNGPIKPIVJGMG[CUUWORVKQPUKPVJGEQORQPGPVUQHVJG$CPMoU
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D[VJGRTGXCKNKPIGEQPQOKEEQPFKVKQPU
r #UUGUUKPIVJGQPIQKPIGHHGEVKXGPGUUQHVJG5+%4ETKVGTKCCPFKPFGRGPFGPVN[ECNEWNCVKPI
VJGNQCPUoUVCIGVQFGVGTOKPGYJGVJGTC5+%4GXGPVJCFQEEWTTGF
r #UUGUUKPIVJGEQORNGVGPGUUQHCFFKVKQPCNCNNQYCPEGQXGTNC[UD[EJGEMKPIVJGEQPUKUVGPE[
QHTKUMUYGKFGPVKƂGFKPVJGNQCPRQTVHQNKQUCICKPUVVJG$CPM)TQWRoUCUUGUUOGPV
r 'XCNWCVKPIVJGCRRTQCEJVCMGPD[VJGOCPCIGOGPVKPKFGPVKH[KPIVJGTKUMGNGXCVGF
UGEVQTUCPFCUUGUUKPIVJGEWTTGPVOCTMGVEQPFKVKQPUCPFURGEKƂETKUMUKPVJG$CPMCPF
)TQWRoUNQCPRQTVHQNKQUFWGVQGZRQUWTGVQTKUMGNGXCVGFUGEVQTU
r 4GXKGYKPIVJGFGNKXGTCDNGUUWDOKVVGFD[VJGEQORQPGPVCWFKVQTU
QVJGT-2/)CWFKV
VGCOUCURGTVJG)TQWR#WFKV+PUVTWEVKQPUVQCUUGUUCP[KORNKECVKQPUVJCVEQWNFCTKUG
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Assessing the adequacy of post model adjustments
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r #UUGUUKPIRQUVOQFGNCFLWUVOGPVUCICKPUVVJG$CPMCPF)TQWRoU'%.OQFGNCPF
FCVCFGƂEKGPEKGUKFGPVKƂGFD[VJG$CPMCPF)TQWRoU'%.OQFGNXCNKFCVKQPRTQEGUUGU
RCTVKEWNCTN[KPNKIJVQHVJGUKIPKƂECPVXQNCVKNKV[KPGEQPQOKEUEGPCTKQU
r %QORCTKPIWPFGTN[KPIFCVCWUGFKPEQPEGPVTCVKQPTKUMCPFGEQPQOKEE[ENGCNNQYCPEGU
VQWPFGTN[KPINQCPRQTVHQNKQEJCTCEVGTKUVKEUQHTGEGPVNQUUGZRGTKGPEGEWTTGPVOCTMGV
EQPFKVKQPUCPFGZRQUWTGVQTKUMGNGXCVGFUGEVQTUKPVJG$CPMCPF)TQWRoUNQCPRQTVHQNKQU
r #UUGUUKPIEGTVCKPRQUVOQFGNCFLWUVOGPVUKFGPVKƂGFD[VJG$CPMCPF)TQWRCICKPUV
KPVGTPCNCPFGZVGTPCNKPHQTOCVKQP
r #UUGUUKPIVJGEQORNGVGPGUUQHRQUVOQFGNCFLWUVOGPVUD[EJGEMKPIVJGEQPUKUVGPE[QH
TKUMUYGKFGPVKƂGFKPVJGNQCPRQTVHQNKQUCICKPUVVJG$CPMCPF)TQWRoUCUUGUUOGPV
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#EEQWPVKPI5VCPFCTFU

+6U[UVGOUCPFEQPVTQNUQXGTƂPCPEKCNTGRQTVKPI
4KUM&GUETKRVKQP Our Responses
6JG$CPMCPF)TQWRoUDWUKPGUUGUWVKNK\GOCP[ 9GYQTMGFYKVJQWTKPVGTPCN+6URGEKCNKUVUVQRGTHQTOCWFKVRTQEGFWTGUVQVGUVVJGVGEJPQNQI[
EQORNGZKPVGTFGRGPFGPV+PHQTOCVKQP6GEJPQNQI[ EQPVTQNGPXKTQPOGPVHQTMG[+6CRRNKECVKQPU
U[UVGOUWUGFKPRTQEGUUKPIUKIPKƂECPV

+6U[UVGOUVQRTQEGUUCPFTGEQTFCJKIJXQNWOG VTCPUCEVKQPUCPFTGEQTFKPIDCNCPEGUKPVJGIGPGTCNNGFIGT9GCNUQVGUVGFCWVQOCVGF
QHVTCPUCEVKQPU6JGEQPVTQNUQXGTCEEGUU EQPVTQNUGODGFFGFYKVJKPVJGUGU[UVGOUYJKEJNKPMVJGVGEJPQNQI[GPCDNGFDWUKPGUU
EJCPIGUVQCPFQRGTCVKQPQH+6U[UVGOUCTGMG[ processes.
VQVJGTGEQTFKPIQHƂPCPEKCNKPHQTOCVKQPCPFVJG
RTGRCTCVKQPQHƂPCPEKCNUVCVGOGPVUYJKEJRTQXKFG 1WTHWTVJGTCWFKVRTQEGFWTGUKPENWFGF
CVTWGCPFHCKTXKGYQHVJG$CPMCPF)TQWRoU
General IT controls design, observation and operation
ƂPCPEKCNRQUKVKQPCPFRGTHQTOCPEG
r #UUGUUKPIVJGIQXGTPCPEGCPFJKIJGTNGXGNEQPVTQNUKPRNCEGCETQUUVJG+6'PXKTQPOGPV
6JG+6U[UVGOUCPFEQPVTQNUCUVJG[KORCEVVJG
KPENWFKPIVJQUGTGICTFKPIRQNKE[FGUKIPTGXKGYCPFCYCTGPGUUCPF+64KUM/CPCIGOGPV
TGEQTFKPICPFTGRQTVKPIQHƂPCPEKCNVTCPUCEVKQPU
RTCEVKEGU
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QRGTCVKQPQHVJG$CPMCPF)TQWRoU+6EQPVTQNU EQPVTQNUQRGTCVKPIQXGTVJGKPHQTOCVKQPVGEJPQNQI[KPTGNCVKQPVQƂPCPEKCNCEEQWPVKPI
CPFTGRQTVKPIU[UVGOUKPENWFKPIU[UVGOCEEGUUCPFU[UVGOEJCPIGOCPCIGOGPV
OQPKVQTU[UVGOKPVGITKV[RTQITCOFGXGNQROGPVCPFEQORWVGTQRGTCVKQPU
r &CVCKPVGITKV[QHETKVKECNU[UVGOTGRQTVKPIWUGFD[WUKPQWTCWFKVVQUGNGEVUCORNGUCPF
CPCN[\GFCVCWUGFD[OCPCIGOGPVVQIGPGTCVG(KPCPEKCNUVCVGOGPVU
Application controls
r 1PUCORNGDCUKUTGRGTHQTOGFUGNGEVGFCWVQOCVGFEQORWVCVKQPUCPFEQORCTGFQWT
TGUWNVUYKVJVJQUGHTQOVJGU[UVGOCPFVJGIGPGTCN.GFIGT
User access controls operation
r #UUGUUKPIVJGOCPCIGOGPVoUGXCNWCVKQPQHCEEGUUTKIJVUITCPVGFVQCRRNKECVKQPUTGNGXCPV
VQƂPCPEKCNCEEQWPVKPICPFTGRQTVKPIU[UVGOUCPF
r 'XCNWCVGVJGFGUKIPCPFQRGTCVKPIGHHGEVKXGPGUUQH+6EQPVTQNUKPENWFKPIVJQUGTGNCVGFVQ
WUGTCEEGUUCPFEJCPIGOCPCIGOGPV
r #UUGUUKPIVJGQRGTCVKPIGHHGEVKXGPGUUQHEQPVTQNUQXGTITCPVKPITGOQXCNCPF
CRRTQRTKCVGPGUUQHCEEGUUTKIJVU
Other Information Responsibilities of Management and Those Charged with

/CPCIGOGPVKUTGURQPUKDNGHQTVJGQVJGTKPHQTOCVKQP6JGQVJGT Governance for the Financial Statements
information comprises the information included in the annual report /CPCIGOGPVKUTGURQPUKDNGHQTVJGRTGRCTCVKQPQHƂPCPEKCNUVCVGOGPVU
DWVFQGUPQVKPENWFGVJGƂPCPEKCNUVCVGOGPVUCPFQWTCWFKVQToUTGRQTV VJCVIKXGCVTWGCPFHCKTXKGYKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI
thereon. 5VCPFCTFUCPFHQTUWEJKPVGTPCNEQPVTQNCUOCPCIGOGPVFGVGTOKPGUKU
PGEGUUCT[VQGPCDNGVJGRTGRCTCVKQPQHƂPCPEKCNUVCVGOGPVUVJCVCTGHTGG
1WTQRKPKQPQPVJGƂPCPEKCNUVCVGOGPVUFQGUPQVEQXGTVJGQVJGT HTQOOCVGTKCNOKUUVCVGOGPVYJGVJGTFWGVQHTCWFQTGTTQT
information and we will not express any form of assurance conclusion
thereon. +PRTGRCTKPIVJGƂPCPEKCNUVCVGOGPVUOCPCIGOGPVKUTGURQPUKDNGHQT
CUUGUUKPIVJG)TQWRoUCDKNKV[VQEQPVKPWGCUCIQKPIEQPEGTPFKUENQUKPI
+PEQPPGEVKQPYKVJQWTCWFKVQHVJGƂPCPEKCNUVCVGOGPVUQWT CUCRRNKECDNGOCVVGTUTGNCVGFVQIQKPIEQPEGTPCPFWUKPIVJGIQKPI
TGURQPUKDKNKV[KUVQTGCFVJGQVJGTKPHQTOCVKQPKFGPVKƂGFCDQXGYJGP EQPEGTPDCUKUQHCEEQWPVKPIWPNGUUOCPCIGOGPVGKVJGTKPVGPFUVQ
KVDGEQOGUCXCKNCDNGCPFKPFQKPIUQEQPUKFGTYJGVJGTVJGQVJGT NKSWKFCVGVJG)TQWRQTVQEGCUGQRGTCVKQPUQTJCUPQTGCNKUVKECNVGTPCVKXG
KPHQTOCVKQPKUOCVGTKCNN[KPEQPUKUVGPVYKVJVJGƂPCPEKCNUVCVGOGPVUQTQWT but to do so.
MPQYNGFIGQDVCKPGFKPVJGCWFKVQTQVJGTYKUGCRRGCTUVQDGOCVGTKCNN[
misstated. 6JQUGEJCTIGFYKVJIQXGTPCPEGCTGTGURQPUKDNGHQTQXGTUGGKPIVJG
$CPMoUCPFVJG)TQWRoUƂPCPEKCNTGRQTVKPIRTQEGUU
+HDCUGFQPVJGYQTMYGJCXGRGTHQTOGFYGEQPENWFGVJCVVJGTGKU
COCVGTKCNOKUUVCVGOGPVQHVJKUQVJGTKPHQTOCVKQPYGCTGTGSWKTGFVQ
TGRQTVVJCVHCEV9GJCXGPQVJKPIVQTGRQTVKPVJKUTGICTF
.
FINANCIAL REPORTS
Auditors’ Responsibilities for the Audit of the Financial Statements 9GEQOOWPKECVGYKVJVJQUGEJCTIGFYKVJIQXGTPCPEGTGICTFKPICOQPI

Our objectives are to obtain reasonable assurance about whether the QVJGTOCVVGTUVJGRNCPPGFUEQRGCPFVKOKPIQHVJGCWFKVCPFUKIPKƂECPV
ƂPCPEKCNUVCVGOGPVUCUCYJQNGCTGHTGGHTQOOCVGTKCNOKUUVCVGOGPV CWFKVƂPFKPIUKPENWFKPICP[UKIPKƂECPVFGƂEKGPEKGUKPKPVGTPCNEQPVTQNVJCV
YJGVJGTFWGVQHTCWFQTGTTQTCPFVQKUUWGCPCWFKVQTUoTGRQTVVJCV YGKFGPVKH[FWTKPIQWTCWFKV
KPENWFGUQWTQRKPKQP4GCUQPCDNGCUUWTCPEGKUCJKIJNGXGNQHCUUWTCPEG
9GCNUQRTQXKFGVJQUGEJCTIGFYKVJIQXGTPCPEGYKVJCUVCVGOGPVVJCV
DWVKUPQVCIWCTCPVGGVJCVCPCWFKVEQPFWEVGFKPCEEQTFCPEGYKVJ
YGJCXGEQORNKGFYKVJGVJKECNTGSWKTGOGPVUKPCEEQTFCPEGYKVJVJG%QFG
5.#W5UYKNNCNYC[UFGVGEVCOCVGTKCNOKUUVCVGOGPVYJGPKVGZKUVU
QH'VJKEUTGICTFKPIKPFGRGPFGPEGCPFVQEQOOWPKECVGYKVJVJGOCNN
Misstatements can arise from fraud or error and are considered material
TGNCVKQPUJKRUCPFQVJGTOCVVGTUVJCVOC[TGCUQPCDN[DGVJQWIJVVQDGCT
KHKPFKXKFWCNN[QTKPVJGCIITGICVGVJG[EQWNFTGCUQPCDN[DGGZRGEVGF
QPQWTKPFGRGPFGPEGCPFYJGTGCRRNKECDNGTGNCVGFUCHGIWCTFU
VQKPƃWGPEGVJGGEQPQOKEFGEKUKQPUQHWUGTUVCMGPQPVJGDCUKUQHVJGUG
ƂPCPEKCNUVCVGOGPVU (TQOVJGOCVVGTUEQOOWPKECVGFYKVJVJQUGEJCTIGFYKVJIQXGTPCPEG
YGFGVGTOKPGVJQUGOCVVGTUVJCVYGTGQHOQUVUKIPKƂECPEGKPVJGCWFKVQH
#URCTVQHCPCWFKVKPCEEQTFCPEGYKVJ5.#W5UYGGZGTEKUGRTQHGUUKQPCN
VJGƂPCPEKCNUVCVGOGPVUQHVJGEWTTGPVRGTKQFCPFCTGVJGTGHQTGVJGMG[
LWFIOGPVCPFOCKPVCKPRTQHGUUKQPCNUMGRVKEKUOVJTQWIJQWVVJGCWFKV
CWFKVOCVVGTU9GFGUETKDGVJGUGOCVVGTUKPQWTCWFKVQTUoTGRQTVWPNGUU
9GCNUQ
NCYQTTGIWNCVKQPRTGENWFGURWDNKEFKUENQUWTGCDQWVVJGOCVVGTQTYJGPKP
r +FGPVKH[CPFCUUGUUVJGTKUMUQHOCVGTKCNOKUUVCVGOGPVQHVJGƂPCPEKCN GZVTGOGN[TCTGEKTEWOUVCPEGUYGFGVGTOKPGVJCVCOCVVGTUJQWNFPQVDG
UVCVGOGPVUYJGVJGTFWGVQHTCWFQTGTTQTFGUKIPCPFRGTHQTOCWFKV EQOOWPKECVGFKPQWTTGRQTVDGECWUGVJGCFXGTUGEQPUGSWGPEGUQHFQKPI
RTQEGFWTGUTGURQPUKXGVQVJQUGTKUMUCPFQDVCKPCWFKVGXKFGPEG UQYQWNFTGCUQPCDN[DGGZRGEVGFVQQWVYGKIJVJGRWDNKEKPVGTGUVDGPGƂVU
VJCVKUUWHƂEKGPVCPFCRRTQRTKCVGVQRTQXKFGCDCUKUHQTQWTQRKPKQP of such communication.
6JGTKUMQHPQVFGVGEVKPICOCVGTKCNOKUUVCVGOGPVTGUWNVKPIHTQO
Report on Other Legal and Regulatory Requirements
HTCWFKUJKIJGTVJCPHQTQPGTGUWNVKPIHTQOGTTQTCUHTCWFOC[KPXQNXG
EQNNWUKQPHQTIGT[KPVGPVKQPCNQOKUUKQPUOKUTGRTGUGPVCVKQPUQTVJG #UTGSWKTGFD[UGEVKQP
QHVJG%QORCPKGU#EV0QQHYG
override of internal control. JCXGQDVCKPGFCNNVJGKPHQTOCVKQPCPFGZRNCPCVKQPUVJCVYGTGTGSWKTGFHQT
VJGCWFKVCPFCUHCTCUCRRGCTUHTQOQWTGZCOKPCVKQPRTQRGTCEEQWPVKPI
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VQEQPVKPWGCUCIQKPIEQPEGTP+HYGEQPENWFGVJCVCOCVGTKCN 17th February 2023
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are based on the audit evidence obtained up to the date of our
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ITQWRCWFKV9GTGOCKPUQNGN[TGURQPUKDNGHQTQWTCWFKVQRKPKQP

FINANCIAL HIGHLIGHTS - BANK
Net Interest Income Net Fee and Commission Income Total Operating Income
Rs. Bn Rs. Bn Rs. Bn
120 16 160
100 14 140
108% 58% 110%

12 120
80
10 100
60 8 80
INCOME STATEMENT
40 6 60
4 40
20
2 20
0 0 0
2022 2021 2022 2021 2022 2021
Profit after Tax Earnings per Share - Basic Dividend per Share
Rs. Bn Rs. Rs.
20 35 10
30
8
-19% -19% -13%
15 25
20 6
10
15 4
5 10
5 2
0 0 0
2022 2021 2021 2020 2021 2020
Financial Assets measured at Amortised Cost Financial Liabilities measured at Amortised Cost
ASSETS AND LIABILITIES
- Loans and Advances to Customers - Due to Depositors

Rs.Bn Rs.Bn
1,200 1,600
800 11% 1,200

31%
800
400
400
0 0
2022 2021 2022 2021
Capital Adequacy Ratio Net Stage 3 ratio

% %
16 4
14
12 3
33%
RATIOS
10
8 2
6
4 1
2
0 0
Tier 1 Ratio Total Ratio 2022 2021
Bank Statutory minimum
FINANCIAL REPORTS
INCOME STATEMENT
Bank Group
For the year ended 31st December 2022 2021 2022 2021
Note Rs 000 Rs 000 Rs 000 Rs 000
Gross income 7 242,412,491 270,509,409

Interest income 207,019,354 220,581,307
.GUU+PVGTGUVGZRGPUGU 104,142,478 109,014,763
Net interest income 8 102,876,876 111,566,544
Fee and commission income 15,520,113 16,521,300
.GUU(GGCPFEQOOKUUKQPGZRGPUGU 345,863 619,555
Net fee and commission income 9 15,174,250 15,901,745
Net interest, fee and commission income 118,051,126 127,468,289
0GVICKPU
NQUUGUHTQOVTCFKPI 10 4,898,719
4,825,568

0GVICKPHTQOƂPCPEKCNKPXGUVOGPVUCVHCKTXCNWGVJTQWIJQVJGT
comprehensive income 11 22,619 23,099
Net insurance premium income 12 - 12,750,482
0GVICKPUCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVU 13 - -
0GVQVJGTQRGTCVKPIKPEQOG 14 14,951,686 15,807,653
Total operating income 137,924,150 160,875,091
.GUU+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 15 90,461,305 91,735,672
Net operating income 47,462,845 69,139,419
Less : Operating expenses
Personnel expenses 15,025,888 18,490,530
$GPGƂVUENCKOUCPFWPFGTYTKVKPIGZRGPFKVWTG 17 - 11,715,338
Other expenses 18 15,361,679 19,597,651
Total operating expenses 30,387,567 49,803,519
2SHUDWLQJSUR̍WEHIRUHWD[HVRQ̍QDQFLDOVHUYLFHV 17,075,278 19,335,900
.GUU6CZGUQPƂPCPEKCNUGTXKEGU 19 5,101,372 5,247,616
2SHUDWLQJSUR̍WDIWHUWD[HVRQ̍QDQFLDOVHUYLFHV 11,973,906 14,088,284
5JCTGQHRTQƂVQHLQKPVXGPVWTG
PGVQHKPEQOGVCZ 20 - 331,973
PROFIT BEFORE INCOME TAX 11,973,906 14,420,257
.GUU+PEQOGVCZGZRGPUG 21 (2,059,587) (1,327,978)
PROFIT FOR THE YEAR 14,033,493 15,748,235
2TQƂVCVVTKDWVCDNGVQ
'SWKV[JQNFGTUQHVJG$CPM 14,033,493 15,328,572
0QPEQPVTQNNKPIKPVGTGUVU - 419,663
Earnings per share

$CUKEGCTPKPIURGTQTFKPCT[UJCTG
4U 22 26.20 32.30 28.62 35.52
&KNWVGFGCTPKPIURGTQTFKPCT[UJCTG
4U 26.20 32.30 28.62 35.52
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(KPCNFKXKFGPFRTQRQUGFYJKEJKUVQDGCRRTQXGFCVVJG#PPWCN)GPGTCN/GGVKPI

STATEMENT OF PROFIT OR LOSS AND
48-*7(4257*-*3.:*.3(42*c
Bank Group
Note Rs 000 Rs 000 Rs 000 Rs 000

2WKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOQRWEHUHFODVVL̍HGWRSUR̍WRU
loss in subsequent periods
%JCPIGKPHCKTXCNWGQHKPXGUVOGPVUKPGSWKV[KPUVTWOGPVUFGUKIPCVGFCV
HCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG (1,618,910)
(1,618,910)

4GOGCUWTGOGPVQHRQUVGORNQ[OGPVDGPGƂVQDNKICVKQPU
EXK 1,857,052 1,911,065
4GXCNWCVKQPICKPQPHTGGJQNFNCPFCPFDWKNFKPIU - 200,071
Share of other comprehensive income of joint venture that will not be
TGENCUUKƂGFVQRTQƂVQTNQUU - 448,051
.GUU6CZGZRGPUGTGNCVKPIVQKVGOUVJCVYKNNPQVDGTGENCUUKƂGFVQRTQƂV
QTNQUUKPENWFKPIVJGGHHGEVQHTCVGEJCPIG
D (1,157,240)
(2,442,419)

7RWDORWKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOQRWEH
UHFODVVL̍HGWRSUR̍WRUORVV (919,098) (1,502,142)
2WKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOEHUHFODVVL̍HGWR
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'HEWLQVWUXPHQWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH
0GVICKPU
NQUUGUQPKPXGUVOGPVUKPFGDVKPUVTWOGPVUOGCUWTGFCVHCKT
XCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG (3,634,091)
(5,287,257)

%WOWNCVKXGPGVICKPU
NQUUGUQPFGDVKPUVTWOGPVUOGCUWTGF
CVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
VJCVCTGTGENCUUKƂGFVQCOQTVKUGFEQUV 5,577,587 6,281,572
4GENCUUKƂECVKQPQHPGVICKPUQPFGTGEQIPKVKQPQHFGDVKPUVTWOGPVUCVHCKT
XCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGVQKPEQOGUVCVGOGPV - -

0GVEJCPIGKPGZRGEVGFETGFKVNQUUGUQHFGDVUGEWTKVKGUOGCUWTGFCVHCKT
XCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 15 (295,445) (295,445)
Transfer to life policy holder reserve fund
G - 1,244,429
Share of other comprehensive income of joint venture that will be
TGENCUUKƂGFVQRTQƂVQTNQUU - (7,090)
.GUU6CZGZRGPUGTGNCVKPIVQKVGOUVJCVYKNNDGTGENCUUKƂGFVQRTQƂVQT
NQUUKPENWFKPIVJGGHHGEVQHTCVGEJCPIG
D (466,439) (387,768)
7RWDORWKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOEH
UHFODVVL̍HGWRSUR̍WRUORVV 1,181,612
1,548,441

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 262,514 46,299
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 14,296,007 15,794,534
6QVCNEQORTGJGPUKXGKPEQOGCVVTKDWVCDNGVQ
'SWKV[JQNFGTUQHVJG$CPM 14,296,007 15,119,144
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 14,296,007 15,794,534
FINANCIAL REPORTS
STATEMENT OF FINANCIAL POSITION
Bank Group
As at 31st December 2022 2021 2022 2021
Note Rs 000 Rs 000 Rs 000 Rs 000
ASSETS
%CUJCPFECUJGSWKXCNGPVU 25 80,238,881 80,629,698
2NCEGOGPVUYKVJDCPMU 54,371,028 58,172,046
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC 27 32,344,341 32,344,341
4GXGTUGTGRWTEJCUGCITGGOGPVU 28 - 1,380,579
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 29 5,370,501 5,370,501
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 30 111,617 236,178
Financial assets measured at amortised cost
NQCPUCPFCFXCPEGUVQEWUVQOGTU 31 974,131,252 1,014,518,939
FGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 32 448,791,874 479,787,015
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXG
income 33 2,706,660 6,062,195
Investment in joint venture 34 755,000 3,650,354
Investment in subsidiaries 35 3,017,285 -
Investment properties 464,439 935,549
2TQRGTV[RNCPVCPFGSWKROGPV 37 24,835,729 49,616,338
4KIJVQHWUGCUUGVU 38 5,397,734 2,463,788
+PVCPIKDNGCUUGVUCPFIQQFYKNN 39 1,250,154 1,771,092
Deferred tax assets 40 30,471,351 30,763,166
Other assets 41 26,281,118 30,573,372
Total assets 1,690,538,964 1,798,275,151
LIABILITIES
&WGVQDCPMU 42 6,104,578 6,104,578
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 29 25,632 25,632
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 43 6,540,014 6,540,014
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 44 1,407,800,492 1,443,179,121
Dividends payable 45 1,008,325 1,038,542
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU 32,350,594 33,385,598
Debt securities issued 47 2,062,950 2,555,109
Current tax liabilities 48 30,025,919 30,460,242
Deferred tax liabilities 40 - 6,465,029
+PUWTCPEGRTQXKUKQPNKHG 49 - 24,592,403
+PUWTCPEGRTQXKUKQPPQPNKHG 50 - 4,181,588
Other provisions 5,000,513 5,467,274
Other liabilities 51 17,378,270 18,041,795
Subordinated term debts 52 22,914,299 26,151,300
Total liabilities 1,531,211,586 1,608,188,225

Bank Group
As at 31st December 2022 2021 2022 2021
Note Rs 000 Rs 000 Rs 000 Rs 000
EQUITY
Stated capital 54 38,679,005 38,679,005
Statutory reserve fund 55 9,310,000 9,310,000
4GVCKPGFGCTPKPIU 40,706,963 50,247,360
Other reserves 57 70,631,410 85,055,465
Total shareholders’ equity 159,327,378 183,291,830
0QPEQPVTQNNKPIKPVGTGUVU 58 - 6,795,096
Total equity 159,327,378 190,086,926
7RWDOHTXLW\DQGOLDELOLWLHVb 1,690,538,964 1,798,275,151
%QPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU 59 809,328,957 809,328,957
0GVCUUGVUXCNWGRGTQTFKPCT[UJCTG
4U 297.50 283.89 342.25 329.88
+EGTVKH[VJCVVJGUGƂPCPEKCNUVCVGOGPVUCTGKPEQORNKCPEGYKVJVJGTGSWKTGOGPVUQH%QORCPKGU#EV0QQH
Rajive Dissanayake
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17th February 2023

Colombo
Bank ||5VCVGF%CRKVCN 1VJGT4GUGTXGU|
bb9RWLQJbbbbbb1RQ9RWLQJ bb6WDWXWRU\b bb&DSLWDObbb bb)DLU9DOXHb bbb*HQHUDObbb bb5HWDLQHGbb bb7RWDOb
bbb6KDUHVbb b6KDUHVbb bb5HVHUYH bb5HVHUYHbb b5HVHUYHbb bbb5HVHUYHbbb bb(DUQLQJVbb
Fund
Note Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
FINANCIAL REPORTS
Balance as at 1st January 2021 29,244,472 6,327,857 7,660,000 10,782,706 1,221,363 56,100,000 22,665,227 134,001,625

7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU
0GVRTQƂVHQTVJG[GCT - - - - - - 17,299,767 17,299,767
1VJGTEQORTGJGPUKXGKPEQOGPGVQHVCZ - - - 4,301,850 (2,475,416) - 1,217,686 3,044,120
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU - - - 4,301,850 (2,475,416) - 18,517,453 20,343,887
7UDQVDFWLRQVZLWKHTXLW\KROGHUVb
recognised directly in equity
Contributions by and distributions to equity
holders
'LYLGHQGVWRHTXLW\KROGHUV
(KPCNFKXKFGPF%CUJ 23 - - - - - - (2,303,891) (2,303,891)
(KPCNFKXKFGPF5ETKR 23 1,436,119 355,796 - - - - (1,791,915) -
6QVCNEQPVTKDWVKQPUD[CPFFKUVTKDWVKQPUVQGSWKV[
holders 1,436,119 355,796 - - - - (4,095,806) (2,303,891)
6TCPUHGTQH
UWDUGSWGPVUGVVNGOGPVQH
unclaimed dividends - - - - - - (267) (267)
6TCPUHGTUFWTKPIVJG[GCT - - 900,000 - - 1,000,000 (1,900,000) -
STATEMENT OF CHANGES IN EQUITY
Balance as at 31st December 2021 30,680,591 6,683,653 8,560,000 15,084,556 (1,254,053) 57,100,000 35,186,607 152,041,354
Bank ||5VCVGF%CRKVCN 1VJGT4GUGTXGU|
bb9RWLQJbbbbbb1RQ9RWLQJ bb6WDWXWRU\b bb&DSLWDObbb bb)DLU9DOXHb bbb*HQHUDObbb bb5HWDLQHGbb bb7RWDOb
bbb6KDUHVbb b6KDUHVbb bb5HVHUYH bb5HVHUYHbb b5HVHUYHbb bbb5HVHUYHbbb bb(DUQLQJVbb
Fund
Note Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 2022 30,680,591 6,683,653 8,560,000 15,084,556 (1,254,053) 57,100,000 35,186,607 152,041,354
#FLWUVOGPVHQTUWTEJCTIGVCZNGXKGFWPFGTVJG
UWTEJCTIGVCZ#EV0QQH
C - - - - - - (3,611,625) (3,611,625)
Adjusted balance as at 1st January 2022 30,680,591 6,683,653 8,560,000 15,084,556 (1,254,053) 57,100,000 31,574,982 148,429,729
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU
0GVRTQƂVHQTVJG[GCT - - - - - - 14,033,493 14,033,493
Transfer of fair value losses on debt instruments
OGCUWTGFCV(81%+WRQPTGENCUUKƂECVKQPVQ
COQTVKUGFEQUVOGCUWTGOGPVECVGIQT[
PGV
QHVCZ
F - - - - 1,477,057 - - 1,477,057
1VJGTEQORTGJGPUKXGKPEQOGPGVQHVCZ (1,157,240) (1,618,910) 1,561,607 (1,214,543)
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU - - - (1,157,240) (141,853) - 15,595,100 14,296,007
7UDQVDFWLRQVZLWKHTXLW\KROGHUVb
Contributions by and distributions to equity
holders
(KPCNFKXKFGPF%CUJ 23 - - - - - - (3,418,380) (3,418,380)
(KPCNFKXKFGPF5ETKR 23 1,052,150 262,611 - - - - (1,314,761) -
Total contributions by and distributions
to equity holders 1,052,150 262,611 - - - - (4,733,141) (3,418,380)
6TCPUHGTQH
unclaimed dividends - - - - - - 20,022 20,022
6TCPUHGTUFWTKPIVJG[GCT - - 750,000 - - 1,000,000 (1,750,000) -
Balance as at 31st December 2022 31,732,741 6,946,264 9,310,000 13,927,316 (1,395,906) 58,100,000 40,706,963 159,327,378
Group |#VVTKDWVCDNGVQ'SWKV[*QNFGTUQHVJG$CPM|
b6WDWHG&DSLWDO b2WKHU5HVHUYHV
b9RWLQJbb b1RQ9RWLQJb b6WDWXWRU\b b&DSLWDObb b*HQHUDObb b)DLU9DOXHbb b/LIH3ROLF\b b5HVWULFWHGb b([FKDQJHbb b5HWDLQHGb b6KDUHKROGHUV
b b1RQb b7RWDOb
bb6KDUHVbb bb6KDUHVb b5HVHUYH b5HVHUYHbb bb5HVHUYHbb b5HVHUYHb b+ROGHUb b5HJXODWRU\b b(TXDOL]DWLRQb b(DUQLQJVb b)XQGVb b&RQWUROOLQJb
Fund b5HVHUYH)XQGb b5HVHUYHb b5HVHUYHb Interests
Note b5Vbb bb5Vb b5Vb bb5Vbb b5Vb bb5Vbb b5Vb bb5Vbb bb5Vbb bb5Vbb bb5Vbb bb5Vbb
FINANCIAL REPORTS
Balance as at 1st January 2021 29,244,472 6,327,857 7,660,000 23,054,710 56,100,000 1,270,055 748,391 381,156 101,634 29,361,200 154,249,475 5,409,964 159,659,439

#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ
*0$(KPCPEG2.% - - - - - - - - - - - 301,135 301,135
Adjusted balance as at 1st January 2022 29,244,472 6,327,857 7,660,000 23,054,710 56,100,000 1,270,055 748,391 381,156 101,634 29,361,200 154,249,475 5,711,099 159,960,574
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDUb
0GVRTQƂVHQTVJG[GCT - - - - - - - - - 19,024,882 19,024,882 1,059,480 20,084,362
1VJGTEQORTGJGPUKXGKPEQOG
net of tax - - - 7,762,270 - (2,528,094) - - 61,568 1,253,791 6,549,535 (3,357) 6,546,178
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDUb - - - 7,762,270 - (2,528,094) - - 61,568 20,278,673 25,574,417 1,056,123 26,630,540
7UDQVDFWLRQVZLWKHTXLW\KROGHUV
Contributions by and distributions
to equity holders
(KPCNFKXKFGPF5ETKR 1,436,119 355,796 - - - - - - - (1,791,915) - - -
(KPCNFKXKFGPF%CUJ - - - - - - - - - (2,303,891) (2,303,891) (168,000) (2,471,891)
Total contributions by and distributions to
HTXLW\KROGHUVb 1,436,119 355,796 - - - - - - - (4,095,806) (2,303,891) (168,000) (2,471,891)
STATEMENT OF CHANGES IN EQUITY
Transfer from life policy holder reserve fund 57 (e) - - - - - - (851,693) - - - (851,693) - (851,693)
6TCPUHGTQH
unclaimed dividends 56 - - - - - - - - - (267) (267) - (267)
6TCPUHGTUFWTKPIVJG[GCT - - 900,000 - 1,000,000 - - - - (1,900,000) - - -
Balance as at 31st December 2021 30,680,591 6,683,653 8,560,000 30,816,980 57,100,000 (1,258,039) (103,302) 381,156 163,202 43,643,800 176,668,041 6,599,222 183,267,263
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Fund b5HVHUYH)XQGb b5HVHUYHb b5HVHUYHb Interests
Note b5Vbb bb5Vb b5Vb bb5Vbb b5Vb bb5Vbb b5Vb bb5Vbb bb5Vbb bb5Vbb bb5Vbb bb5Vbb
Balance as at 1st January 2022 30,680,591 6,683,653 8,560,000 30,816,980 57,100,000 (1,258,039) (103,302) 381,156 163,202 43,643,800 176,668,041 6,599,222 183,267,263
#FLWUVOGPVHQTUWTEJCTIGVCZNGXKGFWPFGTVJG
UWTEJCTIGVCZ#EV0QQH
C - - - - - - - - - (3,912,900) (3,912,900) (68,995) (3,981,895)
#ESWKUKVKQPQHPQPEQPVTQNNKPIKPVGTGUVFWTKPI
COCNICOCVKQPQH*0$(KPCPEG2.%YKVJ
2TKOG(KPCPEG2.% - - - - - - - - - - - (301,135) (301,135)
Adjusted balance as at 1st January 2022 30,680,591 6,683,653 8,560,000 30,816,980 57,100,000 (1,258,039) (103,302) 381,156 163,202 39,730,900 172,755,141 6,229,092 178,984,233
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDUb
0GVRTQƂVHQTVJG[GCT - - - - - - - - 15,328,572 15,328,572 419,663 15,748,235
Transfer of fair value losses on debt
instruments measured at FVOCI upon
TGENCUUKƂECVKQPVQCOQTVKUGFEQUV
OGCUWTGOGPVECVGIQT[
PGVQHVCZ
F - - - - - 2,181,042 - - - - 2,181,042 - 2,181,042
1VJGTEQORTGJGPUKXGKPEQOGPGVQHVCZ - - - (2,323,563) - (2,105,633) - - 448,051 1,590,675 (2,390,470) 255,727 (2,134,743)
7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDUb - - - (2,323,563) - 75,409 - - 448,051 16,919,247 15,119,144 675,390 15,794,534
7UDQVDFWLRQVZLWKHTXLW\KROGHUV
Contributions by and distributions
to equity holders
(KPCNFKXKFGPF%CUJ - - - - - - - - - (3,418,380) (3,418,380) (192,000) (3,610,380)
(KPCNFKXKFGPF5ETKR 1,052,150 262,611 - - - - - - - (1,314,761) - - -
/GTIGTTGUGTXGCTKUKPIHTQOCOCNICOCVKQPQH
UWDUKFKCT[*0$(KPCPEG2.%CPF2TKOG
(KPCPEG2.% - - - - - - - - - 6,649 6,649 8,966 15,615
2TGCOCNICOCVKQPRTQƂVQH2TKOG(KPCPEG2.% - - - - - - - - - 53,683 53,683 73,648 127,331
Total contributions by and distributions to
HTXLW\KROGHUVb 1,052,150 262,611 - - - - - - - (4,672,809) (3,358,048) (109,386) (3,467,434)
Transfer to life policy holder
reserve fund
G - - - - - - (1,244,429) - - - (1,244,429) - (1,244,429)
6TCPUHGTQH
unclaimed dividends - - - - - - - - - 20,022 20,022 - 20,022
6TCPUHGTUFWTKPIVJG[GCT - - 750,000 - 1,000,000 - - - - (1,750,000) - - -
Balance as at 31st December 2022 31,732,741 6,946,264 9,310,000 28,493,417 58,100,000 (1,182,630) (1,347,731) 381,156 611,253 50,247,360 183,291,830 6,795,096 190,086,926
FINANCIAL REPORTS
STATEMENT OF CASH FLOWS
#%%1706+0)21.+%;
6JGUVCVGOGPVQHECUJƃQYUJCUDGGPRTGRCTGFWUKPIVJGFKTGEVOGVJQFQHRTGRCTKPIECUJƃQYUKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI
5VCPFCTF.-#5QPp5VCVGOGPVQH%CUJ(NQYUqYJGTGD[ITQUUECUJTGEGKRVUCPFITQUUECUJRC[OGPVUQHQRGTCVKPICEVKXKVKGUƂPCPEKPICEVKXKVKGU
CPFKPXGUVKPICEVKXKVKGUJCXGDGGPTGEQIPKUGF%CUJCPFECUJGSWKXCNGPVUEQORTKUGQHUJQTVVGTOJKIJN[NKSWKFKPXGUVOGPVUVJCVCTGTGCFKN[
EQPXGTVKDNGVQMPQYPCOQWPVUQHECUJCPFCTGUWDLGEVVQCPKPUKIPKƂECPVTKUMQHEJCPIGKPXCNWG
6JGECUJCPFECUJGSWKXCNGPVUKPENWFGECUJKPJCPFDCNCPEGUYKVJDCPMURNCEGOGPVUYKVJDCPMUOQPG[CVECNNCPFUJQTVPQVKEG
Bank Group
Note Rs 000 Rs 000 Rs 000 Rs 000
&DVK̎RZVIURPRSHUDWLQJDFWLYLWLHV
Interest receipts 204,741,871 218,374,687
Interest payments (78,077,951)
(82,156,552)

Net commission receipts 15,080,565 15,895,361
0GVVTCFKPIKPEQOG 4,526,126
4,534,746

Payments to employees (14,787,910)
(18,013,411)

6CZGUQPƂPCPEKCNUGTXKEGU (3,857,416)
(4,061,341)

4GEGKRVUHTQOQVJGTQRGTCVKPICEVKXKVKGU 7,568,756 21,354,498
2C[OGPVUHQTQVJGTQRGTCVKPICEVKXKVKGU (10,738,450)
(24,821,097)

2SHUDWLQJSUR̍WEHIRUHFKDQJHVLQRSHUDWLQJDVVHWVDQGOLDELOLWLHV 124,455,591 131,106,891
(Increase)/decrease in operating assets

$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC (6,523,852)
(6,523,852)

NQCPUCPFCFXCPEGUVQEWUVQOGTU (58,431,085)
(65,103,007)

4GXGTUGTGRWTEJCUGCITGGOGPVU - 4,865,697

Other assets (6,107,771)
(6,967,076)

(71,062,708)
(73,728,238)

Increase/(decrease) in operating liabilities

(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 149,135,812 152,260,052
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU (14,013,993)
(13,786,954)

5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU (27,224,146) (27,224,146)
Other liabilities (16,324,873) (16,423,675)
91,572,800 94,825,277
1HWFDVKXVHGLQJHQHUDWHGIURPRSHUDWLQJDFWLYLWLHV
before income tax 144,965,683
152,203,930

+PEQOGCPFUWTEJCTIGVCZRCKF (9,520,889)
(10,222,643)

1HWFDVKXVHGLQJHQHUDWHGIURPRSHUDWLQJDFWLYLWLHV 135,444,794
141,981,287

&DVK̎RZVIURPLQYHVWLQJDFWLYLWLHV
2WTEJCUGQHRTQRGTV[RNCPVCPFGSWKROGPV 37 (1,173,458)
(1,471,498)

2TQEGGFUHTQOVJGUCNGQHRTQRGTV[RNCPVCPFGSWKROGPV 13,295 17,387
0GVRTQEGGFUHTQOUCNGOCVWTKV[CPFRWTEJCUGQHƂPCPEKCNKPXGUVOGPVU (33,860,569) (46,443,765)
0GVRWTEJCUGQHKPVCPIKDNGCUUGVU 39 (229,884)
(285,513)

0GVECUJGHHGEVQPCESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.%
CK - -

Dividends received from investment in subsidiaries 14 287,933 -
Dividends received from other investments 41,771 50,872

Bank Group
Note Rs 000 Rs 000 Rs 000 Rs 000
1HWFDVKXVHGLQJHQHUDWHGIURPLQYHVWLQJDFWLYLWLHV (34,920,912) (48,132,517)
&DVK̎RZVIURP̍QDQFLQJDFWLYLWLHV
Proceeds from the issue of subordinated debt - 2,000,000
4GRC[OGPVQHUWDQTFKPCVGFFGDVFGDVUGEWTKVKGUKUUWGF (700,000)
b

&KXKFGPFRCKFVQPQPEQPVTQNNKPIKPVGTGUVU bbb b

Dividend paid to shareholders of the parent company b
b

1HWFDVKXVHGLQ̍QDQFLQJDFWLYLWLHV b
b

1HWLQFUHDVHLQFDVKDQGFDVKHTXLYDOHQWV 96,424,655 91,530,099

%CUJCPFECUJGSWKXCNGPVUCVVJGDGIKPPKPIQHVJG[GCT 38,185,254 47,271,645
&DVKDQGFDVKHTXLYDOHQWVDWWKHHQGRIWKH\HDU 134,609,909 138,801,744
1RWH>D@5HFRQFLOLDWLRQRIRSHUDWLQJSUR̍WEHIRUH
changes in operating assets and liabilities
2TQƂVDGHQTGKPEQOGVCZ 11,973,906 14,420,257
#OQTVKUCVKQPQHKPVCPIKDNGCUUGVU
D 409,274 503,555
#OQTVKUCVKQPQHTKIJVQHWUGCUUGVU
D 865,228 871,892
#EETGVKQPQHKPVGTGUVQPTKIJVQHWUGCUUGVU
D 859,672 341,159
Accrual for interest payable 26,876,001
26,825,599

Accrual for interest receivable (4,974,147) (4,906,468)
Accrual for other payables 2,056,359
3,099,067

Accrual for other receivable 14,418,145
11,501,007

Depreciation of investment property
D 5,335 29,305
&GRTGEKCVKQPQHRTQRGTV[RNCPVCPFGSWKROGPV
D 1,287,867 1,782,933
Dividend income (329,704)
(50,872)

)CKP
NQUUQP(%$7TGXCNWCVKQP (19,418,284)
(19,418,284)

)CKPQPFKURQUCNQHRTQRGTV[RNCPVCPFGSWKROGPV 14 (9,695)
(12,114)

+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 15 90,461,305 91,735,672
+PETGCUGKPKPUWTCPEGEQPVTCEVNKCDKNKVKGUNKHG - 4,214,388
/QXGOGPVKPIGPGTCNKPUWTCPEGTGUGTXGHWPF - 445,667
0GVICKPCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVU 13 - -

0GVECRKVCNICKP
NQUUHTQOƂPCPEKCNCUUGVU
OGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU (17,915)
(22,001)

0GVICKPHTQOOCTMGFVQOCTMGVXCNWCVKQPQPƂPCPEKCNCUUGVU
OGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU (7,756)
78,102

5JCTGQHRTQƂVUQHLQKPVXGPVWTG 20 - (331,973)

124,455,591 131,106,891
1RWH>E@&DVKDQGFDVKHTXLYDOHQWVDWWKHHQGRIWKH\HDU
%CUJCPFECUJGSWKXCNGPVU 25 80,238,881 80,629,698
134,609,909 138,801,744
6JGPQVGUVQVJGƂPCPEKCNUVCVGOGPVUHTQORCIGVQHQTOCPKPVGITCNRCTVQHVJGUGƂPCPEKCNUVCVGOGPVU
FINANCIAL REPORTS
NOTES TO THE FINANCIAL STATEMENTS
1 REPORTING ENTITY 6JGUVCHHUVTGPIVJQHVJG)TQWRCPFVJG$CPMYCUCUHQNNQYU

1.1 Corporate Information
*CVVQP0CVKQPCN$CPM2.%
VJGp$CPMqKUCRWDNKESWQVGF As at 31st December 2022 2021
company incorporated on 5th March 1970 with limited $CPM
NKCDKNKV[CPFFQOKEKNGFKP5TK.CPMC+VKUCNKEGPUGFEQOOGTEKCN
Group
DCPMTGIKUVGTGFWPFGTVJG$CPMKPI#EV0QQHCPF
COGPFOGPVUVJGTGVQ6JG$CPMYCUTGTGIKUVGTGFWPFGTVJG %QTRQTCVGKPHQTOCVKQPKURTGUGPVGFKPKPPGTDCEMEQXGTQHVJKU
%QORCPKGU#EV0QQH6JGTGIKUVGTGFQHƂEGQHVJG$CPM Annual Report.
KUUKVWCVGFCV0Q6$,C[CJ/CYCVJC%QNQODQ6JG
UJCTGUQHVJG$CPMJCXGCRTKOCT[NKUVKPIQPVJG%QNQODQ5VQEM 1.2 Consolidated Financial Statements
'ZEJCPIG6JGWPUGEWTGFUWDQTFKPCVGFFGDGPVWTGUQHVJGDCPM
6JGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUQHVJG)TQWRHQTVJG[GCT
CTGCNUQNKUVGFQPVJG%QNQODQ5VQEM'ZEJCPIG
GPFGFUV&GEGODGTKPENWFGVJG$CPMCPFKVUUWDUKFKCTKGU

VQIGVJGTTGHGTTGFVQCUVJGp)TQWRqCPFKPFKXKFWCNN[CU
6JG$CPMFQGUPQVJCXGCPKFGPVKƂCDNGRCTGPVQHKVUQYP6JG
p)TQWRGPVKVKGUqCPFVJG)TQWRoUKPVGTGUVKPKVULQKPVXGPVWTG
*CVVQP0CVKQPCN$CPM2.%KUVJGWNVKOCVGRCTGPVQHVJG)TQWR
6JGƂPCPEKCNUVCVGOGPVUQHCNNEQORCPKGUKPVJG)TQWRJCXGC
6JGUVTWEVWTGQHVJG)TQWRKUIKXGPDGNQY EQOOQPƂPCPEKCN[GCTYJKEJGPFUQP&GEGODGTUVGZEGRV
HQTUWDUKFKCT[*0$(KPCPEG2.%CPF.CPMC8GPVWTGU2.%
C
UWDUKFKCT[QH#EWKV[2CTVPGTU
2XV.KOKVGFVJGLQKPVXGPVWTG
YJQUGƂPCPEKCN[GCTGPFQP/CTEJUV
HATTON
NATIONAL
BANK PLC
SUBSIDIARIES JOINT VENTURE
Sithma Development HNB

HNB Assurance PLC
PVT LTD Finance PLC
Acuity
Partners PVT LTD
100% 60% 42.16%
50%
HNB
General Insurance LTD
100%

1.3 Principal Activities and Nature of Operations
6JGRTKPEKRCNCEVKXKVKGUQHVJGITQWREQORCPKGUEQORTKUKPIQHVJGUWDUKFKCTKGUCPFVJGLQKPVXGPVWTGEQORCP[CTGUWOOCTKUGFDGNQY
Entity 3ULQFLSDOEXVLQHVVDFWLYLW\
Hatton National Bank PLC $CPMKPICPFTGNCVGFCEVKXKVKGUUWEJCUFGRQUKVCEEGRVCPEGEQTRQTCVGCPFTGVCKNDCPMKPIRGTUQPCNƂPCPEKCN
UGTXKEGUQHHUJQTGDCPMKPIHQTGKIPEWTTGPE[QRGTCVKQPUVTCFGUGTXKEGUKPXGUVOGPVDCPMKPIFGXGNQROGPV
DCPMKPITWTCNƂPCPEGRTQLGEVƂPCPEGNGCUKPIKUUWKPIQHNQECNCPFKPVGTPCVKQPCNFGDKVCPFETGFKVECTFU
KPVGTPGVDCPMKPIOQDKNGDCPMKPIOQPG[TGOKVVCPEGHCEKNKVKGUFGCNKPIKPIQXGTPOGPVUGEWTKVKGUCPF
VTGCUWT[TGNCVGFRTQFWEVUGZRQTVCPFFQOGUVKEHCEVQTKPIRCYPKPIOCTIKPVTCFKPIFKIKVCNDCPMKPI
UGTXKEGUDCPECUUWTCPEGCPFKUNCOKEDCPMKPIRTQFWEVUCPFUGTXKEGUGVE
Subsidiaries
HNB Assurance PLC 2TQXKFGUNKHGKPUWTCPEGUQNWVKQPUHQTDQVJKPFKXKFWCNCPFEQTRQTCVGEWUVQOGTU.KHGKPUWTCPEGKUCRTQVGEVKQP
CICKPUVƂPCPEKCNNQUUGUVJCVYQWNFTGUWNVHTQOCPKPUWTGFGXGPVCFXGTUGN[CHHGEVKPIVJGKPUWTGF+PUWEJ
UKVWCVKQPUVJGPQOKPCVGFDGPGƂEKCT[TGEGKXGUVJGRTQEGGFUCPFKUVJGTGD[UCHGIWCTFGFHTQOƂPCPEKCN
KORCEVUQHVJGKPUWTGFGXGPV6JGDGPGƂVRCKFD[CNKHGKPUWTGTKUEQPUKFGTCVKQPKPGZEJCPIGHQTRTGOKWO
payments made by the insured.
HNB General Insurance Ltd 2TQXKFGUIGPGTCNKPUWTCPEGUQNWVKQPUHQTDQVJKPFKXKFWCNCPFEQTRQTCVGEWUVQOGTU+PUWTCPEGQVJGTVJCP
)XOO\RZQHGVXEVLGLDU\RI+1% n.KHG+PUWTCPEGoHCNNUWPFGTVJGECVGIQT[QHIGPGTCNKPUWTCPEG(KTGOQVQTOCTKPGCPFOKUEGNNCPGQWU
Assurance PLC) KPUWTCPEGCTGVJGOCKPECVGIQTKGUWPFGTIGPGTCNKPUWTCPEG
6LWKPD'HYHORSPHQW3YW/WG %QPUVTWEVKQPCPFNGVVKPIQHRTGOKUGUHQTEQOOGTEKCNRWTRQUGUCPFTGNCVGFUGTXKEGU
HNB Finance PLC 2TQXKUKQPQHOKETQƂPCPEGHCEKNKVKGURGTUQPCNCPFDWUKPGUUNQCPUNGCUKPIJQWUKPINQCPURCYPKPIGVE
RTKOCTKN[HQEWUKPIQPVJGNQYGTKPEQOGUGIOGPVQHVJGEQOOWPKV[CPFOQDKNKUCVKQPQHRWDNKEFGRQUKVU
1PVJ/C[*0$(KPCPEG2.%COCNICOCVGFYKVJ2TKOG(KPCPEG2.%WPFGTUGEVKQPQHVJG
%QORCPKGU#EV0QQH#EEQTFKPIN[VJGCHQTGOGPVKQPGFCOCNICOCVKPIEQORCPKGUEQPVKPWGCU*0$
(KPCPEG2.%YGHVJ/C[
Prime Finance PLC (Subsidiary 2TQXKUKQPQHCEEGRVCPEGQHFGRQUKVUITCPVKPINGCUGHCEKNKVKGUJKTGRWTEJCUGOQTVICIGNQCPUCPFQVJGT
of HNB Finance PLC upto 12th ETGFKVHCEKNKVKGUTGCNGUVCVGCPFTGNCVGFUGTXKEGU
May 2022)
Joint Ventures
$FXLW\3DUWQHUV3YW/WG +PXGUVOGPVDCPMKPICPFTGNCVGFCEVKXKVKGUUWEJCUEQTRQTCVGƂPCPEGFGDVUVTWEVWTKPICPF+21oUCPFOCTIKP
VTCFKPIHCEKNKVKGU
6JGTGYGTGPQUKIPKƂECPVEJCPIGUKPVJGPCVWTGQHVJGRTKPEKRCNCEVKXKVKGUQHVJG)TQWRFWTKPIVJGƂPCPEKCN[GCTWPFGTTGXKGY6JGITQWR
EQORCPKGUCTGFQOKEKNGFKP5TK.CPMC
2 BASIS OF ACCOUNTING &GVCKNUQHVJG)TQWRoUUKIPKƂECPVCEEQWPVKPIRQNKEKGUHQNNQYGF

2.1 Basis of Preparation FWTKPIVJG[GCTCTGIKXGPKPPQVGUVQQPRCIGUVQ
2.1.1 Statement of Compliance The formats used in the preparation and presentation of
6JGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUQHVJG)TQWRCPFVJG VJGƂPCPEKCNUVCVGOGPVUCPFVJGFKUENQUWTGUOCFGVJGTGKP
UGRCTCVGƂPCPEKCNUVCVGOGPVUQHVJG$CPMJCXGDGGPRTGRCTGF CNUQEQORNKGFYKVJVJGURGEKƂGFHQTOCVURTGUETKDGFD[VJG
KPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTFU
EQOOQPN[ %GPVTCN$CPMQH5TK.CPMC
%$5.KPEKTEWNCT0QQHFCVGF
TGHGTTGFCUp5.(45qp.-#5qNCKFFQYPD[VJG+PUVKVWVGQH ,CPWCT[QPp2WDNKECVKQPQH#PPWCNCPF3WCTVGTN[
%JCTVGTGF#EEQWPVCPVUQH5TK.CPMC
%#5TK.CPMCCPFEQORN[ (KPCPEKCN5VCVGOGPVUCPF1VJGT&KUENQUWTGUD[.KEGPUGF$CPMUq
YKVJVJGTGSWKTGOGPVUQH%QORCPKGU#EV0QQH$CPMKPI
#EV0QQH+PUWTCPEG+PFWUVT[#EV0QQHCPF (WTVJGTVJGVCZNKCDKNKV[CTKUKPIHTQOVJG5WTEJCTIG6CZ#EV0Q
(KPCPEG$WUKPGUU#EV0QQHCPFCOGPFOGPVVJGTGVQ of 2022 has been accounted as recommended by the Statement
CPFRTQXKFGCRRTQRTKCVGFKUENQUWTGUCUTGSWKTGFD[VJGNKUVKPI QH#NVGTPCVKXG6TGCVOGPV
51#6KUUWGFD[VJG+PUVKVWVGQH
TWNGUQHVJG%QNQODQ5VQEM'ZEJCPIG
%5' %JCTVGTGF#EEQWPVCPVUQH5TK.CPMCCUFKUENQUGFWPFGT
0QVG
CVQVJG(KPCPEKCN5VCVGOGPVU
6JG)TQWRFKFPQVCFQRVCP[KPCRRTQRTKCVGCEEQWPVKPI
VTGCVOGPVUYJKEJCTGPQVKPEQORNKCPEGYKVJVJGTGSWKTGOGPVQH 2.1.2 Responsibility for Financial Statements
VJG5.(45UCPF.-#5UTGIWNCVKQPUIQXGTPKPIVJGRTGRCTCVKQP 6JG$QCTFQH&KTGEVQTUCEMPQYNGFIGUVJGKTTGURQPUKDKNKV[HQT
CPFRTGUGPVCVKQPQHƂPCPEKCNUVCVGOGPVU ƂPCPEKCNUVCVGOGPVUCUUGVQWVKPVJGp#PPWCN4GRQTVQHVJG
FINANCIAL REPORTS
$QCTFQH&KTGEVQTUQPVJG#HHCKTUQHVJG%QORCP[qq&KTGEVQTUo r CUVCVGOGPVQHƂPCPEKCNRQUKVKQP
51(2RTQXKFKPIVJG
4GURQPUKDKNKV[HQT(KPCPEKCN4GRQTVKPIqCPFVJGEGTVKƂECVKQPQP KPHQTOCVKQPQPVJGƂPCPEKCNRQUKVKQPQHVJG)TQWRCPFVJG
VJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPQPRCIGUCPF $CPMCUCVVJG[GCTGPF4GHGTRCIGUCPF
respectively.
r CUVCVGOGPVQHEJCPIGUKPGSWKV[FGRKEVKPICNNEJCPIGUKP
2.1.3 Approval of Financial Statements by Directors UJCTGJQNFGTUoHWPFUFWTKPIVJG[GCTWPFGTTGXKGYQHVJG
)TQWRCPFVJG$CPM4GHGTRCIGUVQ
6JGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRCPFVJG$CPMYGTG
CWVJQTKUGFHQTKUUWGD[VJG$QCTFQH&KTGEVQTUKPCEEQTFCPEGYKVJ r CUVCVGOGPVQHECUJƃQYURTQXKFKPIVJGKPHQTOCVKQPVQVJG
the resolution of the directors on 17th February 2023. WUGTUQPVJGCDKNKV[QHVJG)TQWRCPFVJG$CPMVQIGPGTCVG
ECUJCPFECUJGSWKXCNGPVUCPFWVKNKUCVKQPQHVJQUGECUJƃQYU
6JGUGƂPCPEKCNUVCVGOGPVUKPENWFGVJGHQNNQYKPIEQORQPGPVU 4GHGTRCIGCPF
r CPKPEQOGUVCVGOGPVCPFUVCVGOGPVQHRTQƂVQTNQUUCPF r PQVGUVQVJGƂPCPEKCNUVCVGOGPVUEQORTKUKPIUKIPKƂECPV
QVJGTEQORTGJGPUKXGKPEQOGRTQXKFKPIVJGKPHQTOCVKQPQP CEEQWPVKPIRQNKEKGUCPFQVJGTGZRNCPCVQT[KPHQTOCVKQP4GHGT
VJGƂPCPEKCNRGTHQTOCPEGQHVJG)TQWRCPFVJG$CPMHQTVJG RCIGUVQ
[GCTWPFGTTGXKGYTGHGTRCIGUCPF
2.1.4 Basis of Measurement

6JGƂPCPEKCNUVCVGOGPVUJCXGDGGPRTGRCTGFQPVJGJKUVQTKECNEQUVDCUKUCPFCRRNKGFEQPUKUVGPVN[GZEGRVHQTVJGHQNNQYKPIKVGOUKPVJG
UVCVGOGPVQHƂPCPEKCNRQUKVKQP
Item Basis of measurement Note Page

Reference Reference
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU Fair value 29 332

(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQT Fair value 30 333
loss
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGT Fair value 33 357
(TGGJQNFNCPFCPFDWKNFKPIU /GCUWTGFCVEQUVCVVJGVKOGQHCESWKUKVKQPCPF 37 374
UWDUGSWGPVN[CVTGXCNWGFCOQWPVUYJKEJCTGVJGHCKT
values at the date of revaluation
Insurance contract liabilities Actuarially determined value of life insurance liability 49 401
GUVKOCVGFDCUGFQPCEVWCTKCNIWKFGNKPGUKUUWGFD[
+PUWTCPEG4GIWNCVQT[%QOOKUUKQPQH5TK.CPMC
+4%5.
+PEWTTGFDWVPQVTGRQTVGFKPEWTTGFDWVPQVGPQWIJ Actuarially determined values based on internationally 50 403
reported liability CEEGRVGFCEVWCTKCNRQNKEKGUCPFOGVJQFQNQIKGU
&GƂPGFDGPGƂVQDNKICVKQPU .KCDKNKV[HQTFGƂPGFDGPGƂVQDNKICVKQPUKUTGEQIPKUGFCU 53 408
VJGRTGUGPVXCNWGQHVJGFGƂPGFDGPGƂVQDNKICVKQPNGUU
the fair value of the plan assets
2.1.5 Going Concern VJCVOC[ECUVUKIPKƂECPVFQWDVWRQPVJG)TQWRoUCDKNKV[VQ

EQPVKPWGCUCIQKPIEQPEGTP
6JGFKTGEVQTUJCXGOCFGCPCUUGUUOGPVQHVJG)TQWRoUCDKNKV[
VQEQPVKPWGCUCIQKPIEQPEGTPCPFCTGUCVKUƂGFVJCVKVJCUVJG
5RGEKƂECNN[VJGJKIJFGITGGQHWPEGTVCKPV[VJCVEJCTCEVGTK\GU
resources to continue in business for the foreseeable future.
the internal economic environment led to deterioration in the
6JGCUUGUUOGPVVQQMKPVQEQPUKFGTCVKQPVJGEWTTGPVGEQPQOKE
creditworthiness of corporate and individuals. This resulted in an
FGXGNQROGPVUKPQTFGTVQOCMGRTQLGEVKQPUHQTHWVWTGGEQPQOKE
KPETGCUGQHPQPRGTHQTOKPINQCPUCPFVJGTGHQTGVJGTGEQIPKVKQP
conditions of the environment in which it operates. The main
QHUKIPKƂECPVKORCKTOGPVNQUUGUD[VJG$CPMCPFD[VJGDCPMKPI
HCEVQTUVJCVECWUGWPEGTVCKPVKGUTGICTFKPIVJGCRRNKECVKQPQHVJKU
UGEVQTKPIGPGTCN$CUGFQPVJGCDQXGCNQPIYKVJVJG)TQWRoU
principle relate to the unstable economic environment in the
ECRKVCNCFGSWCE[NGXGNUCPFVJGCDKNKV[QHVJG$CPMVQCEEGUUVJG
EQWPVT[KORNKECVKQPUQH%18+&RCPFGOKEQPVJGDWUKPGUU
NKSWKFKV[OGEJCPKUOUVJG)TQWRGUVKOCVGUVJCVVJGEQPFKVKQPU
QRGTCVKQPURGTHQTOCPEGQHVJG)TQWRCPFVJGOGCUWTGU
HQTVJGCRRNKECVKQPQHVJGIQKPIEQPEGTPRTKPEKRNGKPRTGRCTCVKQP
CFQRVGFD[VJGIQXGTPOGPVVQUWRRQTVVJGTGEQXGT[QHVJG
QHKVUƂPCPEKCNUVCVGOGPVUCTGOGV6JGTGHQTGVJGƂPCPEKCN
GEQPQO[6JG$QCTFKUPQVCYCTGQHCP[OCVGTKCNWPEGTVCKPVKGU
UVCVGOGPVUEQPVKPWGVQDGRTGRCTGFQPVJGIQKPIEQPEGTPDCUKU

2.1.6 Functional and Presentation Currency 2.2 Accounting Judgements, Estimates and Assumptions
6JGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRCTGRTGUGPVGFKP5TK 6JGRTGRCTCVKQPQHVJGƂPCPEKCNUVCVGOGPVUTGSWKTGU
.CPMCP4WRGGU
.-4YJKEJKUVJGEWTTGPE[QHVJGRTKOCT[ OCPCIGOGPVVQOCMGLWFIGOGPVUGUVKOCVGUCPFCUUWORVKQPU
GEQPQOKEGPXKTQPOGPVKPYJKEJVJG)TQWRQRGTCVGU
)TQWRoU VJCVCHHGEVVJGTGRQTVGFCOQWPVQHTGXGPWGUGZRGPUGUCUUGVU
HWPEVKQPCNEWTTGPE['CEJGPVKV[KPVJG)TQWRFGVGTOKPGUKVU NKCDKNKVKGUCPFVJGCEEQORCP[KPIFKUENQUWTGUCUYGNNCUVJG
QYPHWPEVKQPCNEWTTGPE[CPFKVGOUKPENWFGFKPVJGƂPCPEKCN FKUENQUWTGQHEQPVKPIGPVNKCDKNKVKGU7PEGTVCKPV[CDQWVVJGUG
UVCVGOGPVUQHGCEJKPFKXKFWCNGPVKV[CTGOGCUWTGFWUKPIVJCV CUUWORVKQPUCPFGUVKOCVGUEQWNFTGUWNVKPQWVEQOGUVJCVTGSWKTG
HWPEVKQPCNEWTTGPE[6JGTGYCUPQEJCPIGKPVJG)TQWRoU COCVGTKCNCFLWUVOGPVVQVJGECTT[KPICOQWPVQHCUUGVUQT
RTGUGPVCVKQPCPFHWPEVKQPCNEWTTGPE[FWTKPIVJG[GCTWPFGT NKCDKNKVKGUCHHGEVGFKPHWVWTGRGTKQFU+PVJGRTQEGUUQHCRRN[KPI
review. VJG)TQWRoUCEEQWPVKPIRQNKEKGUOCPCIGOGPVJCUOCFGVJG
HQNNQYKPILWFIGOGPVUCPFCUUWORVKQPUEQPEGTPKPIVJGHWVWTG
2.1.7 Presentation of Financial Statements CPFQVJGTMG[UQWTEGUQHGUVKOCVKQPWPEGTVCKPV[CVVJGTGRQTVKPI
The assets and liabilities of the Group presented in the FCVGVJCVJCXGCUKIPKƂECPVTKUMQHECWUKPICOCVGTKCNCFLWUVOGPV
UVCVGOGPVQHƂPCPEKCNRQUKVKQPCTGITQWRGFD[PCVWTGCPFNKUVGF VQVJGECTT[KPICOQWPVUQHCUUGVUCPFNKCDKNKVKGUYKVJKPVJGPGZV
KPCPQTFGTVJCVTGƃGEVUVJGKTTGNCVKXGNKSWKFKV[CPFOCVWTKV[ ƂPCPEKCN[GCT'ZKUVKPIEKTEWOUVCPEGUCPFCUUWORVKQPUCDQWV
pattern. An analysis on recovery or settlement within 12 months HWVWTGFGXGNQROGPVUOC[EJCPIGFWGVQEKTEWOUVCPEGUDG[QPF
CHVGTVJGTGRQTVKPIFCVG
EWTTGPVCPFOQTGVJCPOQPVJUCHVGT VJG)TQWRoUEQPVTQNCPFCTGTGƃGEVGFKPVJGCUUWORVKQPUKH
VJGTGRQTVKPIFCVG
PQPEWTTGPVKURTGUGPVGFKP0QVGVQVJG CPFYJGPVJG[QEEWT'UVKOCVGUCPFWPFGTNKPKPICUUWORVKQPU
ƂPCPEKCNUVCVGOGPVU CTGTGXKGYGFQPCPQPIQKPIDCUKU4GXKUKQPUVQCEEQWPVKPI
GUVKOCVGUCTGTGEQIPKUGFRTQURGEVKXGN[+VGOUYKVJVJGOQUV
0QCFLWUVOGPVUJCXGDGGPOCFGHQTVJGKPƃCVKQPCT[HCEVQTU UKIPKƂECPVGHHGEVQPVJGCOQWPVUTGEQIPKUGFKPVJGEQPUQNKFCVGF
CHHGEVKPIVJGƂPCPEKCNUVCVGOGPVU ƂPCPEKCNUVCVGOGPVUYKVJUWDUVCPVKCNOCPCIGOGPVLWFIGOGPV
CPFQTGUVKOCVGUCTGEQNNCVGFDGNQYYKVJTGURGEVVQLWFIGOGPV
2.1.8 Rounding
estimates involved.
6JGCOQWPVUKPVJGƂPCPEKCNUVCVGOGPVUJCXGDGGPTQWPFGF
off to the nearest rupees thousands except where otherwise 2.2.1 Economic environment
KPFKECVGFCURGTOKVVGFD[VJG5TK.CPMC#EEQWPVKPI5VCPFCTF *KIJFGITGGQHWPEGTVCKPV[VJCVEJCTCEVGTK\GUVJGKPVGTPCN
.-#5QPp2TGUGPVCVKQPQH(KPCPEKCN5VCVGOGPVUq economic environment followed by the economic crisis
KPVJGEQWPVT[JCUNGFVQCUKIPKƂECPVFGVGTKQTCVKQPKPVJG
2.1.9 Offsetting
creditworthiness of corporate and individuals. This resulted in an
(KPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUCTGQHHUGVCPFVJGPGV KPETGCUGQHPQPRGTHQTOKPINQCPUCPFVJGTGHQTGVJGTGEQIPKVKQP
COQWPVKUTGRQTVGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPQPN[ QHUKIPKƂECPVKORCKTOGPVNQUUGUD[VJG$CPMCPFDCPMKPIUGEVQT
YJGPVJGTGKUCNGICNN[GPHQTEGCDNGTKIJVVQQHHUGVVJGTGEQIPKUGF KPIGPGTCN
COQWPVUCPFVJGTGKUCPKPVGPVKQPVQUGVVNGQPCPGVDCUKUQT
to realise the assets and settle the liabilities simultaneously. 6JG$CPMoUVQVCNGZRQUWTGVQ5TK.CPMCIQXGTPOGPVUGEWTKVKGU
Income and expenses are not offset in the income statement FGPQOKPCVGFKPHQTGKIPEWTTGPE[KURTGUGPVGFKP0QVG
C
WPNGUUTGSWKTGFQTRGTOKVVGFD[CPCEEQWPVKPIUVCPFCTFQT VQVJGƂPCPEKCNUVCVGOGPVU6JGOCKPWPEGTVCKPV[KPGUVKOCVKPI
KPVGTRTGVCVKQPCPFCUURGEKƂECNN[FKUENQUGFKPVJGCEEQWPVKPI VJGTGEQXGTCDKNKV[QHVJG$CPMoUVQVCNGZRQUWTGVQHQTGKIP
policies of the Group. EWTTGPE[FGPQOKPCVGFIQXGTPOGPVUGEWTKVKGUTGNCVGVQVJGFGDV
UGTXKEGECRCEKV[QHVJGEQWPVT[6JKUKPVWTPKUCHHGEVGFD[VJG
2.1.10 Materiality and aggregation RTGXCKNKPIOCETQGEQPQOKEGPXKTQPOGPVCPFVJGPGIQVKCVKQPU
Each material class of similar items is presented separately in the QH)QXGTPOGPVQH5TK.CPMCKPTGNCVKQPVQVJGFGDVTGUVTWEVWTKPI
ƂPCPEKCNUVCVGOGPVU+VGOUQHFKUUKOKNCTPCVWTGQTHWPEVKQPCTG CPFƂPCPEKPI
presented separately unless they are immaterial as permitted by
6JGUKIPKƂECPVCEEQWPVKPIGUVKOCVGUKORCEVGFD[VJGUG
VJG5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5p2TGUGPVCVKQPQH
forecasts and associated uncertainties are predominantly
(KPCPEKCN5VCVGOGPVUq
TGNCVGFVQGZRGEVGFETGFKVNQUUGUHCKTXCNWGOGCUWTGOGPVCPF
VJGCUUGUUOGPVQHVJGTGEQXGTCDNGCOQWPVQHPQPƂPCPEKCN
2.1.11 Comparative Information
assets. The impact of the economic conditions on each of
6JGEQORCTCVKXGKPHQTOCVKQPJCUDGGPTGENCUUKƂGFYJGTGGXGT these estimates is discussed further in the relevant notes of
PGEGUUCT[VQEQPHQTOYKVJVJGEWTTGPV[GCToUENCUUKƂECVKQPKP VJGUGƂPCPEKCNUVCVGOGPVU#EVWCNTGUWNVUOC[FKHHGTHTQOVJGUG
order to provide a better presentation. GUVKOCVGU'UVKOCVGUCPFWPFGTN[KPICUUWORVKQPUCTGTGXKGYGF
QPCPQPIQKPIDCUKU4GXKUKQPUVQGUVKOCVGUCTGTGEQIPKUGF
prospectively.
FINANCIAL REPORTS
2.2.2 Judgements
+PHQTOCVKQPCDQWVLWFIGOGPVUOCFGKPCRRN[KPICEEQWPVKPIRQNKEKGUVJCVJCXGVJGOQUVUKIPKƂECPVGHHGEVUQPVJGCOQWPVUTGEQIPKUGFKPVJG
EQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUKUKPENWFGFKPVJGHQNNQYKPIPQVGU
6LJQL̍FDQW-XGJHPHQWV Note Page

Reference Reference
%NCUUKƂECVKQPQHƂPCPEKCNCUUGVUCPFCUUGUUOGPVQHVJGDWUKPGUUOQFGNYKVJKPYJKEJVJGCUUGVUCTGJGNF 3.4.3 257

&GVGTOKPCVKQPQHHCKTXCNWGQHƂPCPEKCNKPUVTWOGPVUYJGPVJGTGKUPQQDUGTXCDNGOCTMGVFCVC 300
'UVCDNKUJKPIVJGETKVGTKCHQTFGVGTOKPCVKQPQHYJGVJGTETGFKVTKUMQPCƂPCPEKCNCUUGVJCUKPETGCUGFUKIPKƂECPVN[UKPEG
H 344
KPKVKCNTGEQIPKVKQPFGVGTOKPKPIVJGOGVJQFQNQI[HQTKPEQTRQTCVKPIHQTYCTFNQQMKPIKPHQTOCVKQPKPVQVJGOGCUWTGOGPV
QH'ZRGEVGF%TGFKV.QUUGU
'%.CPFVJGUGNGEVKQPCPFCRRTQXCNQHOQFGNUWUGFVQOGCUWTG'ZRGEVGF%TGFKV.QUUGU

'%.
Determination of control over investees
%NCUUKƂECVKQPQHKPXGUVOGPVRTQRGTVKGU
2.2.3 Assumptions and estimation uncertainties

+PHQTOCVKQPCDQWVCUUWORVKQPUCPFGUVKOCVKQPWPEGTVCKPVKGUVJCVJCXGCUKIPKƂECPVTKUMQHTGUWNVKPIKPCOCVGTKCNCFLWUVOGPVKPVJGƂPCPEKCN
UVCVGOGPVUHQTVJG[GCTGPFGFUV&GEGODGTKUKPENWFGFKPVJGHQNNQYKPIPQVGU
6LJQL̍FDQW$VVXPSWLRQVDQG(VWLPDWLRQ8QFHUWDLQWLHV Note Page

Reference Reference
+ORCKTOGPVVGUVKPIHQT%CUJ)GPGTCVKPI7PKVU
%)7EQPVCKPKPIIQQFYKNNMG[CUUWORVKQPUWPFGTN[KPITGEQXGTCDNG
amounts
/GCUWTGOGPVQHVJGHCKTXCNWGQHƂPCPEKCNKPUVTWOGPVUYKVJUKIPKƂECPVWPQDUGTXCDNGKPRWVU 300
+ORCKTOGPVQHƂPCPEKCNKPUVTWOGPVUFGVGTOKPCVKQPQHKPRWVUKPVQVJG'ZRGEVGF%TGFKV.QUU
'%.OGCUWTGOGPVOQFGN
D 339
KPENWFKPIMG[CUUWORVKQPUWUGFKPGUVKOCVKPITGEQXGTCDNGECUJƃQYUCPFKPEQTRQTCVKQPQHHQTYCTFNQQMKPIKPHQTOCVKQP
7UGHWNNKHGVKOGQHRTQRGTV[RNCPVCPFGSWKROGPVKPXGUVOGPVRTQRGTVKGUCPFKPVCPIKDNGCUUGVU
389
&GVGTOKPCVKQPQHVJGHCKTXCNWGQHHTGGJQNFNCPFCPFDWKNFKPIUQPVJGDCUKUQHUKIPKƂECPVWPQDUGTXCDNGKPRWVU
D 381
4KIJVQHWUGCUUGVUCPFQRGTCVKPINGCUGNKCDKNKV[ 38
(CKTXCNWGQHEQPUKFGTCVKQPVTCPUHGTTGFCPFHCKTXCNWGQHCUUGVCESWKTGFCPFNKCDKNKVKGUCUUWOGFOGCUWTGFQPRTQXKUKQPCN
CK 391
basis
4GEQIPKVKQPQHFGHGTTGFVCZCUUGVUCXCKNCDKNKV[QHHWVWTGVCZCDNGRTQƂVCICKPUVYJKEJECTT[HQTYCTFVCZNQUUGUECPDG
F 395
used
8CNWCVKQPQHNKHGKPUWTCPEGEQPVTCEVNKCDKNKVKGUQHUWDUKFKCT[*0$#UUWTCPEG2.%
*0$# 49 401
8CNWCVKQPQHPQPNKHGKPUWTCPEGEQPVTCEVNKCDKNKVKGUQHUWDUKFKCT[*0$)GPGTCN+PUWTCPEG.KOKVGF 50 403
/GCUWTGOGPVQHFGƂPGFDGPGƂVQDNKICVKQPUMG[CEVWCTKCNCUUWORVKQPU
EXKK 412
4GEQIPKVKQPCPFOGCUWTGOGPVQHEQPVKPIGPEKGUMG[CUUWORVKQPUCDQWVVJGNKMGNKJQQFCPFOCIPKVWFGQHCPQWVƃQYQH 59 420
resources

Accounting policy Note Page
Reference Reference
6LJQL̍FDQWDFFRXQWLQJSROLFLHVʶ*HQHUDO
$CUKUQHEQPUQNKFCVKQP 3.1 254
(QTGKIPEWTTGPE[ 3.2 255
(KPCPEKCNKPUVTWOGPVUs+PKVKCNTGEQIPKVKQPENCUUKƂECVKQPCPFUWDUGSWGPVOGCUWTGOGPV 3.3 255
Investment in joint venture 34
Investment in subsidiaries 35
Investment properties
2TQRGTV[RNCPVCPFGSWKROGPV 37 374
4KIJVQHWUGCUUGVU 38
+PVCPIKDNGCUUGVUCPFIQQFYKNN 39 389
&WGVQDCPMU 42 397
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 43 397
Financial liabilities measured at amortised cost – Due to depositors 44 398
(KPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVs1VJGTDQTTQYKPIU 399
Debt securities issued 47 400
Subordinated term debts 52
+PUWTCPEGRTQXKUKQPs.KHG 49 401
+PUWTCPEGRTQXKUKQPs0QPNKHG 50 403
'ORNQ[GGDGPGƂVQDNKICVKQPU 53 408
%QPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU 59 420
6LJQL̍FDQWDFFRXQWLQJSROLFLHVʶ5HFRJQLWLRQRILQFRPHDQGH[SHQVHV
Gross income 7 303
Net interest income 8 304
Net fee and commission income 9
0GVNQUUGUHTQOVTCFKPI 10 308
0GVICKPHTQOƂPCPEKCNKPXGUVOGPVUCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 11 309
Net insurance premium income 12 310
0GVICKPUCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVU 13 311
0GVQVJGTQRGTCVKPIKPEQOG 14 312
+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 15 313
Personnel expenses 314
$GPGƂVUENCKOUCPFWPFGTYTKVKPIGZRGPFKVWTG 17 315
Other expenses 18 317
Income tax expenses 21 319
FINANCIAL REPORTS
3. SIGNIFICANT ACCOUNTING POLICIES The consideration transferred does not include amounts related
Application of Accounting Policies VQVJGUGVVNGOGPVQHRTGGZKUVKPITGNCVKQPUJKRU5WEJCOQWPVUCTG
IGPGTCNN[TGEQIPKUGFKPKPEQOGUVCVGOGPV
6JG)TQWRJCUEQPUKUVGPVN[CRRNKGFVJGCEEQWPVKPIRQNKEKGUHQT
CNNRGTKQFURTGUGPVGFKPVJGƂPCPEKCNUVCVGOGPVU6JG)TQWR #P[EQPVKPIGPVEQPUKFGTCVKQPKUOGCUWTGFCVHCKTXCNWGCV
JCUPQVGCTN[CFQRVGFCP[QVJGTUVCPFCTFKPVGTRTGVCVKQPQT VJGFCVGQHCESWKUKVKQP+HCPQDNKICVKQPVQRC[EQPVKPIGPV
amendment that has been issued but not yet effective. EQPUKFGTCVKQPVJCVOGGVUVJGFGƂPKVKQPQHCƂPCPEKCNKPUVTWOGPV
KUENCUUKƂGFCUGSWKV[VJGPKVKUPQVTGOGCUWTGFCPFUGVVNGOGPV
#RCTVHTQOVJGIGPGTCNCEEQWPVKPIRQNKEKGUUGVQWVDGNQYVJG
KUCEEQWPVGFHQTYKVJKPGSWKV[1VJGTYKUGQVJGTEQPVKPIGPV
URGEKƂECEEQWPVKPIRQNKEKGURGTVCKPKPIVQGCEJKVGOKPVJG
EQPUKFGTCVKQPKUTGOGCUWTGFCVHCKTXCNWGCVGCEJTGRQTVKPIFCVG
ƂPCPEKCNUVCVGOGPVUJCXGDGGPRTGUGPVGFYKVJKPVJGTGURGEVKXG
CPFUWDUGSWGPVEJCPIGUKPVJGHCKTXCNWGQHVJGEQPVKPIGPV
PQVGUVQVJGƂPCPEKCNUVCVGOGPVU6JGUGUKIPKƂECPVCEEQWPVKPI
EQPUKFGTCVKQPCTGTGEQIPKUGFKPKPEQOGUVCVGOGPV
policies have been applied consistently to all periods presented
KPVJGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRWPNGUUQVJGTYKUG 3.1.2 Non-Controlling Interests (NCI)
KPFKECVGF6JGCEEQWPVKPIRQNKEKGUJCXGDGGPEQPUKUVGPVN[
applied by the Group entities where applicable and deviations 6JGFGVCKNUQHPQPEQPVTQNNKPIKPVGTGUVCTGIKXGPKP0QVGVQ
KHCP[JCXGDGGPFKUENQUGFCEEQTFKPIN[(WTVJGTVJGEJCPIGU VJGƂPCPEKCNUVCVGOGPVU
KPCEEQWPVKPIRQNKEKGUFWGVQCFQRVKQPQHPGYUVCPFCTFUCPF
3.1.3 Subsidiaries
KPVGTRTGVCVKQPUJCXGDGGPRTGUGPVGFKP0QVGVQVJGƂPCPEKCN
statements. 6JGFGVCKNUQHVJG$CPMoUUWDUKFKCTKGUJQYVJG[CTGCEEQWPVGFKP
VJGƂPCPEKCNUVCVGOGPVUQHVJG$CPMCPFVJGKTEQPVKPIGPEKGUCTG
3.1 Basis of Consolidation UGVQWVKP0QVGUCPFQPRCIGUCPFVQVJGƂPCPEKCN
6JG$CPMoUƂPCPEKCNUVCVGOGPVUEQORTKUGVJGCOCNICOCVKQPQH statements.
VJGƂPCPEKCNUVCVGOGPVUQHVJG&QOGUVKE$CPMKPI7PKV
&$7
CPFVJG(QTGKIP%WTTGPE[$CPMKPI7PKV
(%$76JG)TQWRoU 3.1.4 Joint Venture
ƂPCPEKCNUVCVGOGPVUEQORTKUGVJGEQPUQNKFCVKQPQHVJGƂPCPEKCN 6JGFGVCKNUQHLQKPVXGPVWTGVJGOGVJQFQHCEEQWPVKPIHQT
UVCVGOGPVUQHVJG$CPMKVUUWDUKFKCTKGUKPVGTOUQHVJG5TK.CPMC UCOGKPVJGƂPCPEKCNUVCVGOGPVUQHVJG$CPMVQIGVJGTYKVJ
#EEQWPVKPI5VCPFCTF5.(45QPp%QPUQNKFCVGF(KPCPEKCN UWOOCTK\GFƂPCPEKCNRQUKVKQPCPFVJG)TQWRoUUJCTGQH
5VCVGOGPVUqCPFVJGRTQRQTVKQPCVGUJCTGQHVJGRTQƂVQTNQUU EQPVKPIGPVNKCDKNKVKGUQHUWEJLQKPVXGPVWTGCTGUGVQWVKP0QVGU
CPFPGVCUUGVUQHKVULQKPVXGPVWTG
GSWKV[OGVJQFKPVGTOU CPFQPRCIGUCPFVQVJGƂPCPEKCNUVCVGOGPVU
QHVJG5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45QPp,QKPV
#TTCPIGOGPVUq 3.1.5 Loss of Control
9JGPVJG)TQWRNQUGUEQPVTQNQXGTCUWDUKFKCT[KVFGTGEQIPKUGU
3.1.1 Business Combinations and Goodwill
VJGCUUGVUCPFNKCDKNKVKGUQHVJGUWDUKFKCT[CPFCP[TGNCVGF
6JG)TQWRCEEQWPVUHQTDWUKPGUUEQODKPCVKQPUWUKPIVJG PQPEQPVTQNNKPIKPVGTGUVUCPFQVJGTEQORQPGPVUQHGSWKV[#P[
CESWKUKVKQPOGVJQFYJGPVJGCESWKTGFUGVQHCEVKXKVKGUCPF TGUWNVKPIICKPQTNQUUKUTGEQIPKUGFKPKPEQOGUVCVGOGPV#P[
CUUGVUOGGVUVJGFGƂPKVKQPQHCDWUKPGUUCPFEQPVTQNKU interest retained in the former subsidiary is measured at fair
transferred to the Group. XCNWGYJGPEQPVTQNKUNQUV5WDUGSWGPVN[KVKUCEEQWPVGFHQTCUCP
CUUQEKCVGQTKPCEEQTFCPEGYKVJVJG)TQWRoUCEEQWPVKPIRQNKE[
+PFGVGTOKPKPIYJGVJGTCRCTVKEWNCTUGVQHCEVKXKVKGUCPFCUUGVU HQTƂPCPEKCNKPUVTWOGPVU
KUCDWUKPGUUVJG)TQWRCUUGUUGUYJGVJGTVJGUGVQHCUUGVU
CPFCEVKXKVKGUCESWKTGFKPENWFGUCVCOKPKOWOCPKPRWVCPF 3.1.6 Transactions Eliminated on Consolidation
UWDUVCPVKXGRTQEGUUCPFYJGVJGTVJGCESWKTGFUGVJCUVJG
+PVTCITQWRDCNCPEGUVTCPUCEVKQPUCPFKPEQOGCPFGZRGPUGU
ability to produce outputs. The Group has an option to apply
CTKUKPIHTQOKPVTCITQWRVTCPUCEVKQPUCTGGNKOKPCVGFKPRTGRCTKPI
CnEQPEGPVTCVKQPVGUVoVJCVRGTOKVUCUKORNKƂGFCUUGUUOGPVQH
VJGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVU7PTGCNKUGFICKPUCTKUKPI
YJGVJGTCPCESWKTGFUGVQHCEVKXKVKGUCPFCUUGVUKUPQVCDWUKPGUU
HTQOVTCPUCEVKQPUYKVJGSWKV[CEEQWPVGFKPXGUVGGUCTGGNKOKPCVGF
The optional concentration test is met if substantially all of the
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statement.
r 6JGNKCDKNKVKGUEQPVCKPKPIQPGQTOQTGGODGFFGF
r +HVJGTGENCUUKƂECVKQPVCMGURNCEGQWVQHVJGHCKTXCNWGVJTQWIJ
FGTKXCVKXGUWPNGUUVJG[FQPQVUKIPKƂECPVN[OQFKH[VJGECUJ
RTQƂVQTNQUUECVGIQT[KPVQVJGCOQTVKUGFEQUVOGCUWTGOGPV
ƃQYUVJCVYQWNFQVJGTYKUGDGTGSWKTGFD[VJGEQPVTCEVQT
ECVGIQT[KVUHCKTXCNWGCVVJGTGENCUUKƂECVKQPFCVGDGEQOGU
it is clear with little or no analysis when a similar instrument
VJGPGYITQUUECTT[KPICOQWPV
KUƂTUVEQPUKFGTGFVJCVUGRCTCVKQPQHVJGGODGFFGF
FGTKXCVKXG
UKURTQJKDKVGF r +HVJGTGENCUUKƂECVKQPVCMGURNCEGQWVQHVJGCOQTVKUGFEQUV
OGCUWTGOGPVECVGIQT[CPFKPVQVJGHCKTXCNWGVJTQWIJQVJGT
%JCPIGUKPHCKTXCNWGCTGTGEQTFGFKPKPEQOGUVCVGOGPVYKVJVJG EQORTGJGPUKXGKPEQOGOGCUWTGOGPVECVGIQT[HCKTXCNWGKU
GZEGRVKQPQHOQXGOGPVUKPHCKTXCNWGQHNKCDKNKVKGUFGUKIPCVGF OGCUWTGFCVVJGTGENCUUKƂECVKQPFCVG#P[ICKPQTNQUUCTKUKPI
CV(862.FWGVQEJCPIGUKPVJG$CPMoUQYPETGFKVTKUM5WEJ from a difference between the previous amortised cost
EJCPIGUKPHCKTXCNWGCTGTGEQTFGFKPVJGQYPETGFKVTGUGTXG QHVJGƂPCPEKCNCUUGVCPFHCKTXCNWGKUTGEQIPKUGFKPQVJGT
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFFQPQVIGVTGE[ENGF comprehensive income. The effective interest rate and the
to the income statement. Interest earned or incurred on measurement of expected credit losses are not adjusted as a
KPUVTWOGPVUFGUKIPCVGFCV(862.KUCEETWGFKPKPVGTGUVKPEQOG TGUWNVQHVJGTGENCUUKƂECVKQP
QTKPVGTGUVGZRGPUGTGURGEVKXGN[WUKPIVJGGHHGEVKXGKPVGTGUV

+HVJGTGENCUUKƂECVKQPVCMGURNCEGQWVQHVJGHCKTXCNWGVJTQWIJ 6JG)TQWRJCUVTCPUHGTTGFVJGƂPCPEKCNCUUGVKHCPFQPN[KH
QVJGTEQORTGJGPUKXGKPEQOGOGCUWTGOGPVECVGIQT[VQ GKVJGT
COQTVKUGFEQUVOGCUWTGOGPVECVGIQT[VJGƂPCPEKCNCUUGV
r 6JG)TQWRJCUVTCPUHGTTGFKVUEQPVTCEVWCNTKIJVUVQTGEGKXG
KUTGENCUUKƂGFCVKVUHCKTXCNWGCVVJGTGENCUUKƂECVKQPFCVG
ECUJƃQYUHTQOVJGƂPCPEKCNCUUGV
*QYGXGTVJGEWOWNCVKXGICKPQTNQUURTGXKQWUN[TGEQIPKUGF
KPQVJGTEQORTGJGPUKXGKPEQOGKUTGOQXGFHTQOGSWKV[CPF or
CFLWUVGFCICKPUVVJGHCKTXCNWGQHVJGƂPCPEKCNCUUGVCVVJG
TGENCUUKƂECVKQPFCVG#UCTGUWNVVJGƂPCPEKCNCUUGVKUOGCUWTGF r +VTGVCKPUVJGTKIJVUVQVJGECUJƃQYUDWVJCUCUUWOGFCP
CVVJGTGENCUUKƂECVKQPFCVGCUKHKVJCFCNYC[UDGGPOGCUWTGFCV QDNKICVKQPVQRC[VJGTGEGKXGFECUJƃQYUKPHWNNYKVJQWV
amortised cost. The effective interest rate and the measurement OCVGTKCNFGNC[VQCVJKTFRCTV[WPFGTCnRCUUVJTQWIJo
of expected credit losses are not adjusted as a result of the CTTCPIGOGPV2CUUVJTQWIJCTTCPIGOGPVUCTGVTCPUCEVKQPU
TGENCUUKƂECVKQP YJGTGD[VJG)TQWRTGVCKPUVJGEQPVTCEVWCNTKIJVUVQTGEGKXG
VJGECUJƃQYUQHCƂPCPEKCNCUUGV
VJGnQTKIKPCNCUUGVoDWV
r 6JGFGVCKNUQHTGENCUUKƂECVKQPUECTTKGFQWVCTGFKUENQUGFKP CUUWOGUCEQPVTCEVWCNQDNKICVKQPVQRC[VJQUGECUJƃQYUVQ
0QVGVQVJGƂPCPEKCNUVCVGOGPVU QPGQTOQTGGPVKVKGU
VJGnGXGPVWCNTGEKRKGPVUoYJGPCNNQH
VJGHQNNQYKPIVJTGGEQPFKVKQPUCTGOGV
3.4.6 De-recognition of Financial Instruments
r 6JG)TQWRJCUPQQDNKICVKQPVQRC[COQWPVUVQVJGGXGPVWCN
Î°{°È>®iÀiV}Ì`ÕiÌÃÕLÃÌ>Ì>`wV>ÌvÌiÀÃ>` TGEKRKGPVUWPNGUUKVJCUEQNNGEVGFGSWKXCNGPVCOQWPVUHTQO
conditions VJGQTKIKPCNCUUGVGZENWFKPIUJQTVVGTOCFXCPEGUYKVJVJG
6JG)TQWRFGTGEQIPKUGUCƂPCPEKCNCUUGVUWEJCUCNQCP TKIJVVQHWNNTGEQXGT[QHVJGCOQWPVNGPVRNWUCEETWGFKPVGTGUV
VQCEWUVQOGTYJGPVJGVGTOUCPFEQPFKVKQPUJCXGDGGP CVOCTMGVTCVGU
TGPGIQVKCVGFVQVJGGZVGPVVJCVUWDUVCPVKCNN[KVDGEQOGUCPGY r 6JG)TQWRECPPQVUGNNQTRNGFIGVJGQTKIKPCNCUUGVQVJGT
NQCPYKVJVJGFKHHGTGPEGTGEQIPKUGFCUCFGTGEQIPKVKQPICKPQT than as security to the eventual recipients
NQUUVQVJGGZVGPVVJCVCPKORCKTOGPVNQUUJCUPQVCNTGCF[DGGP
TGEQTFGF6JGPGYN[TGEQIPKUGFNQCPUCTGENCUUKƂGFCU5VCIG r 6JG)TQWRJCUVQTGOKVCP[ECUJƃQYUKVEQNNGEVUQPDGJCNHQH
HQT'%.OGCUWTGOGPVRWTRQUGUWPNGUUVJGPGYNQCPKUFGGOGF the eventual recipients without material delay.
VQDGC2WTEJCUGFQT1TKIKPCVGF%TGFKV+ORCKTGF
21%+CUUGV +PCFFKVKQPVJG)TQWRKUPQVGPVKVNGFVQTGKPXGUVUWEJECUJ
ƃQYUGZEGRVHQTKPXGUVOGPVUKPECUJQTECUJGSWKXCNGPVU
9JGPCUUGUUKPIYJGVJGTQTPQVVQFGTGEQIPKUGCNQCPVQC
KPENWFKPIKPVGTGUVGCTPGFFWTKPIVJGRGTKQFDGVYGGPVJG
EWUVQOGTCOQPIUVQVJGTUVJG)TQWREQPUKFGTUVJGHQNNQYKPI
EQNNGEVKQPFCVGCPFVJGFCVGQHTGSWKTGFTGOKVVCPEGVQVJG
HCEVQTU
eventual recipients.
r %JCPIGKPEWTTGPE[QHVJGNQCP #VTCPUHGTQPN[SWCNKƂGUHQTFGTGEQIPKVKQPKHGKVJGT
r +PVTQFWEVKQPQHCPGSWKV[HGCVWTG r 6JG)TQWRJCUVTCPUHGTTGFUWDUVCPVKCNN[CNNVJGTKUMUCPF

rewards of the asset
r %JCPIGKPEQWPVGTRCTV[
or
r +HVJGOQFKƂECVKQPKUUWEJVJCVVJGKPUVTWOGPVYQWNFPQ
• The Group has neither transferred nor retained substantially
NQPIGTOGGVVJG522+ETKVGTKQP
CNNVJGTKUMUCPFTGYCTFUQHVJGCUUGVDWVJCUVTCPUHGTTGF
+HVJGOQFKƂECVKQPFQGUPQVTGUWNVKPECUJƃQYUVJCVCTG control of the asset
UWDUVCPVKCNN[FKHHGTGPVVJGOQFKƂECVKQPFQGUPQVTGUWNVKP
6JG)TQWREQPUKFGTUEQPVTQNVQDGVTCPUHGTTGFKHCPFQPN[KHVJG
FGTGEQIPKVKQP$CUGFQPVJGEJCPIGKPECUJƃQYUFKUEQWPVGF
transferee has the practical ability to sell the asset in its entirety
CVVJGQTKIKPCNGHHGEVKXGKPVGTGUVTCVGVJG)TQWRTGEQTFUC
to an unrelated third party and is able to exercise that ability
OQFKƂECVKQPICKPQTNQUUVQVJGGZVGPVVJCVCPKORCKTOGPVNQUU
WPKNCVGTCNN[CPFYKVJQWVKORQUKPICFFKVKQPCNTGUVTKEVKQPUQPVJG
has not already been recorded.
transfer.
Î°{°ÈL®iÀiV}ÌÌiÀÌ>vÀÃÕLÃÌ>Ì>`wV>Ì
9JGPVJG)TQWRJCUPGKVJGTVTCPUHGTTGFPQTTGVCKPGF
3.4.6 (b)(i) Financial assets UWDUVCPVKCNN[CNNVJGTKUMUCPFTGYCTFUCPFJCUTGVCKPGFEQPVTQN
#ƂPCPEKCNCUUGV
QTYJGTGCRRNKECDNGCRCTVQHCƂPCPEKCNCUUGV QHVJGCUUGVVJGCUUGVEQPVKPWGUVQDGTGEQIPKUGFQPN[VQVJG
QTRCTVQHCITQWRQHUKOKNCTƂPCPEKCNCUUGVUKUFGTGEQIPKUGF GZVGPVQHVJG)TQWRoUEQPVKPWKPIKPXQNXGOGPVKPYJKEJECUGVJG
YJGPVJGTKIJVUVQTGEGKXGECUJƃQYUHTQOVJGƂPCPEKCNCUUGV )TQWRCNUQTGEQIPKUGUCPCUUQEKCVGFNKCDKNKV[6JGVTCPUHGTTGF
JCXGGZRKTGF6JG$CPMCNUQFGTGEQIPKUGUVJGƂPCPEKCNCUUGVKHKV asset and the associated liability are measured on a basis that
JCUDQVJVTCPUHGTTGFVJGƂPCPEKCNCUUGVCPFVJGVTCPUHGTSWCNKƂGU TGƃGEVUVJGTKIJVUCPFQDNKICVKQPUVJCVVJG$CPMJCUTGVCKPGF
HQTFGTGEQIPKVKQP
%QPVKPWKPIKPXQNXGOGPVVJCVVCMGUVJGHQTOQHCIWCTCPVGGQXGT
VJGVTCPUHGTTGFCUUGVKUOGCUWTGFCVVJGNQYGTQHVJGQTKIKPCN
FINANCIAL REPORTS
ECTT[KPICOQWPVQHVJGCUUGVCPFVJGOCZKOWOCOQWPVQH CTGCNNQECVGFVQ%)7UQPCTGCUQPCDNGCPFEQPUKUVGPVDCUKUCPF
EQPUKFGTCVKQPVJG)TQWREQWNFDGTGSWKTGFVQRC[ VGUVGFHQTKORCKTOGPVCURCTVQHVJGVGUVKPIQHVJG%)7VQYJKEJ
the corporate asset is allocated.
+HEQPVKPWKPIKPXQNXGOGPVVCMGUVJGHQTOQHCYTKVVGPQT
RWTEJCUGFQRVKQP
QTDQVJQPVJGVTCPUHGTTGFCUUGVVJG +ORCKTOGPVNQUUGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPV
EQPVKPWKPIKPXQNXGOGPVKUOGCUWTGFCVVJGXCNWGVJG)TQWR CPFFKUENQUGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVGZEGRV
YQWNFDGTGSWKTGFVQRC[WRQPTGRWTEJCUG+PVJGECUGQHC HQTRTQRGTV[RTGXKQWUN[TGXCNWGFYJGTGVJGICKPQTNQUUQP
YTKVVGPRWVQRVKQPQPCPCUUGVVJCVKUOGCUWTGFCVHCKTXCNWGVJG TGXCNWCVKQPYCUVCMGPVQGSWKV[+PVJKUECUGVJGKORCKTOGPV
GZVGPVQHVJGGPVKV[oUEQPVKPWKPIKPXQNXGOGPVKUNKOKVGFVQVJG KUCNUQTGEQIPKUGFKPGSWKV[WRVQVJGGZVGPVQHCP[RTGXKQWUN[
lower of the fair value of the transferred asset and the option TGEQIPKUGFTGXCNWCVKQPICKPU+ORCKTOGPVNQUUGUTGEQIPKUGF
exercise price. KPTGURGEVQH%)7UCTGCNNQECVGFƂTUVVQTGFWEGVJGECTT[KPI
COQWPVQHCP[IQQFYKNNCNNQECVGFVQVJG%)7
ITQWRQH%)7U
3.4.6 (b)(ii) Financial liabilities CPFVJGPVQTGFWEGVJGECTT[KPICOQWPVQHVJGQVJGTCUUGVUKP
#ƂPCPEKCNNKCDKNKV[KUFGTGEQIPKUGFYJGPVJGQDNKICVKQPWPFGT VJG%)7
ITQWRQH%)7UQPCRTQTCVCDCUKU
VJGNKCDKNKV[KUFKUEJCTIGFECPEGNNGFQTGZRKTGU9JGTGCP
#PKORCKTOGPVNQUUKPTGURGEVQHIQQFYKNNKUPQVTGXGTUGF+P
GZKUVKPIƂPCPEKCNNKCDKNKV[KUTGRNCEGFD[CPQVJGTHTQOVJGUCOG
TGURGEVQHQVJGTCUUGVUKORCKTOGPVNQUUGUTGEQIPKUGFKPRTKQT
NGPFGTQPUWDUVCPVKCNN[FKHHGTGPVVGTOUQTVJGVGTOUQHCP
RGTKQFUCTGCUUGUUGFCVGCEJTGRQTVKPIFCVGHQTCP[KPFKECVKQPU
GZKUVKPINKCDKNKV[CTGUWDUVCPVKCNN[OQFKƂGFUWEJCPGZEJCPIGQT
VJCVVJGNQUUJCUFGETGCUGFQTPQNQPIGTGZKUVU#PKORCKTOGPV
OQFKƂECVKQPKUVTGCVGFCUCFGTGEQIPKVKQPQHVJGQTKIKPCNNKCDKNKV[
NQUUKUTGXGTUGFKHVJGTGJCUDGGPCEJCPIGKPVJGGUVKOCVGU
CPFVJGTGEQIPKVKQPQHCPGYNKCDKNKV[6JGFKHHGTGPEGDGVYGGP
used to determine the recoverable amount. An impairment
VJGECTT[KPIXCNWGQHVJGQTKIKPCNƂPCPEKCNNKCDKNKV[CPFVJG
NQUUKUTGXGTUGFQPN[VQVJGGZVGPVVJCVVJGCUUGVoUECTT[KPI
EQPUKFGTCVKQPRCKFKUTGEQIPKUGFKPKPEQOGUVCVGOGPV
COQWPVFQGUPQVGZEGGFVJGECTT[KPICOQWPVVJCVYQWNFJCXG
3.5 Impairment of Non-Financial Assets DGGPFGVGTOKPGFPGVQHFGRTGEKCVKQPQTCOQTVKUCVKQPKHPQ
KORCKTOGPVNQUUJCFDGGPTGEQIPKUGF
6JGECTT[KPICOQWPVUQHVJG)TQWRoUPQPƂPCPEKCNCUUGVUQVJGT
VJCPFGHGTTGFVCZCUUGVUCTGTGXKGYGFCVGCEJTGRQTVKPIFCVGVQ 3.6 Changes in Accounting Policies and Disclosures
determine whether there is any indication of impairment. If any
6JGTGYGTGPQEJCPIGUVQVJGUKIPKƂECPVCEEQWPVKPIRQNKEKGU
UWEJKPFKECVKQPGZKUVUQTYJGPCPPWCNKORCKTOGPVVGUVKPIHQTCP
CRRNKGFFWTKPIVJG[GCT
CUUGVKUTGSWKTGFVJG)TQWRGUVKOCVGUVJGCUUGVoUTGEQXGTCDNG
COQWPV(QTIQQFYKNNCPFKPVCPIKDNGCUUGVUVJCVJCXGKPFGƂPKVG 4. NEW AND AMENDED STANDARDS AND
WUGHWNNKXGUQTVJCVCTGPQV[GVCXCKNCDNGHQTWUGVJGTGEQXGTCDNG INTERPRETATIONS
amount is estimated each year at the same time. An impairment 6JGHQNNQYKPIPGYCEEQWPVKPIUVCPFCTFUCPFCOGPFOGPVU
NQUUKUTGEQIPKUGFKHVJGECTT[KPICOQWPVQHCPCUUGVQTKVU%CUJ KORTQXGOGPVUVQVJGGZKUVKPIUVCPFCTFUYGTGKUUWGFD[VJG
)GPGTCVKPI7PKV
%)7GZEGGFUKVUGUVKOCVGFTGEQXGTCDNG +PUVKVWVGQH%JCTVGTGF#EEQWPVCPVUQH5TK.CPMC
%#5TK.CPMC
amount. A number of new standards are effective for annual periods
DGIKPPKPICHVGTUV,CPWCT[CPFGCTNKGTCRRNKECVKQPKU
6JGTGEQXGTCDNGCOQWPVQHCPCUUGVQT%)7KUVJGITGCVGTQHKVU RGTOKVVGFJQYGXGTVJG)TQWRJCUPQVGCTN[CFQRVGFVJGPGYQT
XCNWGKPWUGCPFKVUHCKTXCNWGNGUUEQUVUVQUGNN+PCUUGUUKPIXCNWG COGPFGFUVCPFCTFUKPRTGRCTKPIVJGUGƂPCPEKCNUVCVGOGPVU
KPWUGVJGGUVKOCVGFHWVWTGECUJƃQYUCTGFKUEQWPVGFVQVJGKT
RTGUGPVXCNWGWUKPICRTGVCZFKUEQWPVTCVGVJCVTGƃGEVUEWTTGPV 4.1 Deferred Tax related to Assets and Liabilities arising from
OCTMGVCUUGUUOGPVUQHVJGVKOGXCNWGQHOQPG[CPFVJGTKUMU a Single Transaction (Amendments to Sri Lanka Accounting
URGEKƂEVQVJGCUUGVQT%)7 Standard LKAS 12 – “Income Taxes”)
6JGCOGPFOGPVUPCTTQYVJGUEQRGQHVJGKPKVKCNTGEQIPKVKQP
(QTVJGRWTRQUGQHKORCKTOGPVVGUVKPICUUGVUVJCVECPPQVDG
GZGORVKQPVQGZENWFGVTCPUCEVKQPUVJCVIKXGTKUGVQGSWCN
VGUVGFKPFKXKFWCNN[CTGITQWRGFVQIGVJGTKPVQVJGUOCNNGUVITQWR
CPFQHHUGVVKPIVGORQTCT[FKHHGTGPEGUsGINGCUGUCPF
QHCUUGVUVJCVIGPGTCVGECUJKPƃQYUHTQOEQPVKPWKPIWUGVJCVCTG
FGEQOOKUUKQPKPINKCDKNKVKGU6JGCOGPFOGPVUCRRN[HQTCPPWCN
NCTIGN[KPFGRGPFGPVQHVJGECUJKPƃQYUQHQVJGTCUUGVUQT%)7
TGRQTVKPIRGTKQFUDGIKPPKPIQPQTCHVGTUV,CPWCT[(QT
5WDLGEVVQCPQRGTCVKPIUGIOGPVEGKNKPIVGUVHQTVJGRWTRQUGUQH
NGCUGUCPFFGEQOOKUUKQPKPINKCDKNKVKGUVJGCUUQEKCVGFFGHGTTGF
IQQFYKNNKORCKTOGPVVGUVKPI%)7UVQYJKEJIQQFYKNNJCUDGGP
VCZCUUGVCPFNKCDKNKVKGUYKNNPGGFVQDGTGEQIPKUGFHTQOVJG
CNNQECVGFCTGCIITGICVGFUQVJCVVJGNGXGNCVYJKEJKORCKTOGPV
DGIKPPKPIQHVJGGCTNKGUVEQORCTCVKXGRGTKQFRTGUGPVGF
VGUVKPIKURGTHQTOGFTGƃGEVUVJGNQYGUVNGXGNCVYJKEJIQQFYKNNKU
YKVJCP[EWOWNCVKXGGHHGEVTGEQIPKUGFCUCPCFLWUVOGPVVQ
OQPKVQTGFHQTKPVGTPCNTGRQTVKPIRWTRQUGU)QQFYKNNCESWKTGFKP
TGVCKPGFGCTPKPIUQTQVJGTEQORQPGPVUQHGSWKV[CVVJCVFCVG
CDWUKPGUUEQODKPCVKQPKUCNNQECVGFVQITQWRUQH%)7UVJCVCTG
(QTCNNQVJGTV[RGUQHVTCPUCEVKQPUVJGCOGPFOGPVUCRRN[VQ
GZRGEVGFVQDGPGƂVHTQOVJGU[PGTIKGUQHVJGEQODKPCVKQP
VTCPUCEVKQPUVJCVQEEWTCHVGTVJGDGIKPPKPIQHVJGGCTNKGUVRGTKQF
6JG)TQWRoUEQTRQTCVGCUUGVUFQPQVIGPGTCVGUGRCTCVGECUJ RTGUGPVGF6JGTGYKNNDGPQKORCEVQPTGVCKPGFGCTPKPIUQP
KPƃQYUCPFCTGWVKNKUGFD[OQTGVJCPQPG%)7%QTRQTCVGCUUGVU adoption of the amendments.

4.2 Sri Lanka Accounting Standard - SLFRS 17 “Insurance 5KPEG*0$#UUWTCPEG2.%CPF*0$)GPGTCN+PUWTCPEG.KOKVGF
Contracts” effective from 1st January 2025 - Applicable for CTGRTGFQOKPCPVN[EQPPGEVGFYKVJ+PUWTCPEGCEVKXKVKGUJCXKPI
Subsidiary, HNB Assurance PLC (HNBA) and HNB General EQPUKFGTKPIVJGCDQXGETKVGTKCDQVJVJGEQORCPKGUOC[
Insurance Ltd (HNBG) EQPVKPWGVQCRRN[.-#5TCVJGTVJCP5.(45HQTCPPWCN
5.(45TGSWKTGUNKCDKNKVKGUHQTKPUWTCPEGEQPVTCEVUVQ RGTKQFUDGIKPPKPIDGHQTGUV,CPWCT[
DGTGEQIPKUGFCUVJGRTGUGPVXCNWGQHHWVWTGECUJƃQYU
*QYGXGTVJGƂPCPEKCNUVCVGOGPVUQH*0$#UUWTCPEG2.%
KPEQTRQTCVKPICPGZRNKEKVTKUMCFLWUVOGPVYJKEJKUWRFCVGF
JCUDGGPRTGRCTGFKPNKPGYKVJ5.(45YJGPRTGRCTKPIVJG
CVGCEJTGRQTVKPIFCVGVQTGƃGEVEWTTGPVEQPFKVKQPUCPFC
EQPUQNKFCVGFƂPCPEKCNUVCVGOGPVU
%QPVTCEVWCN5GTXKEG/CTIKP
%5/VJCVKUGSWCNCPFQRRQUKVG
VQCP[p&C[qICKPCTKUKPIQPKPKVKCNTGEQIPKVKQP.QUUGU 4.4 Other New Accounting Pronouncements
CTGTGEQIPKUGFFKTGEVN[KPVQVJGKPEQOGUVCVGOGPV(QT
6JGHQNNQYKPIPGYCPFCOGPFGFUVCPFCTFUCTGPQVGZRGEVGFVQ
OGCUWTGOGPVRWTRQUGUEQPVTCEVUCTGITQWRGFVQIGVJGTKPVQ
JCXGCUKIPKƂECPVKORCEVQPVJG)TQWRoUEQPUQNKFCVGFƂPCPEKCN
EQPVTCEVUQHUKOKNCTTKUMRTQƂVCDKNKV[RTQƂNGCPFKUUWG[GCTYKVJ
statements.
HWTVJGTFKXKUKQPUHQTEQPVTCEVUVJCVCTGOCPCIGFUGRCTCVGN[
5.(45KPVTQFWEGUCPGYOGCUWTGQHKPUWTCPEGTGXGPWGDCUGF r %NCUUKHKECVKQPQHNKCDKNKVKGUCUEWTTGPVQTPQPEWTTGPV
QPVJGFGNKXGT[QHUGTXKEGUVQRQNKE[JQNFGTUCPFGZENWFKPICP[
#OGPFOGPVUVQ.-#5GHHGEVKXGHQTCPPWCNRGTKQFU
RTGOKWOUTGNCVGFVQVJGKPXGUVOGPVGNGOGPVUQHRQNKEKGUYJKEJ DGIKPPKPIQPQTCHVGTUV,CPWCT[
YKNNDGUKIPKƂECPVN[FKHHGTGPVHTQOGZKUVKPIRTGOKWOTGXGPWG
r &KUENQUWTGQHCEEQWPVKPIRQNKEKGU
#OGPFOGPVUVQ.-#5
OGCUWTGUEWTTGPVN[TGRQTVGFKPVJGKPEQOGUVCVGOGPV+PQTFGT
CPF5.(452TCEVKEG5VCVGOGPVGHHGEVKXGHQTCPPWCN
VQVTCPUKVKQPVQ5.(45VJGCOQWPVQHFGHGTTGFRTQƂVDGKPI
RGTKQFUDGIKPPKPIQPQTCHVGTUV,CPWCT[
VJG%5/CVVTCPUKVKQPFCVGPGGFUVQDGFGVGTOKPGF
5.(45KUGZRGEVGFVQJCXGCUKIPKƂECPVKORCEVQP*0$#CPF r &GHKPKVKQPQHCEEQWPVKPIGUVKOCVGU
#OGPFOGPVUVQ.-#5
*0$)CUVJGTGSWKTGOGPVUQHVJGPGYUVCPFCTFCTGEQORNGZ GHHGEVKXGHQTCPPWCNRGTKQFUDGIKPPKPIQPQTCHVGTUV
CPFTGSWKTGUCHWPFCOGPVCNEJCPIGVQCEEQWPVKPIHQTKPUWTCPEG ,CPWCT[
EQPVTCEVUCUYGNNCUVJGCRRNKECVKQPQHUKIPKƂECPVLWFIGOGPVCPF r .GCUGNKCDKNKV[KPCUCNGCPFNGCUGFDCEM
#OGPFOGPVVQ
PGYGUVKOCVKQPVGEJPKSWGU*0$#CPF*0$)JCXGCUUGUUOGPV 5.(45GHHGEVKXGHQTCPPWCNRGTKQFUDGIKPPKPIQPQT
CPFCPKORNGOGPVCVKQPRTQITCOOGWPFGTYC[VQKORNGOGPV CHVGTUV,CPWCT[
5.(45CPF5.(45
.
4.3 Sri Lanka Accounting Standard - SLFRS 9 “Financial
Instruments”
6GORQTCT['ZGORVKQPHTQO5.(45HQT5WDUKFKCT[*0$
#UUWTCPEG2.%
5.(45CFFTGUUGUVJGCEEQWPVKPIHQTƂPCPEKCNKPUVTWOGPVUCPF
KUGHHGEVKXGHQTCPPWCNRGTKQFUDGIKPPKPIQPQTCHVGTUV,CPWCT[
*QYGXGTHQTCPKPUWTGTVJCVOGGVUVJGETKVGTKCKPRCTCITCRJ
$QH5.(45KVRTQXKFGUCVGORQTCT[GZGORVKQPVJCVRGTOKVU
DWVFQGUPQVTGSWKTGVJGKPUWTGTVQCRRN[.-#5TCVJGTVJCP
5.(45HQTCPPWCNRGTKQFUDGIKPPKPIDGHQTGUV,CPWCT[
#PKPUWTGTOC[CRRN[VJGVGORQTCT[GZGORVKQPHTQO5.(45KH
CPFQPN[KH

C KVJCUPQVRTGXKQWUN[CRRNKGFCP[XGTUKQPQH5.(45QVJGT
VJCPQPN[VJGTGSWKTGOGPVUHQTVJGRTGUGPVCVKQPQHICKPUCPF
NQUUGUQPƂPCPEKCNNKCDKNKVKGUFGUKIPCVGFCVHCKTXCNWGVJTQWIJ
RTQƂVQTNQUUKPRCTCITCRJU
EsCPF
$s$QH5.(45CPF

DKVUCEVKXKVKGUCTGRTGFQOKPCPVN[EQPPGEVGFYKVJKPUWTCPEG
CUFGUETKDGFKPRCTCITCRJ&CVKVUCPPWCNTGRQTVKPIFCVG
VJCVKOOGFKCVGN[RTGEGFGUUV#RTKNQTCVCUWDUGSWGPV
CPPWCNTGRQTVKPIFCVGCUURGEKƂGFKPRCTCITCRJ)QH
5.(45
FINANCIAL REPORTS
5 FINANCIAL RISK MANAGEMENT

6JKUPQVGRTGUGPVUKPHQTOCVKQPCDQWVVJG$CPM)TQWRGZRQUWTGVQƂPCPEKCNTKUMUCPFVJG$CPM)TQWRoUOCPCIGOGPVQHECRKVCN
5.1 Introduction and Overview

$CPM)TQWRJCUGZRQUWTGVQVJGHQNNQYKPIMG[TKUMUHTQOƂPCPEKCNKPUVTWOGPVU
ETGFKVTKUM
NKSWKFKV[TKUM
OCTMGVTKUMCPF
QRGTCVKQPCNTKUMU
6JGHQNNQYKPIEJCTVRTQXKFGUCNKPMDGVYGGPVJG$CPM)TQWRoUDWUKPGUUWPKVUCPFVJGRTKPEKRCNTKUMUVJCVVJG[CTGGZRQUGFVQ6JGUKIPKƂECPEG
QHTKUMKUCUUGUUGFYKVJKPVJGEQPVGZVQHVJG$CPM)TQWRCUCYJQNGCPFKUOGCUWTGFDCUGFQPCNNQECVKQPQHVJGTGIWNCVQT[ECRKVCNYKVJKPVJG
$CPM)TQWR
HATTON NATIONAL BANK PLC
CORPORATE SME RETAIL MICRO TREASURY
Credit Risk Credit Risk Credit Risk Credit Risk Market Risk
Operational Risk Operational Risk Operational Risk Operational Risk Liquidity Risk
Market Risk Market Risk Market Risk Market Risk Credit Risk
Operational Risk
High Medium Low
6JKUPQVGRTGUGPVUKPHQTOCVKQPCDQWVVJG$CPM)TQWRoUGZRQUWTGVQGCEJQHVJGCDQXGTKUMUVJGQDLGEVKXGURQNKEKGUCPFRTQEGUUGUHQTOGCUWTKPICPF
OCPCIKPIUWEJTKUMU
5.2 Risk Management Framework

6JG$QCTFQH&KTGEVQTUJCUQXGTCNNTGURQPUKDKNKV[HQTVJG 'ZGEWVKXGOCPCIGOGPVEQOOKVVGGUGCEJYKVJURGEKCNKUGF
GUVCDNKUJOGPVCPFQXGTUKIJVQHVJG$CPMoUTKUMOCPCIGOGPV HQEWUJCXGDGGPGUVCDNKUJGFVQUWRRQTVVJG$+4/%CPFCTG
HTCOGYQTM6JG$QCTFFKUEJCTIGUKVUIQXGTPCPEGTGURQPUKDKNKV[ TGURQPUKDNGHQTVJGEQQTFKPCVKQPQHTKUMOCVVGTUHQTGCEJQH
VJTQWIJUGXGPDQCTFUWDEQOOKVVGGUYKVJQXGTUKIJV VJGCTGCURGTVCKPKPIVQTKUMOCPCIGOGPV6JQUGCTG'ZGEWVKXG
TGURQPUKDKNKV[HQTTKUMOCPCIGOGPVXK\$QCTF+PVGITCVGF4KUM 4KUM/CPCIGOGPVCPF%TGFKV2QNKE[%QOOKVVGG
'4/%2
/CPCIGOGPV%QOOKVVGG
$+4/%$QCTF#WFKV%QOOKVVGG 1RGTCVKQPCN4KUM5VGGTKPI%QOOKVVGG#UUGVCPF.KCDKNKV[

$#%$QCTF%TGFKV%QOOKVVGG
$%%$QCTF5VTCVGIKECPF %QOOKVVGGCPF+PHQTOCVKQP5GEWTKV[5VGGTKPI%QOOKVVGG
+PXGUVOGPV4GXKGY%QOOKVVGG
$5+4%$QCTF&KIKVCN$CPMKPI
%QOOKVVGG
$&$%$QCTF2TQEWTGOGPVCPF#UUGV&KURQUCN 6JG$#%RTQXKFGUKVUCUUGUUOGPVQPVJGGHHGEVKXGPGUUQHKPVGTPCN
%QOOKVVGGCPF$QCTF4GEQXGTKGU%QOOKVVGG
$4% CWFKVCPFGZVGTPCNFKUENQUWTGQHCEEQWPVKPIRQNKEKGUCPFƂPCPEKCN
TGRQTVKPIVQVJG$QCTF+PVGTPCN#WFKV&GRCTVOGPVWPFGTVCMGU
6JG$+4/%RTQXKFGUVJG$QCTFVJGCUUWTCPEGVJCVTKUM DQVJTGIWNCTCPFCFJQETGXKGYUQHTKUMOCPCIGOGPVEQPVTQNU
OCPCIGOGPVUVTCVGIKGURQNKEKGUCPFRTQEGUUGUCTGKPRNCEG CPFRTQEGFWTGUVJGTGUWNVUQHYJKEJCTGTGRQTVGFVQVJG$#%
VQOCPCIGGXGPVUQWVEQOGUVJCVJCXGVJGRQVGPVKCNVQKORCEV
UKIPKƂECPVN[QPGCTPKPIURGTHQTOCPEGTGRWVCVKQPCPFECRKVCN 4KUMOCPCIGOGPVRQNKEKGUCPFU[UVGOUCTGTGXKGYGFTGIWNCTN[
6JGCRRTQCEJGPVCKNUCEVKXGOQPKVQTKPIQHVJGNGXGNQHTKUM VQTGƃGEVEJCPIGUKPOCTMGVEQPFKVKQPURTQFWEVUCPFUGTXKEGU
GZRQUWTGCICKPUVVJGRCTCOGVGTUUGVKPVJGTKUMCRRGVKVGCPF offered.
TKUMIQCNU6JG$%%CPF$4%CNUQCUUKUVUVJG$QCTFD[CUUGUUKPI
UKIPKƂECPVETGFKVCPFQVJGTVTCPUCEVKQPUDG[QPFVJGFKUETGVKQPQH
GZGEWVKXGOCPCIGOGPV

2CIG
KPENWFKPIUVCPFD[NGVVGTUQHETGFKVEQOOKVVJG$CPMVQOCMG
Reference RC[OGPVUQPDGJCNHQHEWUVQOGTUKPVJGGXGPVQHCURGEKƂE
CEVIGPGTCNN[TGNCVGFVQVJGKORQTVQTGZRQTVQHIQQFU5WEJ
5.3 Credit Risk EQOOKVOGPVUGZRQUGVJG$CPMVQTKUMUUKOKNCTVQNQCPUCPFCTG
5.3.1 5GVVNGOGPVTKUM OKVKICVGFD[VJGUCOGEQPVTQNRTQEGUUGUCPFRQNKEKGU
5.3.2 /CPCIGOGPVQHETGFKVTKUM (QTTKUMOCPCIGOGPVTGRQTVKPIRWTRQUGUVJG$CPMEQPUKFGTU
5.3.3 %TGFKVSWCNKV[CPCN[UKU CPFEQPUQNKFCVGUCNNGNGOGPVUQHETGFKVTKUMGZRQUWTG
UWEJCU
5.3.4 Credit exposure and expected credit loss 271 KPFKXKFWCNQDNKIQTFGHCWNVTKUMKPFWUVT[TKUMCPFIGQITCRJKECN

'%.RTQXKUKQPOQXGOGPVs5VCIGYKUG TKUMGVE6JGOGVJQFQNQI[CFQRVGFD[VJG$CPMKPFGVGTOKPKPI
VJGGZRGEVGFETGFKVNQUUGUKUFGVCKNGFKP0QVGVQVJGƂPCPEKCN
5.3.5 Collateral held and other credit 277
statements.
enhancements
%QPEGPVTCVKQPUQHETGFKVTKUM 278 Consideration of current economic conditions on credit risk
5.3.7 1HHUGVVKPIƂPCPEKCNCUUGVUCPFƂPCPEKCN 282 $CPMEQPVKPWGFVQEQPFWEVKPFGRVJCPCN[UKUQPVJGKPFWUVTKGU
liabilities YJKEJJCUDGGPCHHGEVGFCPFVJGUECNGQHKORCEVQP$CPMoU
NGPFKPIRQTVHQNKQVJTQWIJXCTKQWUUVTGUUVGUVKPIVGEJPKSWGU
5.3.8 .QCPVQXCNWGTCVKQ 282
KPENWFKPIUVCIGUJKHVCUUGUUOGPVQHGNGXCVGFTKUMKPFWUVTKGU
7PEGTVCKPVKGUTGNCVKPIVQVJGGEQPQOKEEQPFKVKQPUKP5TK.CPMC
5.4 Liquidity risk UVTGUUGFVJGKORQTVCPEGQHFKXGTUKƂECVKQPQHVJG$CPMoUNQCP
5.4.1 /CPCIGOGPVQHNKSWKFKV[TKUM 282 DQQMCETQUUCYKFGTCPIGQHKPFWUVTKGUYJKEJKPVWTPYQWNF
GPUWTGVJGTGUKNKGPEGQHVJG$CPMKPVJGGEQPQOKEGPXKTQPOGPV
5.4.2 'ZRQUWTGVQNKSWKFKV[TKUM 283
QHVJKUPCVWTG6JG$CPMKUEQOHQTVCDNGYKVJVJGGZKUVKPI
5.4.3 #PCN[UKUQHƂPCPEKCNCUUGVUCPFƂPCPEKCN 284 EQORQUKVKQPQHKVUNQCPDQQMCPFEQPVKPWQWUOQPKVQTKPI
NKCDKNKVKGUD[TGOCKPKPIEQPVTCEVWCN CEVKXKVKGUCTGDGKPIECTTKGFQWVVQCXQKFCEEWOWNCVKQPQH
maturities GZRQUWTGUVQTKUM[GEQPQOKEUGIOGPVU
5.4.4 .KSWKFKV[TGUGTXGU
5.3.1 Settlement Risk
5.4.5 Financial assets available to support future 287
HWPFKPI 6JGDCPMoUCEVKXKVKGUOC[IKXGTKUGVQTKUMCVVJGVKOGQH
UGVVNGOGPVQHVTCPUCEVKQPUCPFVTCFGUp5GVVNGOGPVTKUMqKUVJG
TKUMQHNQUUFWGVQVJGHCKNWTGQHCEWUVQOGTQTCEQWPVGTRCTV[VQ
5.5 Market risk
JQPQWTKVUQDNKICVKQPUVQFGNKXGTECUJUGEWTKVKGUQTQVJGTCUUGVU
5.5.1 /CPCIGOGPVQHOCTMGVTKUM 288 CUEQPVTCEVWCNN[CITGGF
5.5.2 'ZRQUWTGVQGSWKV[RTKEGTKUM 289
5.3.2 Management of Credit Risk
5.5.3 'ZRQUWTGVQKPVGTGUVTCVGTKUM0QPVTCFKPI 290
portfolios $QCTF%TGFKV%QOOKVVGGJCUQXGTUKIJVTGURQPUKDKNKV[HQTVJG
OCPCIGOGPVQHETGFKV4KUM/CPCIGOGPV&KXKUKQP
4/&KUC
5.5.4 'ZRQUWTGVQEWTTGPE[TKUMU0QPVTCFKPI 292
UGRCTCVGXGTVKECNKPFGRGPFGPVQHDWUKPGUUWPKVUGUVCDNKUJGF
portfolios
VQCUUGUUVJGETGFKVTKUMQHETGFKVRTQRQUCNUCPFUWDOKV
KPFGRGPFGPVQDUGTXCVKQPUVQCNNCRRTQXKPICWVJQTKVKGU
5.6 Operational Risk 292
1VJGTTGURQPUKDKNKVKGUQH4/&CTGCUHQNNQYU
r (QTOWNCVKPIETGFKVRQNKEKGUCPFIWKFGNKPGUKPEQPUWNVCVKQP
5.7 Capital Management
YKVJDWUKPGUUWPKVUEQXGTKPIEQNNCVGTCNTGSWKTGOGPVUETGFKV
5.7.1 4GIWNCVQT[ECRKVCN 294 CUUGUUOGPVTKUMITCFKPICPFTGRQTVKPIFQEWOGPVCT[CPF
5.7.2 Capital allocation 295 NGICNRTQEGFWTGUCPFEQORNKCPEGYKVJTGIWNCVQT[CPF
UVCVWVQT[TGSWKTGOGPVU
5.3 Credit Risk
%TGFKVTKUMKUVJGTKUMQHƂPCPEKCNNQUUVQVJG$CPMKHCEWUVQOGT r (QTOCNK\GCRRTQXCNQHUWEJRQNKEKGUCPFIWKFGNKPGUHTQOVJG
QTCEQWPVGTRCTV[VQCƂPCPEKCNKPUVTWOGPVHCKNUVQOGGVKVU $QCTFQH&KTGEVQTUWRQPENGCTCPEGD[TGNGXCPV$QCTF5WD
EQPVTCEVWCNQDNKICVKQPUCPFCTKUGURTKPEKRCNN[HTQOVJG$CPMoU committees.
loans and advances to customers and investments in debt
r 'UVCDNKUJKPIVJGETGFKVCRRTQXCNUVTWEVWTGYKVJFGNGICVGF
securities.
authority limits for the approval and renewal of credit
+PCFFKVKQPVQNQCPUVJG$CPMOCMGUCXCKNCDNGVQKVUEWUVQOGTU HCEKNKVKGU6JGFGNGICVGFCWVJQTKV[NKOKVUCTGCUUKIPGFVQ
IWCTCPVGGUYJKEJOC[TGSWKTGVJCVVJG$CPMOCMGURC[OGPVUQP KFGPVKƂGFKPFKXKFWCNU.CTIGTETGFKVHCEKNKVKGUTGSWKTGCRRTQXCN
their behalf and enters into commitments to extend credit lines D[VJG$QCTF%TGFKV%QOOKVVGGQTVJG$QCTFQH&KTGEVQTUCU
VQUGEWTGVJGKTNKSWKFKV[PGGFU.GVVGTUQHETGFKVCPFIWCTCPVGGU appropriate.
FINANCIAL REPORTS
r 4GXKGYKPICPFCUUGUUKPIETGFKVTKUMETGFKVTKUMWPKVQH4/& 6JG$CPMCNUQQDVCKPUIWCTCPVGGUHTQORCTGPVEQORCPKGUHQT
CUUGUUGUCNNETGFKVGZRQUWTGUKPGZEGUUQHFGUKIPCVGFNKOKVU loans to their subsidiaries.
before facilities are approved. Renewals of facilities are
subject to the same review process. /CPCIGOGPVOQPKVQTUVJGOCTMGVXCNWGQHEQNNCVGTCNCPFYKNN
TGSWGUVCFFKVKQPCNEQNNCVGTCNKPCEEQTFCPEGYKVJVJGWPFGTN[KPI
r 5GVVKPIVJGTKUMCRRGVKVGHQTGZRQUWTGUVQEQWPVGTRCTVKGU CITGGOGPV
IGQITCRJKGUCPFKPFWUVTKGU
HQTNQCPUCPFCFXCPEGUƂPCPEKCN
IWCTCPVGGUCPFUKOKNCTGZRQUWTGUCPFD[KUUWGTETGFKV 6JG$CPMoURQNKE[KUVQRWTUWGVKOGN[TGCNKUCVKQPQHVJGEQNNCVGTCN
TCVKPIDCPFOCTMGVNKSWKFKV[CPFEQWPVT[
HQTKPXGUVOGPV in an orderly manner. The proceeds are used to reduce or repay
UGEWTKVKGU VJGQWVUVCPFKPIENCKO6JG$CPMIGPGTCNN[FQGUPQVWUGPQP
cash collateral for its own operations.
r 2TQXKFKPICFXKEGIWKFCPEGCPFURGEKCNKUVUMKNNUVQDWUKPGUU
WPKVUVQRTQOQVGDGUVRTCEVKEGVJTQWIJQWVVJG$CPMKPVJG
OCPCIGOGPVQHETGFKVTKUM
r +FGPVKƂECVKQPQHGNGXCVGFTKUMKPFWUVTKGUCPFVJGCFGSWCE[
QHCP[QXGTNC[CFLWUVOGPVOCFGQWVUKFGVJG'%.OQFGN
as part of model adjustments to address the potential
KORNKECVKQPUQHVJGRTGXCKNKPIGEQPQOKEEQPFKVKQPU
'CEJDWUKPGUUWPKVKUTGSWKTGFVQKORNGOGPV$CPMoUETGFKV
RQNKEKGUCPFIWKFGNKPGUYKVJETGFKVCRRTQXCNCWVJQTKVKGU
FGNGICVGFHTQOVJG$QCTFQH&KTGEVQTU'CEJDWUKPGUUWPKVKU
TGURQPUKDNGHQTVJGSWCNKV[CPFRGTHQTOCPEGQHKVUETGFKVRQTVHQNKQ
CPFHQTOQPKVQTKPICPFEQPVTQNNKPICNNETGFKVTKUMUKPKVURQTVHQNKQU
4GIWNCTCWFKVUQHDWUKPGUUWPKVUCPFETGFKVRTQEGUUGUCTG
WPFGTVCMGPD[+PVGTPCN#WFKV&KXKUKQP
5.3.3 Credit Quality Analysis

5.3.3 (a) Collateral and other credit enhancements
6JGCOQWPVCPFV[RGQHEQNNCVGTCNTGSWKTGFFGRGPFUQPCP
CUUGUUOGPVQHVJGETGFKVTKUMQHVJGEQWPVGTRCTV[)WKFGNKPGUCTG
KPRNCEGEQXGTKPIVJGCEEGRVCDKNKV[CPFXCNWCVKQPQHGCEJV[RGQH
collateral.
6JGIGPGTCNETGFKVYQTVJKPGUUQHEWUVQOGTUVGPFUVQDGVJGOQUV
TGNGXCPVKPFKECVQTQHETGFKVSWCNKV[QHCNQCP*QYGXGTEQNNCVGTCN
RTQXKFGUCFFKVKQPCNUGEWTKV[CPFVJG$CPMIGPGTCNN[TGSWGUVU
NCTIGDQTTQYGTUVQRTQXKFGUCOG6JG$CPMOC[VCMGEQNNCVGTCN
KPVJGHQTOQHCƂTUVEJCTIGQXGTTGCNGUVCVGCPFTGUKFGPVKCN
RTQRGTVKGUƃQCVKPIEJCTIGUQXGTCNNEQTRQTCVGCUUGVUCPFQVJGT
NKGPUCPFIWCTCPVGGU
6JGOCKPV[RGUQHEQNNCVGTCNQDVCKPGFCTGCUHQNNQYU
r (QTUGEWTKVKGUNGPFKPICPFTGXGTUGTGRWTEJCUGVTCPUCEVKQPU
cash or securities
r (QTEQTRQTCVGCPFUOCNNDWUKPGUUNGPFKPIEJCTIGUQXGTTGCN
GUVCVGRTQRGTVKGUKPXGPVQT[CPFVTCFGTGEGKXCDNGUCPFKP
URGEKCNEKTEWOUVCPEGUIQXGTPOGPVIWCTCPVGGU
r (QTTGVCKNNGPFKPIOQTVICIGUQXGTTGUKFGPVKCNRTQRGTVKGU

5.3.3 (b) Maximum exposure to credit risk
6JGHQNNQYKPIVCDNGUJQYUVJGOCZKOWOGZRQUWTGVQETGFKVTKUMCPFPGVGZRQUWTGVQETGFKVTKUMD[ENCUUQHƂPCPEKCNCUUGVU
$CPM
As at 31st December 2022 2021
Maximum Net exposure Maximum Net exposure
exposure to to credit risk exposure to to credit risk
credit risk credit risk
Rs 000 Rs 000 Rs 000 Rs 000
$CNCPEGUYKVJDCPMU 41,167,892 7,316,562
2NCEGOGPVUYKVJDCPMU 54,383,166 -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 927,487
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 111,617 103,365
NQCPUCPFCFXCPEGUVQEWUVQOGTU
ITQUU 1,061,371,654 928,971,730
FGDVCPFQVJGTKPUVTWOGPVU 525,252,301 172,020,526
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 2,706,660 203,426,433
1VJGTƂPCPEKCNCUUGVU 9,227,790 6,123,181
1,699,591,581 1,318,889,284
)WCTCPVGGUNGVVGTUQHETGFKVCPFCEEGRVCPEGU 137,337,700 155,679,119
Group
Maximum Net exposure Maximum Net exposure
exposure to to credit risk exposure to to credit risk
credit risk credit risk
Rs 000 Rs 000 Rs 000 Rs 000
4GXGTUGTGRWTEJCUGCITGGOGPV 1,380,579 6,246,276
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 927,487
ITQUU 1,107,500,061 968,907,254
FGDVCPFQVJGTKPUVTWOGPVU 557,021,541 184,047,138
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 6,062,195 210,804,487
1VJGTƂPCPEKCNCUUGVU 12,041,606 8,034,880
1,789,094,742 1,393,518,349
)WCTCPVGGUNGVVGTUQHETGFKVCPFCEEGRVCPEGU 137,337,700 155,679,119
FINANCIAL REPORTS
5 FINANCIAL RISK MANAGEMENT (Contd.)

5.3.3 (c) Maximum exposure to credit risk by risk rating
6JGHQNNQYKPIVCDNGUGVUQWVKPHQTOCVKQPCDQWVVJGETGFKVSWCNKV[QHƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVOGCUWTGFCVHCKTXCNWGVJTQWIJ
RTQƂVQTNQUUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFEQPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU
Bank b+LJK*UDGH b6WDQGDUG*UDGH b6XE6WDQGDUG*UDGH

b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV
not subject not subject not subject
WR(&/b WR(&/b WR(&/b
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
As at 31st December 2022

Financial Assets
%CUJCPFECUJGSWKXCNGPVU 10,731,515 - - 41,303,705 24,388,012 - - - 10,130 - - -
2NCEGOGPVUYKVJDCPMU 54,383,166 - - - - - - - - - - -
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - - - 32,344,341 - - - - - - - -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU - - - 12,180 - - - 3,259 - - - -
Financial assets measured at
HCKTXCNWGVJTQWIJRTQƂVQTNQUU 496 - - 34,910 - - - 1,543 - - - -
ITQUU 50,988,828 3,325,909 606,179 - 197,638,685 22,296,731 8,352,091 - 99,478,905 36,943,222 17,479,979 -
debt and other instruments 278,149,988 - - - - 241,750,564 - 3,131,700 - - 123,417 -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJ
other comprehensive income - - - - - - - 2,134,875 - - - -
1VJGTƂPCPEKCNCUUGVU - - - - - - - - - - - -
394,253,993 3,325,909 606,179 73,695,136 222,026,697 264,047,295 8,352,091 5,271,377 99,489,035 36,943,222 17,603,396 -
Off balance sheet exposures
%QPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU 63,293,315 599,309 26,142 - 195,202,733 3,787,394 210,878 - 80,253,166 5,584,037 1,505,648 -

Financial Assets
%CUJCPFECUJGSWKXCNGPVU
2NCEGOGPVUYKVJDCPMU
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU
HCKTXCNWGVJTQWIJRTQƂVQTNQUU
ITQUU
debt and other instruments
Financial assets measured at fair value
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
1VJGTƂPCPEKCNCUUGVU

Off balance sheet exposures
%QPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU
%CVGIQTKUCVKQPDCUGFQP$CPMoUKPVGTPCNTKUMTCVKPI#EEQTFKPIN[###VQ##EQPUKFGTGFCUp*KIJITCFGq# VQ$$$CUp5VCPFCTFITCFGq$$ VQ$CUp5WD5VCPFCTFITCFGq%%% CPFDGNQYCUp.QYITCFGq

/RZ*UDGH b8QUDWHGb b([SRVXUHVQRW6XEMHFWWR5DWLQJ
b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b7RWDO Note
not subject not subject not subject
WR(&/b WR(&/b WR(&/b
4,008,531 - - - - - - - - - - - 80,441,893 25
- - - - - - - - - - - - 54,383,166 26
- - - - - - - - - - - - 32,344,341 27
- - - - - - - 5,355,062 - - - - 5,370,501 29
- - - - - - - 74,668 - - - - 111,617 30
19,337,181 14,778,441 25,557,280 - 339,979,474 90,475,928 49,667,730 - 83,167,162 636,116 661,812 - 1,061,371,654 31
- - - 538,332 - - - 1,558,300 - - - - 525,252,301 32
- - - - - - - 571,785 - - - - 2,706,660 33
- - - - - - - - 9,227,790 - - - 9,227,790 41
23,345,712 14,778,441 25,557,280 538,332 339,979,474 90,475,928 49,667,730 7,559,815 92,394,952 636,116 661,812 - 1,771,209,923
13,075,762 1,483,096 809,651 - 378,161,352 9,391,357 601,113 - - - - - 753,984,953 5.3.6 (c)
25

27
29
30
31
32
33
41

E
FINANCIAL REPORTS

5.3.3 (d) Financial assets measured at amortised cost - loans and advances to customers - Analysis of Stage 2 and Stage 3 loans
6JGVCDNGUDGNQYUWOOCTKUGUVJGCIGKPIQHUVCIGCPFUVCIGNQCPUCUHQNNQYU
5VCIG.QCPUNGUUVJCP&C[U2CUV&WG
&2&CPFNQCPUITGCVGTVJCP&2&KTTGURGEVKXGQHVJGETKVGTKCVJCVVTKIIGTGFVJGKTENCUUKƂECVKQP
KPVQ5VCIG
5VCIG.QCPUNGUUVJCP&2&CPFNQCPUITGCVGTVJCP&2&VJWUUGITGICVKPIVJGNQCPUENCUUKƂGFCUUVCIGFWGVQCIGKPICPFVJQUG
KFGPVKƂGFCVCPGCTNKGTFCVGFWGVQQVJGTETKVGTKC
Bank b6WDJHb b6WDJHb b7RWDOb

As at 31st December 2022 b*URVVb b([SHFWHGb b*URVVb b([SHFWHGb b*URVVb b([SHFWHGb
bFDUU\LQJb bFUHGLWORVVHVb bFDUU\LQJb bFUHGLWORVVHVb bFDUU\LQJb bFUHGLWORVVHVb
amount amount amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Less than :
30 DPD 118,190,011 9,380,177 - - 118,190,011 9,380,177
90 DPD - - 22,886,740 8,465,632 22,886,740 8,465,632
More than :
30 DPD 50,266,336 6,855,196 - - 50,266,336 6,855,196
90 DPD - - 79,438,332 50,062,020 79,438,332 50,062,020
Total 168,456,347 16,235,373 102,325,072 58,527,652 270,781,419 74,763,025
Bank b6WDJHb b6WDJHb b7RWDOb

As at 31st December 2021 b*URVVb b([SHFWHGb b*URVVb b([SHFWHGb b*URVVb b([SHFWHGb
bFDUU\LQJb bFUHGLWORVVHVb bFDUU\LQJb bFUHGLWORVVHVb bFDUU\LQJb bFUHGLWORVVHVb
amount amount amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Less than :
30 DPD
90 DPD
More than :
30 DPD
90 DPD
Total

x°Î°Îi®iÀÛ>ÌÛiw>V>ÃÌÀÕiÌÃ
%TGFKVTKUMCTKUKPIHTQOFGTKXCVKXGƂPCPEKCNKPUVTWOGPVUKUCVCP[VKOGNKOKVGFVQVJQUGYKVJRQUKVKXGHCKTXCNWGUCUTGEQTFGFQPVJGUVCVGOGPV
QHƂPCPEKCNRQUKVKQP9KVJITQUUsUGVVNGFFGTKXCVKXGUVJG$CPMKUCNUQGZRQUGFVQCUGVVNGOGPVTKUMDGKPIVJGTKUMVJCVVJG$CPMJQPQWTUKVU
QDNKICVKQPDWVVJGEQWPVGTRCTV[HCKNUVQFGNKXGTVJGEQWPVGTXCNWG
6JGHQNNQYKPIVCDNGUJQYUCPCPCN[UKUQHEQWPVGTRCTV[ETGFKVGZRQUWTGUCTKUKPIHTQOFGTKXCVKXGƂPCPEKCNKPUVTWOGPVU
'HULYDWLYH7\SH
As at 31st December 2022 )RUZDUG SWAP Spot Total
Notional Fair Notional Fair Notional Fair Notional Fair
amount YDOXH amount YDOXH amount YDOXH amount YDOXH
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
'HULYDWLYH̍QDQFLDODVVHWV
$[EQWPVGTRCTV[
YKVJDCPMU - - 9,657,644 5,320,269 1,644,019 10,759 11,301,663 5,331,028
YKVJQVJGTEWUVQOGTU 2,510,983 39,473 - - - - 2,510,983 39,473
7RWDOGHULYDWLYH̍QDQFLDODVVHWV 2,510,983 39,473 9,657,644 5,320,269 1,644,019 10,759 13,812,646 5,370,501
'HULYDWLYH̍QDQFLDOOLDELOLWLHV
$[EQWPVGTRCTV[
YKVJDCPMU - - - - 335,347 819 335,347 819
YKVJQVJGTEWUVQOGTU 2,078,850 24,813 - - - - 2,078,850 24,813
7RWDOGHULYDWLYH̍QDQFLDOOLDELOLWLHV 2,078,850 24,813 - - 335,347 819 2,414,197 25,632
'HULYDWLYH7\SH
As at 31st December 2021 )RUZDUG SWAP Spot Total
Notional Fair Notional Fair Notional Fair Notional Fair
amount YDOXH amount YDOXH amount YDOXH amount YDOXH
'HULYDWLYH̍QDQFLDODVVHWV
$[EQWPVGTRCTV[
YKVJDCPMU
YKVJQVJGTEWUVQOGTU
7RWDOGHULYDWLYH̍QDQFLDODVVHWV
'HULYDWLYH̍QDQFLDOOLDELOLWLHV
$[EQWPVGTRCTV[
YKVJDCPMU
YKVJQVJGTEWUVQOGTU 14 14
7RWDOGHULYDWLYH̍QDQFLDOOLDELOLWLHV 14
FINANCIAL REPORTS

x°Î°Îv®`wi`w>V>>ÃÃiÌÃ
6JGEQPVTCEVWCNVGTOUQHCNQCPOC[DGOQFKƂGFHQTCPWODGTQHTGCUQPUKPENWFKPIEJCPIKPIOCTMGVEQPFKVKQPUEWUVQOGTTGVGPVKQPCPF
QVJGTHCEVQTUPQVTGNCVGFVQCEWTTGPVQTRQVGPVKCNETGFKVFGVGTKQTCVKQPQHVJGEWUVQOGT#PGZKUVKPINQCPYJQUGVGTOUJCXGDGGPOQFKƂGFOC[
DGFGTGEQIPKUGFCPFVJGTGPGIQVKCVGFNQCPTGEQIPKUGFCUCPGYNQCPCVHCKTXCNWGKPCEEQTFCPEGYKVJVJGCEEQWPVKPIRQNKE[UGVQWV
KP
EKKK
9JGPVJGVGTOUQHCƂPCPEKCNCUUGVCTGOQFKƂGFCPFVJGOQFKƂECVKQPFQGUPQVTGUWNVKPFGTGEQIPKVKQPVJGFGVGTOKPCVKQPQHYJGVJGTVJG
CUUGVoUETGFKVTKUMJCUKPETGCUGFUKIPKƂECPVN[TGƃGEVUEQORCTKUQPQH
r KVUTGOCKPKPINKHGVKOG2&CVVJGTGRQTVKPIFCVGDCUGFQPVJGOQFKƂGFVGTOUYKVJ
r VJGTGOCKPKPINKHGVKOG2&GUVKOCVGFDCUGFQPFCVCQPKPKVKCNTGEQIPKVKQPCPFVJGQTKIKPCNEQPVTCEVWCNVGTOU
9JGPOQFKƂECVKQPTGUWNVUKPFGTGEQIPKVKQPCPGYCUUGVKUTGEQIPKUGFCPFCNNQECVGFVQ5VCIG
CUUWOKPIKVKUPQVETGFKVKORCKTGFCVVJCV
VKOG
6JG)TQWRTGPGIQVKCVGUNQCPUVQEWUVQOGTUKPƂPCPEKCNFKHƂEWNVKGUVQOCZKOKUGEQNNGEVKQPQRRQTVWPKVKGUCPFOKPKOKUGVJGTKUMQHFGHCWNV
%QPEGUUKQPUCTGITCPVGFQPCUGNGEVKXGDCUKUKHVJGFGDVQTKUEWTTGPVN[KPFGHCWNVQPKVUFGDVQTKHVJGTGKUCJKIJTKUMQHFGHCWNVVJGTGKUGXKFGPEG
VJCVVJGFGDVQTOCFGCNNTGCUQPCDNGGHHQTVUVQRC[WPFGTVJGQTKIKPCNEQPVTCEVWCNVGTOUCPFVJGFGDVQTKUGZRGEVGFVQDGCDNGVQOGGVVJG
revised terms.
6JGTGXKUGFVGTOUWUWCNN[KPENWFGGZVGPFKPIVJGOCVWTKV[EJCPIKPIVJGVKOKPIQHKPVGTGUVRC[OGPVUCPFCOGPFKPIVJGVGTOUQHNQCP
EQXGPCPVU5WEJEQPEGUUKQPUCTGITCPVGFVQDQVJTGVCKNCPFEQTRQTCVGNQCPUCPFVJGOCPCIGOGPVTGIWNCTN[TGXKGYUTGRQTVUQPNQCPU
)GPGTCNN[CEJCPIGVQQTKIKPCNTGRC[OGPVVGTOUKUCSWCNKVCVKXGKPFKECVQTQHCUKIPKƂECPVKPETGCUGKPETGFKVTKUMHQTRGTHQTOKPIETGFKVHCEKNKV[
YJKNGVJGTGRC[OGPVVGTOUQHVJGGZKUVKPIETGFKVKORCKTGFETGFKVHCEKNKVKGUCTGCNUQCOGPFGFFWGVQTGCUQPUPQVGFCDQXG#EWUVQOGTPGGFUVQ
FGOQPUVTCVGEQPUKUVGPVN[IQQFRC[OGPVDGJCXKQWTQXGTCRGTKQFQHVKOGDGHQTGVJGGZRQUWTGKUPQNQPIGTEQPUKFGTGFVQJCXGCPKPETGCUGF
ETGFKVTKUMQTETGFKVKORCKTGFKPFGHCWNVCPFVJG2&KUEQPUKFGTGFVQJCXGFGETGCUGFUWEJVJCVKVHCNNUYKVJKPVJGOQPVJ2&TCPIGHQTVJG
CUUGVVQDGEQPUKFGTGF5VCIG
6JGHQNNQYKPIVCDNGRTQXKFGUKPHQTOCVKQPQPƂPCPEKCNCUUGVUVJCVYGTGOQFKƂGFYJKNGVJG[JCFCNQUUCNNQYCPEGOGCUWTGFCVCPCOQWPVGSWCN
VQNKHGVKOG'%.
2022 2021
Rs 000 Rs 000
)LQDQFLDODVVHWVPRGL̍HGGXULQJWKH\HDU
#OQTVKUGFEQUVDGHQTGOQFKƂECVKQP 1,966,160
0GVOQFKƂECVKQPNQUU 350,228
)LQDQFLDODVVHWVPRGL̍HGVLQFHLQLWLDOUHFRJQLWLRQ
)TQUUECTT[KPICOQWPVQHƂPCPEKCNCUUGVURTGXKQWUN[OQFKƂGFHQTYJKEJNQUUCNNQYCPEG
JCUEJCPIGFFWTKPIVJGRGTKQFVQCPCOQWPVGSWCNVQOQPVJ'%.HTQONKHGVKOG 573,956

5.3.4 (a) Credit exposure and expected credit loss (ECL) provision movement - Stage wise
Bank - 2022 6WDJHb 6WDJHb 6WDJHb b([SRVXUHV 7RWDOb

QRWbVXEMHFW
to ECL
b*URVV b(&/ b*URVVb b(&/ b*URVVb b(&/ *URVVb b*URVVb b(&/
bFDUU\LQJ bFDUU\LQJ bFDUU\LQJ bFDUU\LQJ bFDUU\LQJ
DPRXQWb DPRXQWb DPRXQWb DPRXQWb DPRXQWb
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 b5V b5Vb b5Vb
&DVKDQGFDVKHTXLYDOHQWV
#UCVUV,CPWCT[ 7,316,562 8,879 - - - - 30,877,571 38,194,133 8,879
6TCPUHGTVQUVCIG - - - - - - - - -
0GYCUUGVUQTKIKPCVGFQTRWTEJCUGFCPFGHHGEVQH
remeasurement 35,755,950 199,945 - - - - 8,396,430 44,152,380 199,945
(KPCPEKCNCUUGVUFGTGEQIPKUGFQTTGRCKF

GZENWFKPIYTKVGQHHU (1,904,620) (5,812) - - - - - (1,904,620) (5,812)
9TKVGQHHU - - - - - - - - -
As at 31st December 2022 41,167,892 203,012 - - - - 39,274,001 80,441,893 203,012
3ODFHPHQWVZLWKEDQNV
#UCVUV,CPWCT[ - - - - - - - - -
0GYCUUGVUQTKIKPCVGFQTRWTEJCUGFCPF
effect of remeasurement 54,383,166 12,138 - - - - - 54,383,166 12,138

GZENWFKPIYTKVGQHHU - - - - - - - - -
9TKVGQHHU - - - - - - - - -
As at 31st December 2022 54,383,166 12,138 - - - - - 54,383,166 12,138
GHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV
#UCVUV,CPWCT[ 171,409,727 10,732,205 - - 610,799 610,799 - 172,020,526 11,343,004
effect of remeasurement 372,617,295 66,097,175 - - 50,951 50,951 - 372,668,246 66,148,126

GZENWFKPIYTKVGQHHU (19,436,471) (1,030,703) - - - - - (19,436,471) (1,030,703)
9TKVGQHHU - - - - - - - - -
As at 31st December 2022 524,590,551 75,798,677 - - 661,750 661,750 - 525,252,301 76,460,427
FINANCIAL REPORTS

5.3.4 Credit exposure and expected credit loss (ECL) provision movement - Stage wise (Contd.)
Bank - 2022 6WDJHb 6WDJHb 6WDJHb b([SRVXUHV 7RWDOb

QRWbVXEMHFW
to ECL
b*URVV b(&/ b*URVVb b(&/ b*URVVb b(&/ *URVVb b*URVVb b(&/

/RDQVDQGDGYDQFHV
#UCVUV,CPWCT[ 715,110,232 6,494,958 150,226,415 10,188,640 63,635,083 36,033,438 - 928,971,730 52,717,036
6TCPUHGTVQUVCIG 34,945,673 2,869,494 (33,714,056) (2,214,600) (1,231,617) (654,894) - - -
6TCPUHGTVQUVCIG (56,663,002) (1,188,087) 59,886,453 2,509,049 (3,223,451) (1,320,962) - - -
6TCPUHGTVQUVCIG (14,472,826) (326,538) (24,004,453) (2,507,639) 38,477,279 2,834,177 - - -
effect of remeasurement 464,969,357 8,672,967 59,496,644 12,274,758 25,840,338 37,944,372 - 550,306,339 58,892,097

GZENWFKPIYTKVGQHHU (353,299,199) (3,847,373) (43,434,656) (3,307,415) (20,472,849) (10,310,201) - (417,206,704) (17,464,989)
9TKVGQHHU - - - - (699,711) (699,711) - (699,711) (699,711)
(QTGKIPGZEJCPIGCFLWUVOGPVU - (198,044) - (707,420) - (5,298,567) - - (6,204,031)
As at 31st December 2022 790,590,235 12,477,377 168,456,347 16,235,373 102,325,072 58,527,652 - 1,061,371,654 87,240,402
)LQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXHWKURXJK
RWKHUFRPSUHKHQVLYHLQFRPH
#UCVUV,CPWCT[ 199,128,701 295,445 - - - - 4,297,732 203,426,433 295,445
0GYCUUGVUQTKIKPCVGFRWTEJCUGFQTKPETGCUGKP
fair value 3,355,070 (295,445) - - - - 9,201 3,364,271 (295,445)
(KPCPEKCNCUUGVUFGTGEQIPKUGFTGRCKF
GZENWFKPI
YTKVGQHHUCPFTGFWEVKQPUKPHCKTXCNWG (202,455,933) - - - - - (1,628,111) (204,084,044) -
9TKVGQHHU - - - - - - - - -
As at 31st December 2022 27,838 - - - - - 2,678,822 2,706,660 -
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSUR̍WRUORVV
PHDVXUHGDWIDLUYDOXHWKURXJK
#UCVUV,CPWCT[ - - - - - - 103,365 103,365 -
fair value - - - - - - 8,256 8,256 -
GZENWFKPI
YTKVGQHHUCPFTGFWEVKQPUKPHCKTXCNWG - - - - - - (4) (4) -
9TKVGQHHU - - - - - - - - -
As at 31st December 2022 - - - - - - 111,617 111,617 -

Bank - 2021 b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b7RWDOb
QRWbVXEMHFW
to ECL
b*URVVb b(&/ b*URVVb b(&/ b*URVVb b(&/ *URVVb b*URVVb b(&/
&DVKDQGFDVKHTXLYDOHQWV
#UCVUV,CPWCT[
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
effect of remeasurement

GZENWFKPIYTKVGQHHU

9TKVGQHHU
GHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV
#UCVUV,CPWCT[
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
remeasurement

GZENWFKPIYTKVGQHHU

9TKVGQHHU
/RDQVDQGDGYDQFHV
#UCVUV,CPWCT[
6TCPUHGTVQUVCIG

6TCPUHGTVQUVCIG

6TCPUHGTVQUVCIG

remeasurement

GZENWFKPIYTKVGQHHU

9TKVGQHHU

(QTGKIPGZEJCPIGCFLWUVOGPV

FINANCIAL REPORTS
Bank - 2021 b6WDJHb b6WDJHb b6WDJHb b([SRVXUHV b7RWDOb

QRWbVXEMHFW
to ECL
b*URVVb b(&/ b*URVVb b(&/ b*URVVb b(&/ *URVVb b*URVVb b(&/
#UCVUV,CPWCT[
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
fair value
GZENWFKPI
YTKVGQHHUCPFTGFWEVKQPUKPHCKTXCNWG

9TKVGQHHU
)LQDQFLDODVVHWVUHFRJQLVHGWKURXJKSUR̍WRUORVV
PHDVXUHGDWIDLUYDOXHWKURXJK
#UCVUV,CPWCT[
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
6TCPUHGTVQUVCIG
fair value
GZENWFKPI
YTKVGQHHUCPFTGFWEVKQPUKPHCKTXCNWG
9TKVGQHHU
6JGEQPVTCEVWCNCOQWPVQWVUVCPFKPIQPƂPCPEKCNCUUGVUVJCVYGTGYTKVVGPQHHFWTKPIVJG[GCTGPFGFUV&GEGODGTCPFVJCVCTGUVKNNUWDLGEVVQ
GPHQTEGOGPVCEVKXKV[KU4U/P
4U/P

5.3.4 (b) Sensitivity of factors used to determine impairment provisions
)KXGPVJGEWTTGPVGEQPQOKEWPEGTVCKPVKGUCPFVJGLWFIOGPVUCRRNKGFVQHCEVQTUWUGFKPFGVGTOKPKPIVJGGZRGEVGFFGHCWNVQHDQTTQYGTUKP
HWVWTGRGTKQFUGZRGEVGFETGFKVNQUUGUTGRQTVGFD[VJG$CPMUJQWNFDGEQPUKFGTGFCUCDGUVGUVKOCVGYKVJKPCTCPIGQHRQUUKDNGGUVKOCVGU
As at 31st December 2022 6HQVLWLYLW\HIIHFWRQ6WDWHPHQWRI)LQDQFLDO3RVLWLRQ 6HQVLWLYLW\HIIHFWRQ

>,QFUHDVH'HFUHDVHLQLPSDLUPHQWSURYLVLRQ@ Income Statement
Stage 1 Stage 2 Stage 3 Total [Increase/(Decrease)
in impairment charge]
Rs.000 Rs.000 Rs.000 Rs.000 Rs.000
Change in Property realisation period of

LQGLYLGXDOO\VLJQL̍FDQWLPSDLUHGFXVWRPHUV
#FXCPEGFD[QPG[GCT - - (1,476,784) (1,476,784)

&GHGTTGFD[QPG[GCT - 30,166 1,623,970 1,654,136
Change in Probability of Default (PD)
+PETGCUGGZKUVKPI2&D[CETQUUCNNCIG
DWEMGVU 1,146,909 1,134,849 - 2,281,758
&GETGCUGGZKUVKPI2&D[CETQUUCNNCIG
DWEMGVU (1,146,909) (1,134,849) - (2,281,758)

&KDQJHLQ/RVV*LYHQ'HIDXOW/*'
KPETGCUG 318,735 323,214 475,357 1,117,306
FGETGCUG (318,735) (323,214) (475,357) (1,117,306)

Change in deemed loss period
&GGOGFNQUURGTKQFKPETGCUGD[[GCT (396,484) (444,685) (662,438) (1,503,607)

&GGOGFNQUURGTKQFFGETGCUGD[[GCT 414,259 461,783 691,334 1,567,376
Change in Economic Factor Adjustment (EFA)
YQTUGECUGKPETGCUGDGUVECUG
FGETGCUGDCUGECUGEQPUVCPV 178,343 176,954 - 355,297
YQTUGECUGFGETGCUGDGUVECUG
KPETGCUGDCUGECUGEQPUVCPV (178,343) (176,954) - (355,297)

FINANCIAL REPORTS
As at 31st December 2021 6HQVLWLYLW\HIIHFWRQ6WDWHPHQWRI)LQDQFLDO3RVLWLRQ 6HQVLWLYLW\HIIHFWRQ

>,QFUHDVH'HFUHDVHLQLPSDLUPHQWSURYLVLRQ@ Income Statement
Stage 1 Stage 2 Stage 3 Total [Increase/(Decrease)
in impairment charge]
Rs.000 Rs.000 Rs.000 Rs.000 Rs.000
Change in Property realisation period of

LQGLYLGXDOO\VLJQL̍FDQWLPSDLUHGFXVWRPHUV
#FXCPEGFD[QPG[GCT - - (479,637) (479,637)

&GHGTTGFD[QPG[GCT - - 436,773 436,773
Change in Probability of Default (PD)
+PETGCUGGZKUVKPI2&D[CETQUUCNNCIG
DWEMGVU 452,989 589,130 - 1,042,119
&GETGCUGGZKUVKPI2&D[CETQUUCNNCIG
DWEMGVU (452,989) (675,627) - (1,128,616)

&KDQJHLQ/RVV*LYHQ'HIDXOW/*'
KPETGCUG 45,299 58,913 86,353 190,565
FGETGCUG (45,299) (58,913) (86,353) (190,565)

Change in deemed loss period
&GGOGFNQUURGTKQFKPETGCUGD[[GCT (117,610) (172,598) (283,676) (573,884)

&GGOGFNQUURGTKQFFGETGCUGD[[GCT 216,436 334,088 520,018 1,070,542
Change in Economic Factor Adjustment (EFA)
YQTUGECUGKPETGCUGDGUVECUG
FGETGCUGDCUGECUGEQPUVCPV 53,420 69,940 - 123,360
YQTUGECUGFGETGCUGDGUVECUG
KPETGCUGDCUGECUGEQPUVCPV (53,420) (69,940) - (123,360)


5.3.5 Collateral held and other credit enhancement
6JGDCPMJQNFUEQNNCVGTCNCPFQVJGTETGFKVGPJCPEGOGPVUCICKPUVEGTVCKPV[RGUQHKVUETGFKVGZRQUWTGU6JGHQNNQYKPIVCDNGUGVUQWVVJG
RTKPEKRCNV[RGUQHEQNNCVGTCNJGNFCICKPUVFKHHGTGPVV[RGUQHƂPCPEKCNCUUGVU

Gross loan Security Gross loan Security
balance YDOXH balance YDOXH
Rs 000 Rs 000 Rs 000 Rs 000
6WDJHb
Cash Collateral 76,466,122 82,762,908
2TQRGTV[RNCPVCPFOCEJKPGT[ 294,499,462 382,441,371
Treasury Guarantee 2,142,752 2,142,752
Others 243,973,379 288,778,859
7PUGEWTGF 173,508,520 -
790,590,235 756,125,890
Stage 2
Cash collateral 8,090,283 8,508,945
Treasury Guarantee 36,321,632 36,321,632
Others 20,894,344 26,665,323
7PUGEWTGF 14,613,859 -
168,456,347 185,958,262
Stage 3
Cash collateral 1,945,161 1,755,307
Treasury Guarantee - -
Others 9,567,545 13,193,178
7PUGEWTGF 15,070,112 -
102,325,072 105,785,640
Assets obtained by taking possession of collateral

&GVCKNUQHƂPCPEKCNCPFPQPƂPCPEKCNCUUGVUQDVCKPGFD[VJG$CPMFWTKPIVJG[GCTD[VCMKPIRQUUGUUKQPQHEQNNCVGTCNJGNFCUUGEWTKV[CICKPUV
loans and advances and held at the year end are shown below.
2022 2021
Rs 000 Rs 000
Property 1,197,080

Debt securities -
Other -
6JG$CPMoURQNKE[KUVQRWTUWGVKOGN[TGCNKUCVKQPQHVJGEQNNCVGTCNKPCPQTFGTN[OCPPGT6JG$CPMFQGUPQVIGPGTCNN[WUGVJGPQPECUJEQNNCVGTCN
for its own operations.
FINANCIAL REPORTS

5.3.6 Concentration of Credit Risk
6JG$CPMOQPKVQTUEQPEGPVTCVKQPQHETGFKVTKUMD[UGEVQT
5.3.6 (a) Concentration by Sector
Bank Agriculture Manufacturing Tourism Transport Construction :KROHVDOHb

and DQGb and and
Fishing Storage Infrastructure Retail
Rs 000 b5V b5V b5V b5V b5V

Financial Assets
%CUJCPFECUJGSWKXCNGPVU - - - - - -
2NCEGOGPVUYKVJDCPMU - - - - - -
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - - - - - -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU - - - - - -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU - - 36,985 2,033 2 -
ITQUU 108,987,284 105,450,130 85,658,755 12,040,338 146,540,702 177,342,601
FGDVCPFQVJGTKPUVTWOGPVU - - - - - -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGT
comprehensive income - - - - - -
1VJGTƂPCPEKCNCUUGVU - - - - - -
108,987,284 105,450,130 85,695,740 12,042,371 146,540,704 177,342,601

Financial Assets
2NCEGOGPVUYKVJDCPMU
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGJTQWIJRTQƂVQTNQUU
ITQUU
FGDVCPFQVJGTKPUVTWOGPVU


Information )LQDQFLDOb Professional, Art, Education Health care, Consumption Other Lending to Total
Technology 6HUYLFHV 6FLHQWL̍F Entertainment Social 2YHUVHDV
and and Technical DQGb 6HUYLFHV Entities
Communication 6HUYLFHV Recreation and Support
6HUYLFHV 6HUYLFHV
b5V b5V b5V b5V b5V b5V b5V b5V b5V b5V
- 80,441,893 - - - - - - - 80,441,893
- 54,383,166 - - - - - - - 54,383,166
- 32,344,341 - - - - - - - 32,344,341
- 5,370,501 - - - - - - - 5,370,501
- 36,947 - - - - - 35,650 - 111,617
4,947,990 141,025,253 11,057,038 403,142 3,659,499 9,938,769 10,716,939 242,294,306 308,908 1,060,371,654
- 523,174,481 - - - - - 2,077,820 - 525,252,301
- 2,706,660 - - - - - - - 2,706,660
- 9,227,790 - - - - - - - 9,227,790
4,947,990 848,711,032 11,057,038 403,142 3,659,499 9,938,769 10,716,939 244,407,776 308,908 1,770,209,923

FINANCIAL REPORTS

5.3.6 (a) Concentration by Sector (Contd.)
Group Agriculture Manufacturing Tourism Transport Construction :KROHVDOHb

and DQGb and and
Fishing Storage Infrastructure Retail
Rs 000 b5V b5V b5V b5V b5V

Financial Assets
%CUJCPFECUJGSWKXCNGPVU - - - - - -
2NCEGOGPVUYKVJDCPMU - - - - - -
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - - - - - -
4GXGTUGTGRWTEJCUGCITGGOGPVU - - - - - -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU - - - - - -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU - - 36,985 2,033 2 -
ITQUU 118,863,213 110,548,454 86,309,121 13,881,238 148,063,546 195,084,245
FGDVCPFQVJGTKPUVTWOGPVU - - - - - -
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG - - - - - -
1VJGTƂPCPEKCNCUUGVU - - - - - -
118,863,213 110,548,454 86,346,106 13,883,271 148,063,548 195,084,245

Financial Assets
2NCEGOGPVUYKVJDCPMU
4GXGTUGTGRWTEJCUGCITGGOGPVU
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU
ITQUU
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG


Information )LQDQFLDOb Professional, Art, Education Health care, Consumption Other Lending to Total
Technology 6HUYLFHV 6FLHQWL̍F Entertainment Social 2YHUVHDV
and and Technical DQGb 6HUYLFHV Entities
Communication 6HUYLFHV Recreation and Support
6HUYLFHV 6HUYLFHV
b5V b5V b5V b5V b5V b5V b5V b5V b5V b5V
- 80,832,734 - - - - - - - 80,832,734
- 58,184,873 - - - - - - - 58,184,873
- 32,344,341 - - - - - - - 32,344,341
- 1,380,579 - - - - - - - 1,380,579
- 5,370,501 - - - - - - - 5,370,501
- 161,508 - - - - - 35,650 - 236,178
5,286,460 141,601,973 11,651,141 462,943 3,997,790 16,431,478 12,527,822 242,481,729 308,908 1,107,500,061
- 554,943,721 - - - - - 2,077,820 - 557,021,541
- 6,062,195 - - - - - - - 6,062,195
- 9,121,106 - - - - - 2,920,500 - 12,041,606
5,286,460 890,003,531 11,651,141 462,943 3,997,790 16,431,478 12,527,822 247,515,699 308,908 1,860,974,609

FINANCIAL REPORTS

x°Î°ÈL®-}wV>ÌvÀi}i`}iÝ«ÃÕÀiÃ
)TQUUCPFPGVECTT[KPIXCNWGUQHUKIPKƂECPVHQTGKIPNGPFKPICTGIKXGPDGNQY#NNVJGUGNQCPUJCXGDGGPEQPUKFGTGFCUUKIPKƂECPVNQCPUCPF
CPCN[UGFKPFKXKFWCNN[9JGPVJG$CPMJCUKFGPVKƂGFQDLGEVKXGGXKFGPEGQHKORCKTOGPVQHVJGUGNQCPUHWVWTGECUJƃQYUJCXGDGGPGUVKOCVGF
IKXKPIFWGEQPUKFGTCVKQPHQTURGEKƂEKPFWUVT[EQWPVT[TKUMHCEVQTUGVECPFCXCKNCDKNKV[QHEQNNCVGTCN
0DOGLYHV Uganda Cambodia

As at 31st December 2022 2021 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
)TQUUECTT[KPIXCNWG 30,872,476 3,486,830 307,758
Impairment allowance (796,365)
(345,979)
(1,970)

1HWFDUU\LQJYDOXH 30,076,111 3,140,851 305,788
6QVCNWPWVKNKUGFQXGTFTCHVUCRRTQXGFVQCDQXGEWUVQOGTUCUCVUV&GEGODGTCOQWPVUVQ4U/P
4U/P
5.3.6 (c) Commitments and Guarantees

6JG$CPMGPVGTUKPVQXCTKQWUKTTGXQECDNGEQOOKVOGPVUCPFCUUWOGUEQPVKPIGPVNKCDKNKVKGUKPQTFGTVQOGGVVJGƂPCPEKCNPGGFUQHVJGEWUVQOGT
6JGUGQDNKICVKQPUEQPVCKPETGFKVTKUMCPFHQTORCTVQHVJGQXGTCNNTKUMQHVJG$CPMGXGPVJQWIJVJQUGCTGPQVTGEQIPKUGFQPVJGUVCVGOGPVQH
ƂPCPEKCNRQUKVKQP
$VDWVW'HFHPEHUb 2022 2021

Rs 000 Rs 000
Documentary credit 21,226,810
Guarantees 109,352,321
Acceptances 6,758,569
%QOOKVVOGPVHQTWPWVKNKUGFHCEKNKVKGU&KTGEV 250,332,701
%QOOKVOGPVHQTWPWVKNKUGFHCEKNKVKGU+PFKTGEV 366,314,552
Total 753,984,953
x°Î°Ç "vvÃiÌÌ}w>V>>ÃÃiÌÃ>`w>V>>LÌiÃ
(KPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUCTGQHHUGVCPFVJGPGVCOQWPVRTGUGPVGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPYJGPCPFQPN[YJGPVJG
)TQWREWTTGPVN[JCUCNGICNN[GPHQTEGCDNGTKIJVVQUGVQHHVJGCOQWPVUCPFKVKPVGPFUGKVJGTVQUGVVNGVJGOQPCPGVDCUKUQTVQTGCNKUGVJGCUUGV
and settle the liability simultaneously.
5.3.8 Loan to value ratio

$CPMEQORNKGUYKVJVJGTGSWKTGOGPVUQH%GPVTCN$CPMQH5TK.CPMCKPTGNCVKQPVQ.QCPVQXCNWGTCVKQYJGPITCPVKPIETGFKVHCEKNKVKGU
5.4 Liquidity Risk

.KSWKFKV[TKUMKUVJGTKUMVJCVVJG$CPMKUWPCDNGVQOGGVKVUFGDVQDNKICVKQPUCUUQEKCVGFYKVJKVUƂPCPEKCNNKCDKNKVKGUFWGVQNCEMQHHWPFUQTJCXKPI
VQOGGVVJGUGQDNKICVKQPUCVGZEGUUKXGEQUV
x°{°£ >>}iiÌvµÕ`ÌÞ,Ã
6JG$CPMOCPCIGUNKSWKFKV[TKUMKPCEEQTFCPEGYKVJTGIWNCVQT[IWKFGNKPGUCPFKPVGTPCVKQPCNDGUVRTCEVKEGU6JGQDLGEVKXGQHVJG$CPMoUNKSWKFKV[
CPFHWPFKPIHTCOGYQTMKUVQGPUWTGVJCVHWPFKPIEQOOKVOGPVUCPFFGRQUKVYKVJFTCYCNUECPDGOGVYJGPFWGCPFOCTMGVCEEGUUTGOCKPUEQUV
GHHGEVKXG#DQCTFCRRTQXGFNKSWKFKV[RQNKE[VQOCPCIGNKSWKFKV[QPCFC[VQFC[DCUKUCNQPIYKVJCEQPVKPIGPE[HWPFKPIRNCPVQFGCNYKVJETKUKU
UKVWCVKQPUCTGKPRNCEG%QPVTCEVWCNCPFDGJCXKQWTCNOCVWTKV[QHCUUGVUCPFNKCDKNKVKGUMG[NKSWKFKV[TCVKQUCPFOQPVJN[NKSWKFKV[HQTGECUVUCPF
ICRUCTGTGXKGYGFCV#UUGVUCPF.KCDKNKV[%QOOKVVGG
#.%1OGGVKPIU6JGOCKPUQWTEGUQHVJG$CPMoUHWPFKPICTGECRKVCNEQTGFGRQUKVUHTQO
TGVCKNCPFEQOOGTEKCNENKGPVUYJQNGUCNGFGRQUKVUCPFCEEGUUVQDQTTQYGFHWPFUHTQOVJGKPVGTDCPMOQPG[OCTMGV6JG$CPMCNUQOCKPVCKPUC
RQTVHQNKQQHTGCFKN[OCTMGVCDNGUGEWTKVKGUVQHWTVJGTUVTGPIVJGPKVUNKSWKFKV[RQUKVKQP.KSWKFKV[TKUMGZRQUWTGKUOCPCIGFD[VTGCUWT[YKVJNKOKVU
CPFVTKIIGTUUGVVQGPUWTGVJCVUWHƂEKGPVNKSWKFKV[UWTRNWUCPFTGUGTXGUCTGCXCKNCDNGVQOGGVFCKN[DWUKPGUUTGSWKTGOGPVUCPFCNUQVQFGCNYKVJC
UWFFGPNKSWKFKV[UJQEM6TGCUWT[TGRQTVUVJG$CPMoUQXGTCNNNKSWKFKV[RQUKVKQPVQOCPCIGOGPVQPCFCKN[DCUKU
/CPCIGOGPVJCUGXCNWCVGFVJGRQVGPVKCNKORNKECVKQPUQHVJGEWTTGPVGEQPQOKEGPXKTQPOGPVQPVJG$CPMoUQRGTCVKQPUCPFHQTGECUVECUJƃQYU
CPFKUQHVJGXKGYVJCVVJGPGICVKXGKORCEVUHTQOUCOGYQWNFPQVRQUGCP[CFFKVKQPCNUVTGUUQPVJG$CPMoUCDKNKV[VQOCKPVCKPKVUTGIWNCVQT[
ECRKVCNOCTIKPUYJKEJKUCDQXGVJGTGIWNCVQT[TGSWKTGOGPVU(WTVJGTVJG$CPMJCUKPETGCUGFKVUNKSWKFKV[DWHHGTUQPCRTWFGPVDCUKUCPF
OCKPVCKPGFCUVTQPIGZEGUUNKSWKFKV[RQUKVKQP

x°{°Ó Ý«ÃÕÀiÌµÕ`ÌÞ,Ã
6JG$CPMOQPKVQTUVJGHQNNQYKPINKSWKFKV[TCVKQUVQCUUGUUHWPFKPITGSWKTGOGPVU

% %
Liquid Assets Ratio (LAR)

.#4KUVJGRGTEGPVCIGQHNKSWKFCUUGVUVQVQVCNNKCDKNKVKGUGZENWFKPI &QOGUVKE$CPMKPI7PKV 31.04 27.51
UJCTGJQNFGTUoHWPFU(QTVJKURWTRQUGqNKSWKFCUUGVUqKPENWFGECUJ
CPFECUJGSWKXCNGPVU2NCEGOGPVUYKVJDCPMUCPF)QXGTPOGPV 1HHUJQTG$CPMKPI7PKV 29.10 24.95
UGEWTKVKGU
PGV
$CPM7PKV 33.95
/LTXLGLW\&RYHUDJH5DWLR/&5
6JKUTCVKQFGVGTOKPGUVJGCDKNKV[QHVJG$CPMVQYKVJUVCPFCFXGTUG 4WRGG.KSWKFKV[4GSWKTGOGPV 255.83 191.38
UJQEMU
KGUWFFGPYKVJFTCYCNQHCUKIPKƂECPVRQTVKQPQHFGRQUKVUD[
JQNFKPIJKIJSWCNKV[NKSWKFCUUGVUKPCFC[VKOGURCP #NN%WTTGPE[.KSWKFKV[4GSWKTGOGPV 519.47 207.99
1HW6WDEOH)XQGLQJ5DWLR16)5b
6JKUTCVKQOGCUWTGUVJGCXCKNCDKNKV[QHUVCDNGHWPFUCICKPUVVJG 130.85 117.57
TGSWKTGFHWPFUQHVJG$CPM05(4TGSWKTGUDCPMUVQOCKPVCKPUVCDNG
HWPFKPIRTQƂNGD[ETGCVKPICFFKVKQPCNKPEGPVKXGUVQHWPFVJGKT
CEVKXKVKGUYKVJOQTGUVCDNGUQWTEGUQHHWPFKPIQPCPQPIQKPIDCUKU
QXGTCNQPIGTVKOGJQTK\QP
DBU FCBU Bank

As at 31st December 2022 2021 2022 2021 2022 2021
% % % % % %
Liquid Asset Ratio (LAR)

As at 31st December 31.04 27.51 29.10 24.95 33.95 28.02
#XGTCIGHQTVJG[GCT 27.28 35.98 24.80 29.05 28.62
Maximum for the year 31.04 40.58 29.10 32.91 33.95 40.71
Minimum for the year 22.94 27.51 20.20 24.95 23.86 28.02
Liquidity Ratios
%
100
75
50
25
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2021 2022
Gross loans/customer deposits Net loans/total assets LAR - BANK

LAR - DBU LAR - FCBU
FINANCIAL REPORTS

5.4.3 Analysis of Financial Assets and Liabilities by Remaining Contractual Maturities
6JGVCDNGDGNQYUWOOCTKUGUVJGOCVWTKV[RTQƂNGQHWPFKUEQWPVGFECUJƃQYUQHVJG$CPMoUƂPCPEKCNCUUGVUCPFNKCDKNKVKGUCUCVUV&GEGODGT
4GRC[OGPVUYJKEJCTGUWDLGEVVQPQVKEGCTGVTGCVGFCUKHPQVKEGYGTGVQDGIKXGPKOOGFKCVGN[*QYGXGTVJG$CPMGZRGEVUVJCVOCP[EWUVQOGTU
YKNNPQVTGSWGUVTGRC[OGPVQPVJGGCTNKGUVFCVGKVEQWNFDGTGSWKTGFVQRC[CPFVJGVCDNGFQGUPQVTGƃGEVVJGGZRGEVGFECUJƃQYUKPFKECVGFD[
its deposit retention history.
&RQWUDFWXDOPDWXULWLHVRIXQGLVFRXQWHGFDVK̎RZVRI̍QDQFLDODVVHWVDQG̍QDQFLDOOLDELOLWLHV
Bank b8SWR b b b b0RUHWKDQ Total

As at 31st December 2022 PRQWKVb PRQWKVb \HDUVb \HDUVb \HDUVb
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Derivative assets
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVUJGNFHQTTKUM
OCPCIGOGPV 5,370,501 - - - - 5,370,501
Non- derivative assets
%CUJCPFECUJGSWKXCNGPVU 80,238,881 - - - - 80,238,881
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - - - - 32,344,341 32,344,341
HCKTXCNWGVJTQWIJRTQƂVQTNQUU 111,617 - - - - 111,617
ITQUU 506,264,788 270,136,581 275,460,825 174,578,913 177,974,964 1,404,416,071
FGDVCPFQVJGTKPUVTWOGPVU 327,234,302 57,278,206 152,164,993 60,613,023 16,830,068 614,120,592
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG - - - - 2,706,660 2,706,660
1VJGTƂPCPEKCNCUUGVU 9,227,790 - - - - 9,227,790
7RWDOXQGLVFRXQWHG̍QDQFLDODVVHWV 928,447,879 327,414,787 427,625,818 235,191,936 229,856,033 2,148,536,453
Financial Liabilities
Derivative liabilities
OCPCIGOGPV 25,632 - - - - 25,632
Non-derivative liabilities
&WGVQDCPMU 4,780,031 524,045 558,692 318,770 - 6,181,538
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 4,282,462 2,465,795 - - - 6,748,257
Financial liabilities measured at amortised cost
FWGVQFGRQUKVQTU 1,097,056,617 580,352,671 135,381,426 32,939,069 1,111,947 1,846,841,730
Dividends payable 1,008,325 - - - - 1,008,325
QVJGTDQTTQYKPIU 4,061,646 6,613,965 18,280,867 8,037,042 134,667 37,128,187
Financial liabilities at amortised cost
FGDVUGEWTKVKGUKUUWGF - 2,167,000 90,715 - - 2,257,715
1VJGTƂPCPEKCNNKCDKNKVKGU 4,213 - - - - 4,213
Subordinated term debts - 6,455,387 6,919,668 10,441,341 9,660,000 33,476,396
7RWDOXQGLVFRXQWHG̍QDQFLDOOLDELOLWLHV 1,111,218,926 598,578,863 161,231,368 51,736,222 10,906,614 1,933,671,993
1HWXQGLVFRXQWHG̍QDQFLDODVVHWVOLDELOLWLHV (182,771,047) (271,164,076) 266,394,450 183,455,714 218,949,419 214,864,460

7KHWDEOHEHORZVKRZVWKHFRQWUDFWXDOH[SLU\E\PDWXULW\RIWKH%DQNʹVFRQWLQJHQWOLDELOLWLHVDQGFRPPLWPHQWV

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Documentary credit 13,483,828 7,742,983 - - - 21,226,811
Guarantees 33,192,654 52,079,594 19,941,837 1,762,628 2,375,607 109,352,320
Acceptances 5,670,069 990,609 97,891 - - 6,758,569
%QOOKVOGPVHQTWPWVKNKUGFHCEKNKVKGU&KTGEV 250,332,701 - - - - 250,332,701
%QOOKVOGPVHQTWPWVKNKUGFHCEKNKVKGU+PFKTGEV 366,314,552 - - - - 366,314,552
668,993,804 60,813,186 20,039,728 1,762,628 2,375,607 753,984,953
&RQWUDFWXDOPDWXULWLHVRIXQGLVFRXQWHGFDVK̎RZVRI̍QDQFLDODVVHWVDQG̍QDQFLDOOLDELOLWLHV

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Financial Assets
Derivative assets
OCPCIGOGPV 918,019 9,468 - - - 927,487
Non- derivative assets
%CUJCPFECUJGSWKXCNGPVU 38,194,133 - - - - 38,194,133
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - - - - 25,820,489 25,820,489
Financial assets measured
CVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 103,365 - - - - 103,365
ITQUU 340,301,920 259,567,528 254,691,262 130,746,016 136,289,942 1,121,596,668
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 169,603,705 6,382,678 21,108,788 7,996,230 10,993,173 216,084,574
1VJGTƂPCPEKCNCUUGVU 6,123,181 - - - - 6,123,181
7RWDOXQGLVFRXQWHG̍QDQFLDODVVHWV 603,922,105 289,841,199 348,054,654 181,117,508 190,801,073 1,613,736,539
Derivative liabilities
OCPCIGOGPV 258,878 94,479 - - - 353,357
Non-derivative liabilities
&WGVQDCPMU 6,050,989 6,262,755 3,041,281 2,084,682 83,252 17,522,959
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 33,350,209 223,535 - - - 33,573,744
FWGVQFGRQUKVQTU 687,506,906 363,827,496 37,101,967 8,113,501 29,186 1,096,579,056
Dividends payable 989,212 - - - - 989,212
QVJGTDQTTQYKPIU 5,889,972 2,903,335 6,900,771 7,424,656 1,941,680 25,060,414
FGDVUGEWTKVKGUKUUWGF - 167,000 2,257,715 - - 2,424,715
1VJGTƂPCPEKCNNKCDKNKVKGU 9,346 - - - - 9,346
Subordinated term debts - 3,282,408 11,676,144 11,475,252 10,325,000 36,758,804
7RWDOXQGLVFRXQWHG̍QDQFLDOOLDELOLWLHV 734,055,512 376,761,008 60,977,878 29,098,091 12,379,118 1,213,271,607
1HWXQGLVFRXQWHG̍QDQFLDODVVHWVOLDELOLWLHV (130,133,407) (86,919,809) 287,076,776 152,019,417 178,421,955 400,464,932
FINANCIAL REPORTS

7KHWDEOHEHORZVKRZVWKHFRQWUDFWXDOH[SLU\E\PDWXULW\RIWKH%DQNʹVFRQWLQJHQWOLDELOLWLHVDQGFRPPLWPHQWV

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Documentary credit 24,149,348 5,843,906 2,574,545 bbb bbb 32,567,799
Guarantees 25,718,038 46,601,604 22,795,051 2,674,113 2,985,631 100,774,437
Acceptances 16,286,190 6,050,694 bbb bbb bbb 22,336,884
%QOOKVOGPVHQTWPWVKNKUGFHCEKNKVKGU&KTGEV 193,057,343 bbb bbb bbb bbb 193,057,343
%QOOKVOGPVHQTWPWVKNKUGFHCEKNKVKGU+PFKTGEV 246,079,532 bbb bbb bbb bbb 246,079,532
505,290,451 58,496,204 25,369,596 2,674,113 2,985,631 594,815,995
The amounts in the table above have been compiled as follows.
7\SHRI̍QDQFLDOLQVWUXPHQW %DVLVRQZKLFKDPRXQWVDUHFRPSLOHG
0QPFGTKXCVKXGƂPCPEKCNNKCDKNKVKGUCPFƂPCPEKCNCUUGVU 7PFKUEQWPVGFECUJƃQYUYJKEJKPENWFGGUVKOCVGFKPVGTGUVRC[OGPVU
+UUWGFƂPCPEKCNIWCTCPVGGEQPVTCEVUCPFWPTGEQIPKUGF +PTGURGEVQHKUUWGFƂPCPEKCNIWCTCPVGGEQPVTCEVUVJGOCZKOWOCOQWPVQHVJG
loan commitments IWCTCPVGGKUCNNQECVGFVQVJGGCTNKGUVRGTKQFKPYJKEJVJGIWCTCPVGGEQWNFDG
called.
6JG$CPMoUGZRGEVGFECUJƃQYUQPUQOGƂPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUXCT[UKIPKƂECPVN[HTQOVJGEQPVTCEVWCNECUJƃQYU6JGRTKPEKRCN
FKHHGTGPEGUCTGCUHQNNQYU
rFGOCPFFGRQUKVUHTQOEWUVQOGTUCTGGZRGEVGFVQTGOCKPUVCDNGQTKPETGCUG
rWPFKUDWTUGFNQCPEQOOKVOGPVUCTGPQVCNNGZRGEVGFVQDGFTCYPFQYPKOOGFKCVGN[
x°{°{ µÕ`ÌÞÀiÃiÀÛiÃ
%QORQPGPVUQHVJG$CPMoUNKSWKFCUUGVURQTVHQNKQWUGFHQTVJGRWTRQUGQHECNEWNCVKPIUVCVWVQT[NKSWKFCUUGVTCVKQKP&GEGODGTCPF
&GEGODGT
CXGTCIGDCNCPEGHQTVJGOQPVJKUIKXGPDGNQY

Rs 000 Rs 000
Cash 35,462,644
$CNCPEGUYKVJNKEGPUGFEQOOGTEKCNDCPMU 1,492,200
/QPG[CVECNNKP5TK.CPMC 909,677
6TGCUWT[DKNNUCPFUGEWTKVKGUKUUWGFQTIWCTCPVGGFD[VJG)QXGTPOGPVQH5TK.CPMCYJKEJJCXGCOCVWTKV[PQV
GZEGGFKPIQPG[GCT 364,560,197
Import bills 1,177
Export bills 1,755,959
Cash items in the process of collection 243,012
$CNCPEGUYKVJDCPMUCDTQCF 90,037,563
7RWDODYHUDJHOLTXLGDVVHWVIRUWKHPRQWKRI'HFHPEHUb 494,462,429
/QPVJN[NKSWKFKV[ICRKUTGRQTVGFVQ#.%1D[6TGCUWT[HQTGCEJEWTTGPE[VQIGVJGTYKVJVJGQXGTCNNICRRQUKVKQP.KSWKFKV[ICRKUDCUGFQPVJG
GZRGEVGFTGCNKUCVKQPQHCUUGVUCPFNKCDKNKVKGUYJKEJJCXGDGGPFGVGTOKPGFDCUGFQPJKUVQTKECNDGJCXKQWT0GVNKSWKFKV[RQUKVKQPTGRQTVGFHQTVJG
OQPVJKUOQPKVQTGFCICKPUVVJGRTGUGVNKOKVUYJKEJJCXGDGGPCRRTQXGFD[VJG#.%1
6JG$CPMCNUQJQNFUFGDVCPFGSWKV[UGEWTKVKGUYJKEJCTGPQVEQPUKFGTGFCUNKSWKFCUUGVUDWVHQTYJKEJVJGTGKUCPCEVKXGCPFNKSWKFOCTMGV
6JGUGCUUGVUECPDGTGCFKN[UQNFVQOGGVCP[WPGZRGEVGFNKSWKFKV[TGSWKTGOGPVU&GVCKNGFCPCN[UKUQHVJGFGDVCPFGSWKV[UGEWTKVKGUJGNFD[VJG
$CPMCUCVUV&GEGODGTKURTGUGPVGFKP0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU

5.4.5 Financial assets available to support future funding
(KPCPEKCNCUUGVUCTGRNGFIGFCUEQNNCVGTCNCURCTVQHUCNGUCPFTGRWTEJCUGUUGEWTKVKGUDQTTQYKPICPFUGEWTKVKUCVKQPVTCPUCEVKQPUWPFGTVGTOU
VJCVCTGWUWCNCPFEWUVQOCT[HQTUWEJCEVKXKVKGU+PCFFKVKQPCURCTVQHVJGUGVTCPUCEVKQPUVJG$CPMJCUTGEGKXGFEQNNCVGTCNUVJCVKVKURGTOKVVGF
VQUGNNQTTGRNGFIGKPVJGCDUGPEGQHFGHCWNV
6JGVQVCNƂPCPEKCNCUUGVUTGEQIPKUGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPVJCVJCFDGGPRNGFIGFCUEQNNCVGTCNHQTNKCDKNKVKGUCUCVUV
&GEGODGTCPFKUUJQYPKPVJGHQNNQYKPIVCDNGU
As at 31st December 2022 Encumbered Unencumbered

Pledged as Other $YDLODEOHDV Other Total
collateral collateral
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
%CUJCPFECUJGSWKXCNGPVU - - 80,441,893 - 80,441,893

2NCEGOGPVUYKVJDCPMU - - 54,383,166 - 54,383,166
$CNCPEGUYKVJ%GPVTCN$CPMU - 32,344,341 - - 32,344,341
&GTKXCVKXGƂPCPEKCNCUUGVU - - - 5,370,501 5,370,501
(KPCPEKCNCUUGVUTGEQIPKUGFVJTQWIJRTQƂVQTNQUU
measured at fair value - - 111,617 - 111,617
.QCPUCPFCFXCPEGUVQQVJGTEWUVQOGTU - - 1,061,371,654 - 1,061,371,654
&GDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 8,864,761 - 516,387,540 - 525,252,301
comprehensive income - - 2,706,660 - 2,706,660
1VJGTƂPCPEKCNCUUGVU - - - 922,790 922,790
Total 8,864,761 32,344,341 1,715,402,530 6,293,291 1,762,904,923
As at 31st December 2021 Encumbered Unencumbered

Pledged as Other $YDLODEOHDV Other Total
collateral collateral
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000

2NCEGOGPVUYKVJDCPMU
$CNCPEGUYKVJ%GPVTCN$CPMU
&GTKXCVKXGƂPCPEKCNCUUGVU
measured at fair value
.QCPUCPFCFXCPEGUVQQVJGTEWUVQOGTU
&GDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU
Total
FINANCIAL REPORTS

5.5 Market Risk
/CTMGVTKUMKUVJGTKUMVJCVEJCPIGUKPOCTMGVRTKEGUUWEJCUKPVGTGUVTCVGUGSWKV[RTKEGUHQTGKIPGZEJCPIGTCVGUCPFETGFKVURTGCFU
PQV
TGNCVKPIVQEJCPIGUKPVJGQDNKIQToUQTKUUWGToUETGFKVUVCPFKPIYKNNCHHGEVVJG$CPMoUKPEQOGQTVJGXCNWGQHKVUJQNFKPIQHƂPCPEKCNKPUVTWOGPVU
6JGQDLGEVKXGQHVJG$CPMoUOCTMGVTKUMOCPCIGOGPVKUVQOCPCIGCPFEQPVTQNOCTMGVTKUMGZRQUWTGUYKVJKPCEEGRVCDNGRCTCOGVGTUKPQTFGTVQ
GPUWTGVJG$CPMoUUQNXGPE[YJKNGQRVKOKUKPIVJGTGVWTPQPTKUM
5.5.1 Management of Market Risk

6JG$CPMUGRCTCVGUKVUGZRQUWTGVQOCTMGVTKUMDGVYGGPVTCFKPICPFPQPVTCFKPIRQTVHQNKQU6TCFKPIRQTVHQNKQKPENWFGUƂPCPEKCNCUUGVUCPF
NKCDKNKVKGUVJCVCTGOCPCIGFQPCHCKTXCNWGDCUKU#NNHQTGKIPGZEJCPIGRQUKVKQPUYKVJKPVJG$CPMCTGVTGCVGFCURCTVQHVJG$CPMoUVTCFKPI
RQTVHQNKQHQTTKUMOCPCIGOGPVRWTRQUGU0QPVTCFKPIRQTVHQNKQKUOCPCIGFKPCEEQTFCPEGYKVJVJGRWTRQUGCPFUVTCVGIKEDGPGƂVUQHUWEJ
KPXGUVOGPVUTCVJGTVJCPRWTGN[QPHCKTXCNWGDCUKU
6JG$CPMJCUCDQCTFCRRTQXGFVTGCUWT[RQNKE[6TGCUWT[OKFFNGQHƂEGOQPKVQTUVJG$CPMoUEQORNKCPEGYKVJVJGCDQXGRQNKE[CPFGPUWTGUVJCV
VJG$CPMoUOCTMGVTKUMNKOKVUCTGKPNKPGYKVJVJGNGXGNQHTKUMCEEGRVCDNGVQVJG$QCTF6JG$CPMGORNQ[UCTCPIGQHVQQNUVQOQPKVQTCPFNKOKV
OCTMGVTKUMGZRQUWTGUYJKEJCTGFKUEWUUGFDGNQY
6JGHQNNQYKPIVCDNGUGVUQWVVJGCNNQECVKQPQHCUUGVUCPFNKCDKNKVKGUUWDLGEVVQOCTMGVTKUMDGVYGGPVTCFKPICPFPQPVTCFKPIRQTVHQNKQU
$VDWVW'HFHPEHUb Market Risk Measurement

Note Carrying Trading Non-Trading
amount Portfolio Portfolio
Rs 000 Rs 000 Rs 000
Assets subject to market risk

%CUJCPFECUJGSWKXCNGPVU 25 80,441,893 - 80,441,893
2NCEGOGPVUYKVJDCPMU 26 54,383,166 - 54,383,166
&GTKXCVKXGUƂPCPEKCNCUUGVU 29 5,370,501 5,370,501 -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 30 111,617 111,617 -
.QCPUVQCPFCFXCPEGUVQEWUVQOGTU 31 1,061,371,654 - 1,061,371,654
&GDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 32 525,252,301 - 525,252,301
other comprehensive income 33 2,706,660 - 2,706,660
1,729,637,792 5,482,118 1,724,155,674
Liabilities subject to market risk
&WGVQDCPMU 42 6,104,578 - 6,104,578
&GTKXCVKXGUƂPCPEKCNNKCDKNKVKGU 29 25,632 25,632 -
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 44 1,407,800,492 - 1,407,800,492
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU 46 32,350,594 - 32,350,594
Debt securities issued 47 2,062,950 - 2,062,950
Subordinated term debt 52 22,914,299 - 22,914,299
1,471,258,545 25,632 1,471,232,913

Market Risk Measurement
As at 31st December 2021 Note Carrying Trading Non-Trading
amount Portfolio Portfolio
Rs 000 Rs 000 Rs 000
Assets subject to market risk

%CUJCPFECUJGSWKXCNGPVU 25
2NCEGOGPVUYKVJDCPMU
&GTKXCVKXGUƂPCPEKCNCUUGVU 29
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 30
.QCPUVQCPFCFXCPEGUVQEWUVQOGTU 31
&GDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 32
other comprehensive income 33

Liabilities subject to market risk
&WGVQDCPMU 42
&GTKXCVKXGUƂPCPEKCNNKCDKNKVKGU 29
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 44
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU
Debt securities issued 47
Subordinated term debt 52

x°x°Ó Ý«ÃÕÀiÌiµÕÌÞ«ÀViÀÃ
6JGRTKPEKRCNVQQNWUGFVQOGCUWTGCPFEQPVTQNOCTMGVTKUMGZRQUWTGYKVJKPVJG$CPMKU8CNWGCV4KUM
8C46JG8C4QHCRQTVHQNKQKUVJG
GUVKOCVGFNQUUVJCVYKNNCTKUGQPVJGRQTVHQNKQQXGTCURGEKƂGFRGTKQFQHVKOG
JQNFKPIRGTKQFHTQOCPCFXGTUGOCTMGVOQXGOGPVYKVJ
CURGEKƂGFRTQDCDKNKV[
EQPƂFGPEGNGXGN6JG8C4OQFGNKUWUGFOCKPN[DCUGFQPJKUVQTKECNUKOWNCVKQPD[VJG$CPMWRQPCRGTEGPV
EQPƂFGPEGNGXGNCPFCUUWOGUFC[CPFCFC[JQNFKPIRGTKQF6CMKPICEEQWPVQHOCTMGVFCVCHTQOVJGRTGXKQWUVYQ[GCTUCPFQDUGTXGF
TGNCVKQPUJKRUDGVYGGPFKHHGTGPVOCTMGVUCPFRTKEGUVJGOQFGNIGPGTCVGUCYKFGTCPIGQHRNCWUKDNGHWVWTGUEGPCTKQUHQTOCTMGVRTKEG
movements.
#NVJQWIJ8C4KUCPKORQTVCPVVQQNHQTOGCUWTKPIOCTMGVTKUMVJGCUUWORVKQPUQPYJKEJVJGOQFGNKUDCUGFIKXGTKUGVQUQOGNKOKVCVKQPU
KPENWFKPIVJGHQNNQYKPI
r 6JGFC[CPFFC[JQNFKPIRGTKQFUCUUWOGUVJCVKVKURQUUKDNGVQJGFIGQTFKURQUGQHRQUKVKQPUYKVJKPVJQUGRGTKQFU6JKUOC[PQVDG
VJGECUGHQTKNNKSWKFCUUGVUQTKPUKVWCVKQPUKPYJKEJVJGTGKUUGXGTGIGPGTCNOCTMGVNKSWKFKV[
r #RGTEGPVEQPƂFGPEGNGXGNFQGUPQVTGƃGEVNQUUGUVJCVOC[QEEWTDG[QPFVJKUNGXGN'XGPYKVJKPVJGOQFGNWUGFVJGTGKUCQPGRGTEGPV
probability that losses could exceed the VaR.
r 8C4KUECNEWNCVGFQPCPGPFQHFC[DCUKUCPFFQGUPQVTGƃGEVGZRQUWTGUVJCVOC[CTKUGQPRQUKVKQPUFWTKPIVJGVTCFKPIFC[
r 6JGWUGQHJKUVQTKECNFCVCCUCDCUKUHQTFGVGTOKPKPIVJGRQUUKDNGTCPIGQHHWVWTGQWVEQOGUOC[PQVCNYC[UEQXGTCNNRQUUKDNGUEGPCTKQU
especially those of an exceptional nature.
r 6JG8C4OGCUWTGKUFGRGPFGPVWRQPVJG$CPMoURQUKVKQPCPFVJGXQNCVKNKV[QHOCTMGVRTKEGU6JG8C4QHCPWPEJCPIGFRQUKVKQPTGFWEGUKH
OCTMGVRTKEGXQNCVKNKV[FGENKPGUCPFXKEGXGTUC
r 6JG$CPMWUGU8C4NKOKVUHQTHQTGKIPGZEJCPIGCPFGSWKV[TKUMU6JGQXGTCNNUVTWEVWTGQH8C4NKOKVUKUUWDLGEVVQTGXKGYCPFCRRTQXCND[
#.%18C4NKOKVUCTGCNNQECVGFVQRQTVHQNKQU8C4KUOGCUWTGFCVNGCUVOQPVJN[CPFTGRQTVGFVQVJG#UUGVCPF.KCDKNKV[%QOOKVVGG
#.%1
CPF$QCTF+PVGITCVGF4KUM/CPCIGOGPV%QOOKVVGG
$+4/%
FINANCIAL REPORTS

6JG$CPMoU8C4OQFGNUCTGUWDLGEVVQTGIWNCTXCNKFCVKQPD[6TGCUWT[/KF1HƂEG
6/1VQGPUWTGVJCVVJG[EQPVKPWGVQRGTHQTOCUGZRGEVGFCPF
that assumptions used in model development are still appropriate.
#UWOOCT[QHVJG8C4RQUKVKQPQHVJG$CPMCUCVUV&GEGODGTKUCUHQNNQYU
Trading portfolio
/CTMGFVQOCTMGVXCNWGQHVJGVTCFKPIGSWKV[RQTVHQNKQ4U 111,121
8CNWGCV4KUM
WPFGTEQPƂFGPEGNGXGNHQTFC[RGTKQF 16.07%
/CZKOWORQUUKDNGNQUUQHXCNWGKPVJGOCTMGFVQOCTMGVXCNWGQHVJGRQTVHQNKQ
KUKPFKECVGFD[VJG8C4QXGTCFC[RGTKQF4U 17,857
Non trading portfolio

/CTMGFVQOCTMGVXCNWGQHVJGPQPVTCFKPIGSWKV[RQTVHQNKQ4U 17,290
8CNWGCV4KUM
WPFGTEQPƂFGPEGNGXGNHQTFC[RGTKQF 18.71%
/CZKOWORQUUKDNGNQUUQHXCNWGKPVJGOCTMGFVQOCTMGVXCNWGQHVJGRQTVHQNKQ
KUKPFKECVGFD[VJG8C4QXGTCFC[RGTKQF4U 1,705,480
6JGNKOKVCVKQPUQHVJG8C4OQFGNCTGOKVKICVGFD[UWRRNGOGPVKPI8C4NKOKVUYKVJQVJGTTKUMOGCUWTGU6JG$CPMWUGUCYKFGTCPIGQHUVTGUU
VGUVUVQOQFGNVJGƂPCPEKCNKORCEVQHXCTKQWUGZEGRVKQPCNOCTMGVUEGPCTKQUUWEJCUEJCPIGUKPGZEJCPIGTCVGUKPVGTGUVTCVGUCPFRTKEGUQH
ƂPCPEKCNKPUVTWOGPVUUWEJCUGSWKVKGUCPFDQPFU6JGTGUWNVUQHVJGUVTGUUVGUVUCTGTGXKGYGFRGTKQFKECNN[D[VJG#UUGVCPF.KCDKNKV[%QOOKVVGG

#.%1CPF$QCTF+PVGITCVGF4KUM/CPCIGOGPV%QOOKVVGG
$+4/%
5.5.3 Exposure to interest rate risk - Non-trading portfolios

6JGRTKPEKRCNTKUMVQYJKEJPQPVTCFKPIRQTVHQNKQUCTGGZRQUGFKUVJGTKUMQHNQUUHTQOƃWEVWCVKQPUKPVJGHWVWTGECUJƃQYUQTHCKTXCNWGUQH
ƂPCPEKCNKPUVTWOGPVUFWGVQEJCPIGUKPOCTMGVKPVGTGUVTCVGU6JG$CPMOCPCIGUVJGKPVGTGUVTCVGTKUMCICKPUVKPVGTGUVTCVGICRNKOKVUYJKEJ
KUUWRRNGOGPVGFD[OQPKVQTKPIVJGUGPUKVKXKV[QHVJG$CPMoUƂPCPEKCNCUUGVUCPFNKCDKNKVKGUVQXCTKQWUTCVGUEGPCTKQU0GVKPVGTGUV[KGNFUCTGCNUQ
ECNEWNCVGFHQTGCEJRTQFWEVVQGPUWTGVJCVCFGSWCVGOCTIKPUCTGOCKPVCKPGF
/CLQTKV[QHVJG$CPMoUJQNFKPIKPVTGCUWT[DKNNUCPFDQPFUCTGKPUJQTVGTOCVWTKVKGUVJWUVJGKORCEVQHKPVGTGUVTCVGEJCPIGUKPRTKEGUQHVTGCUWT[
DKNNUCPFDQPFUCTGXGT[KPUKIPKƂECPV/QFKƂGFFWTCVKQPQHPQPVTCFKPIRQTVHQNKQUCUCVUV&GEGODGTKUIKXGPDGNQY
0QPVTCFKPI 1.0398 1.0794

6JGHQNNQYKPIKUCUWOOCT[QHVJG$CPMoUKPVGTGUVTCVGICRRQUKVKQPQPPQPVTCFKPIRQTVHQNKQU6JGKPVGTGUVTCVGTGRTKEKPIICRVCDNGCPCN[UGUVJG
HWNNVGTOUVTWEVWTGQHKPVGTGUVTCVGOKUOCVEJGUYKVJKPVJG$CPMoUDCNCPEGUJGGVDCUGFQPGKVJGTVJGPGZVTGRTKEKPIFCVGQTVJGOCVWTKV[FCVGKH
ƃQCVKPITCVGQTVJGOCVWTKV[FCVGKHƂZGFTCVG
As at 31st December 2022 Carrying Less than ʶ ʶ ʶ More than
amount 3 months months months years 5 years
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
.QCPUCPFCFXCPEGUVQEWUVQOGTU 1,061,371,654 330,016,885 243,784,630 211,341,653 153,318,884 122,909,602
1,586,623,955 624,304,563 280,204,916 218,107,314 336,577,844 127,429,318
FWGVQFGRQUKVQTU 1,407,800,492 422,412,043 253,110,823 326,425,886 296,267,818 109,583,922
Debt securities issued 2,062,950 - - 1,978,910 84,040 -
Subordinated term debts 22,914,299 - - 4,086,904 11,541,353 7,286,042
$QTTQYKPIU 44,995,186 12,900,145 3,880,979 3,245,559 24,843,006 125,497
1,477,772,927 435,312,188 256,991,802 335,737,259 332,736,217 116,995,461
108,851,028 188,992,375 23,213,114 (117,629,945) 3,841,627 10,433,857
/QFKƂGFFWTCVKQPHQNNQYUVJGEQPEGRVVJCVVJGKPVGTGUVTCVGUCPFDQPFRTKEGUOQXGKPQRRQUKVGFKTGEVKQPU6JKUFGVGTOKPGUVJGGHHGEVVJCVC
DCUKURQKPV
EJCPIGKPKPVGTGUVTCVGUYKNNJCXGQPVJGRTKEGQHCDQPF
#PCPCN[UKUQHVJG$CPMoUUGPUKVKXKV[VQCPKPETGCUGQTFGETGCUGKPOCTMGVKPVGTGUVTCVGUDCUGFQPTCVGUGPUKVKXGCUUGVUCPFTCVGUGPUKVKXG
liabilities as at 31st December 2022 is as follows.
As at 31st December Increase of Decrease of Increase of Decrease of

100 bps 100 bps 200 bps 200 bps
.-42QTVHQNKQ
4U 2,549,391 (2,664,071) 4,990,617 (5,449,786)
75&2QTVHQNKQ
75& (5,602) 6,047 (10,799) 12,587
+PVGTGUVTCVGOQXGOGPVUCHHGEVTGRQTVGFGSWKV[KPVJGHQNNQYKPIYC[U
r 4GVCKPGFGCTPKPIU+PETGCUGU
FGETGCUGUKPPGVKPVGTGUVKPEQOGCPFKPHCKTXCNWGUQHFGTKXCVKXGUCPFQVJGTPQPVTCFKPIHKPCPEKCNCUUGVU
OCPFCVQTKN[OGCUWTGFCV(862.TGRQTVGFKPRTQHKVQTNQUU
r (CKTXCNWGTGUGTXG+PETGCUGU
FGETGCUGUKPVJGHCKTXCNWGUQHHKPCPEKCNCUUGVUCV(81%+TGRQTVGFFKTGEVN[KPGSWKV[
#IITGICVGPQPVTCFKPIKPVGTGUVTCVGTKUMRQUKVKQPUCTGOCPCIGFD[6TGCUWT[YJKEJWUGUKPXGUVOGPVUGEWTKVKGURNCEGOGPVUYKVJDCPMUFGRQUKVU
HTQODCPMUCPFFGTKXCVKXGKPUVTWOGPVUVQOCPCIGVJGRQUKVKQPU6JGWUGQHFGTKXCVKXGUVQOCPCIGKPVGTGUVTCVGTKUMKUFGUETKDGFKP0QVGVQ
the financial statements.
FINANCIAL REPORTS

5.5.4 Exposure to currency risks - Non-trading portfolios
Foreign exchange risk in Net Open Position (NOP)/unhedged position of Bank
6JGHQNNQYKPIVCDNGKPFKECVGUVJG$CPMoUGZEJCPIGTCVGTKUMGZRQUWTGDCUGFQPKVUUK\GQHVJG012WPJGFIGFRQUKVKQPUKPVJGHQTGKIPEWTTGPE[
CUUGVUNKCDKNKVKGU$[UV&GEGODGT$CPMECTTKGFC75&GSWKXCNGPV012WPJGFIGFp1XGTDQWIJVqRQUKVKQPQH.-4$P6JGKORCEV
QHGZEJCPIGTCVGTKUMKUIKXGPDGNQY
0GVGZRQUWTGs75&GSWKXCNGPV 38,763,350

Value of position in Rs 000 14,245,531
'ZEJCPIGTCVG
75&.-4CUCV&GEGODGT 367.50 202.98
3RVVLEOHSRWHQWLDOORVVWR%DQNb
s+HGZEJCPIGTCVG
75&.-4FGRTGEKCVGUD[s4U 142,455
s+HGZEJCPIGTCVGFGRTGEKCVGUD[s4U 1,424,553
s+HGZEJCPIGTCVGFGRTGEKCVGUD[s4U 2,136,830
5.6 Operational Risk

1RGTCVKQPCNTKUMKUVJGTKUMQHFKTGEVQTKPFKTGEVNQUUCTKUKPIHTQOCYKFGXCTKGV[QHECWUGUCUUQEKCVGFYKVJVJG$CPMoURTQEGUUGURGTUQPPGN
VGEJPQNQI[CPFKPHTCUVTWEVWTGCPFHTQOGZVGTPCNHCEVQTUQVJGTVJCPETGFKVOCTMGVCPFNKSWKFKV[TKUMU1RGTCVKQPCNTKUMUCTKUGHTQOCNNQHVJG
$CPMoUQRGTCVKQPU
6JG$CPMoUQDLGEVKXGKUVQOCPCIGQRGTCVKQPCNTKUMKPQTFGTVQCXQKFOKVKICVGƂPCPEKCNNQUUGUCPFFCOCIGVQVJG$CPMoUTGRWVCVKQPYKVJ
QXGTCNNEQUVGHHGEVKXGPGUUCPFKPPQXCVKQP#NNCEVKXKVKGUUJQWNFDGCNKIPGFYKVJVJG$CPMoURQNKE[CPFTGSWKTGUEQORNKCPEGYKVJVJGCRRNKECDNG
NGICNCPFTGIWNCVQT[TGSWKTGOGPVU
6JGHQNNQYKPICTGKPENWFGFKPVJGQRGTCVKQPCNTKUMOCPCIGOGPVRTQEGUUYKVJKPVJG$CPM
r 4GXKGYVJGTKUMGZRQUWTGVQVJG$CPMYKVJVJGEWTTGPVOCETQGEQPQOKEEJCPIGUVJTQWIJVJG4KUMCPF%QPVTQN5GNH#UUGUUOGPVRTQEGUU

4%5#CETQUUVJG$CPMoU&GRCTVOGPVUCPF$TCPEJPGVYQTM
r +FGPVKH[VJGTKUMGZRQUWTGVQVJG$CPMKPRTQEGUUGUHQNNQYGFD[FGRCTVOGPVUVJTQWIJ4KUMCPF%QPVTQN#UUGUUOGPV
4%5#RTQEGUUCPF
OQPKVQTVJCVPGEGUUCT[CEVKQPUCTGKPVTQFWEGFCPFKORNGOGPVGFVQOKVKICVGVJGCUUQEKCVGFTKUMU
r /QPKVQTKPIQH-G[4KUM+PFKECVQTU
-4+UHQTVJGFGRCTVOGPVUCPFGPUWTGVJCVVJG[CTGQRGTCVGFYKVJKPVJGFGƂPGFVJTGUJQNFNKOKVU
r %QNNCVGVJGNQUUKPEKFGPVUVJTQWIJVJGn1RGTCVKQPCNTKUMKPEKFGPVTGRQTVKPIU[UVGOoYJKEJCTGKPFGRGPFGPVN[CPCN[\GFD[VJG+PVGITCVGF4KUM
/CPCIGOGPV&KXKUKQP
+4/&CPFTGEQOOGPFPGEGUUCT[KORTQXGOGPVUVQVJGU[UVGOURTQEGUUGUCPFRTQEGFWTGUVQCXQKFTGEWTTGPEG
CPFOKVKICVGTKUMUVQOKPKOK\GVJGNQUUGU
r #PCN[\GFQYPVKOGQHVJGETKVKECNU[UVGOUCVVTKVKQPKPHQTOCVKQPGZKVKPVGTXKGYEQOOGPVUCPFEQORNCKPVUVQKFGPVKH[QRGTCVKQPCNTKUMUCPF
TGEQOOGPFOKVKICVKPIEQPVTQNU6JGMG[ƂPFKPIUQHVJGCPCN[UKUCTGGXCNWCVGFCVVJG1RGTCVKQPCN4KUM5VGGTKPI%QOOKVVGG
145%CPF
VJG$QCTF+PVGITCVGF4KUM/CPCIGOGPV%QOOKVVGG
$+4/%OGGVKPIUKPCPQRGTCVKQPCNTKUMRGTURGEVKXG
r 'PUWTKPIDWUKPGUUEQPVKPWKV[OCPCIGOGPVCPFQRGTCVKQPCNTGUKNKGPEGD[$WUKPGUU%QPVKPWKV[2NCPPKPI
$%2CPFVGUVKPIVJTQWIJ$CPMoU
FKUCUVGTTGEQXGT[FTKNNUVQUVTGPIVJGPRGTEGKXGFCTGCUHQTKORTQXGOGPV
r 4GXKGYKPITKUMKPPGYRTQFWEVURTQEGUUGUCPFQWVUQWTEKPICEVKXKVKGU

6JGRTKOCT[TGURQPUKDKNKV[HQTVJGFGXGNQROGPVQHQRGTCVKQPCNTKUMOCPCIGOGPVHTCOGYQTMCPFEQPVTQNUVQCFFTGUUQRGTCVKQPCNTKUMNKGUYKVJ
4/&YJKNUVKORNGOGPVCVKQPKUCUUKIPGFVQUGPKQTOCPCIGOGPVYKVJKPGCEJDWUKPGUUWPKVCPFUWRRQTVHWPEVKQP6JKUTGURQPUKDKNKV[KUUWRRQTVGF
D[VJGFGXGNQROGPVQHQXGTCNNUVCPFCTFUHQTOCPCIGOGPVQHQRGTCVKQPCNTKUMKPVJGHQNNQYKPICTGCU
r &GƂPKPITGSWKTGOGPVHQTCRRTQRTKCVGUGITGICVKQPQHFWVKGUKPENWFKPIKPFGRGPFGPVCWVJQTKUCVKQPQHVTCPUCEVKQPU
r &GƂPKPITGSWKTGOGPVUHQTTGEQPEKNKCVKQPCPFOQPKVQTKPIQHVTCPUCEVKQPU
r /CKPVCKPEQORNKCPEGYKVJTGIWNCVQT[CPFQVJGTNGICNTGSWKTGOGPVU
r 4GXKGYQHEQPVTQNUCPFRTQEGFWTGUVJTQWIJ4%5#RTQEGUU
r 2GTKQFKETGXKGYQHQRGTCVKQPCNTKUMUVQKFGPVKH[GOGTIKPIVJTGCVUCPFCUUGUVJGCFGSWCE[QHEQPVTQNUCPFRTQEGFWTGUVQOKVKICVGVJG
KFGPVKƂGFTKUMU
r /CKPVCKPCFCVCDCUGCPFTGRQTVKPIQHQRGTCVKQPCNNQUUGUVQVJGUGPKQTOCPCIGOGPV$QCTFQH&KTGEVQTUCPFTGIWNCVQT
r &GXGNQROGPVQHEQPVKPIGPE[RNCPUCUCDWUKPGUUEQPVKPWKV[OGCUWTG
r &GXGNQRKPIVJGTKUMCYCTGPGUUEWNVWTGCETQUUVJG$CPMVJTQWIJEQOOWPKECVKQPCPFEQPFWEVKPIVTCKPKPICPFCYCTGPGUURTQITCOOGUHQT
the staff to maintain ethics and business standards.
r 4GEQOOGPFKPUWTCPEGEQXGTCIGCUCTKUMOKVKICVKQPUVTCVGI[WPFGTVJGQRGTCVKQPCNTKUMHTCOGYQTMHQTGOGTIKPIVJTGCVUCTKUKPIHTQO
external and other events.
r 4KUMDCUGFTGXKGYUQPETKVKECNQWVUQWTEGFCEVKXKVKGU
FINANCIAL REPORTS

5.7 Capital Management
6JG$CPMKUTGSWKTGFVQOCPCIGKVUECRKVCNVCMKPIKPVQCEEQWPVVJGPGGFVQOGGVVJGTGIWNCVQT[TGSWKTGOGPVUCUYGNNCUVJGEWTTGPVCPFHWVWTG
DWUKPGUUPGGFUUVCMGJQNFGTGZRGEVCVKQPCPFCXCKNCDNGQRVKQPUHQTTCKUKPIECRKVCN
5.7.1 Regulatory capital

6JG$CPMOCPCIGUKVUECRKVCNEQPUKFGTKPITGIWNCVQT[ECRKVCNTGSWKTGOGPVU6JG%GPVTCN$CPMQH5TK.CPMC
%$5.UGVUCPFOQPKVQTUECRKVCN
TGSWKTGOGPVUHQTNKEGPUGFDCPMUKP5TK.CPMCDCUGFQPVJG$CUGN(TCOGYQTM6JWUVJG$CPMoUQRGTCVKQPUCTGFKTGEVN[UWRGTXKUGFD[%$5.6JG
$CPMKUTGSWKTGFVQEQORN[YKVJVJGRTQXKUKQPUQHVJG$CUGN+++HTCOGYQTMKPTGURGEVQHTGIWNCVQT[ECRKVCNCPFECRKVCNVQEQXGTCP[CFFKVKQPCN
TKUM
#NNDCPMUKP5TK.CPMCPGGFVQOCKPVCKPCOKPKOWO%QOOQP'SWKV[6KGTTCVKQQH6KGTTCVKQQHCPFCVQVCNECRKVCNTCVKQQH+P
CFFKVKQPVJGNKEGPUGFDCPMUYJKEJCTGFGVGTOKPGFCU&QOGUVKE5[UVGOKECNN[+ORQTVCPV$CPMU
&5+$UUJCNNOCKPVCKPCFFKVKQPCN*KIJGT.QUU
#DUQTDGPE[
*.#TGSWKTGOGPVUCUURGEKƂGFD[VJG/QPGVCT[$QCTFKPVJGHQTOQH%QOOQP'SWKV[6KGT
#URGTVJKUTGSWKTGOGPVVJG$CPMUJQWNFOCKPVCKPC%QOOQP'SWKV[6KGTTCVKQQHVQIGVJGTYKVJC6KGTTCVKQQHCPFCVQVCNECRKVCN
TCVKQQH4GIWNCVQT[OKPKOWOTCVKQCUCVUV&GEGODGT%QOOQP'SWKV[6KGTTCVKQQHVQIGVJGTYKVJC6KGTTCVKQQHCPF
CVQVCNECRKVCNTCVKQQH
Common equity Tier 1 (CET1) capital after adjustments 110,339,128

Total common equity Tier 1 (CET1) capital 148,633,241
'SWKV[ECRKVCN
UVCVGFECRKVCNCUUKIPGFECRKVCN 38,679,005
Reserve fund 9,310,000
2WDNKUJGFTGVCKPGFGCTPKPIU
CEEWOWNCVGFTGVCKPGFNQUUGU 40,600,740
2WDNKUJGFCEEWOWNCVGFQVJGTEQORTGJGPUKXGKPEQOG
1%+ 1,943,496

General and other disclosed reserves 58,100,000
7PRWDNKUJGFEWTTGPV[GCToURTQƂV
NQUUGUCPFICKPUTGƃGEVGFKP1%+ -
1TFKPCT[UJCTGUKUUWGFD[EQPUQNKFCVGFDCPMKPICPFƂPCPEKCNUWDUKFKCTKGUQHVJG$CPMCPFJGNFD[VJKTF
parties -
Total adjustments to CET1 capital 38,294,113
)QQFYKNN
PGV -
1VJGTKPVCPIKDNGCUUGVU
PGV 1,139,451
4GXCNWCVKQPNQUUGUQHRTQRGTV[RNCPVCPFGSWKROGPV -
&GƂPGFDGPGƂVRGPUKQPHWPFCUUGVU 3,479,578
+PXGUVOGPVUKPVJGECRKVCNQHDCPMKPICPFƂPCPEKCNKPUVKVWVKQPUYJGTGVJGDCPMFQGUPQVQYPOQTGVJCP
of the issued ordinary share capital of the entity 499,670
5KIPKƂECPVKPXGUVOGPVUKPVJGECRKVCNQHƂPCPEKCNKPUVKVWVKQPUYJGTGVJG$CPMQYPUOQTGVJCPQHVJG
issued ordinary share capital of the entity 2,704,063
&GHGTTGFVCZCUUGVU
PGV 30,471,351
Additional Tier 1 (AT1) capital after adjustments -
Total additional Tier 1 (ATI) capital -
3WCNKH[KPICFFKVKQPCN6KGTECRKVCNKPUVTWOGPVU -
+PUVTWOGPVUKUUWGFD[EQPUQNKFCVGFDCPMKPICPFƂPCPEKCNUWDUKFKCTKGUQHVJG$CPMCPFJGNFD[VJKTFRCTVKGU -
Total adjustments to AT1 capital -
Investment in own shares -
1VJGTU
5RGEKH[ -
Tier 2 Capital after adjustments 29,275,498
Total Tier 2 Capital 29,275,498

3WCNKH[KPI6KGTECRKVCNKPUVTWOGPVU 16,104,275

4GXCNWCVKQPICKPU 2,090,479
)GPGTCNRTQXKUKQPU'NKIKDNGKORCKTOGPV 11,080,745
+PUVTWOGPVUKUUWGFD[EQPUQNKFCVGFDCPMKPICPFƂPCPEKCNUWDUKFKCTKGUQHVJG$CPMCPFJGNFD[VJKTFRCTVKGU -
Total adjustments to Tier 2 capital -
Investment in own shares -
1VJGTU
URGEKH[ -
CET1 capital 148,633,241
Total Tier 1 capital 110,339,128
Total capital 139,614,626
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Total Risk Weighted Assets (RWA) 997,470,891 1,096,482,202

49#UHQTETGFKVTKUM 886,459,570 963,875,964
49#UHQTOCTMGVTKUM 14,398,617 14,566,345
49#UHQTQRGTCVKQPCNTKUM 96,612,704 118,039,893
Regulatory capital ratios (%)

%QOOQPGSWKV[6KGT%CRKVCNTCVKQ 11.06% 11.42%
Tier 1 capital ratio 11.06% 11.42%
Total capital ratio 14.00% 14.15%
5.7.2 Capital allocation

/CPCIGOGPVOQPKVQTUVJGECRKVCNCFGSWCE[TCVKQQPCTGIWNCTDCUKUVQGPUWTGVJCVKVQRGTCVGUYGNNCDQXGVJGKPVGTPCNNKOKVUGVD[VJG$CPM
6JGCNNQECVKQPQHECRKVCNDGVYGGPURGEKƂEQRGTCVKQPUCPFCEVKXKVKGUVQCNCTIGGZVGPVKUFTKXGPD[QRVKOKUCVKQPQHTGVWTPQPECRKVCNCNNQECVGF
6JGCOQWPVQHECRKVCNCNNQECVGFVQGCEJQRGTCVKQPQTCEVKXKV[KUDCUGFRTKOCTKN[QPTGIWNCVQT[ECRKVCNTGSWKTGOGPVUDWVKPUQOGECUGU
VJGTGIWNCVQT[TGSWKTGOGPVUFQPQVHWNN[TGƃGEVVJGXCT[KPIFGITGGQHTKUMUCUUQEKCVGFYKVJFKHHGTGPVCEVKXKVKGU+PUWEJECUGUVJGECRKVCN
TGSWKTGOGPVUOC[DGƃGZGFVQTGƃGEVFKHHGTKPITKUMRTQƂNGUUWDLGEVVQVJGQXGTCNNNGXGNQHECRKVCNVQUWRRQTVCRCTVKEWNCTQRGTCVKQPQTCEVKXKV[
PQVHCNNKPIDGNQYVJGOKPKOWOTGSWKTGFNGXGND[VJGTGIWNCVQT
FINANCIAL REPORTS
6 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
#%%1706+0)21.+%;
)DLUYDOXHPHDVXUHPHQW
(CKTXCNWGKUVJGRTKEGVJCVYQWNFDGTGEGKXGFVQUGNNCPCUUGVQTRCKFVQVTCPUHGTCNKCDKNKV[KPCPQTFGTN[VTCPUCEVKQPDGVYGGPOCTMGV
RCTVKEKRCPVUCVVJGOGCUWTGOGPVFCVGKPVJGRTKPEKRCNOCTMGVQTKPKVUCDUGPEGQHYJKEJVJGOQUVCFXCPVCIGQWUOCTMGVVQYJKEJVJG
)TQWRJCUCEEGUUCVVJCVFCVG6JGHCKTXCNWGQHCNKCDKNKV[TGƃGEVUKVUPQPRGTHQTOCPEGTKUM
+HVJGTGKUPQSWQVGFRTKEGKPCPCEVKXGOCTMGVVJGPVJG)TQWRWUGUXCNWCVKQPVGEJPKSWGUVJCVOCZKOKUGVJGWUGQHTGNGXCPVQDUGTXCDNG
KPRWVUCPFOKPKOKUGVJGWUGQHWPQDUGTXCDNGKPRWVU6JGEJQUGPXCNWCVKQPVGEJPKSWGKPEQTRQTCVGUCNNQHVJGHCEVQTUVJCVOCTMGV
RCTVKEKRCPVUYQWNFVCMGKPVQCEEQWPVKPRTKEKPICVTCPUCEVKQP
6JGDGUVGXKFGPEGQHVJGHCKTXCNWGQHCƂPCPEKCNKPUVTWOGPVQPKPKVKCNTGEQIPKVKQPKUPQTOCNN[VJGVTCPUCEVKQPRTKEGsKGVJGHCKTXCNWGQH
VJGEQPUKFGTCVKQPIKXGPQTTGEGKXGF+HVJG)TQWRFGVGTOKPGUVJCVVJGHCKTXCNWGQPKPKVKCNTGEQIPKVKQPFKHHGTUHTQOVJGVTCPUCEVKQPRTKEG
CPFVJGHCKTXCNWGKUGXKFGPEGFPGKVJGTD[CSWQVGFRTKEGKPCPCEVKXGOCTMGVHQTCPKFGPVKECNCUUGVQTNKCDKNKV[PQTDCUGFQPCXCNWCVKQP
VGEJPKSWGHQTYJKEJCP[WPQDUGTXCDNGKPRWVUCTGLWFIGFVQDGKPUKIPKƂECPVKPTGNCVKQPVQVJGFKHHGTGPEGVJGPVJGƂPCPEKCNKPUVTWOGPV
KUKPKVKCNN[OGCUWTGFCVHCKTXCNWGCFLWUVGFVQFGHGTVJGFKHHGTGPEGDGVYGGPVJGHCKTXCNWGQPKPKVKCNTGEQIPKVKQPCPFVJGVTCPUCEVKQPRTKEG
5WDUGSWGPVN[VJCVFKHHGTGPEGKUTGEQIPKUGFKPRTQƂVQTNQUUQPCPCRRTQRTKCVGDCUKUQXGTVJGNKHGQHVJGKPUVTWOGPVDWVPQNCVGTVJCPYJGP
VJGXCNWCVKQPKUYJQNN[UWRRQTVGFD[QDUGTXCDNGOCTMGVFCVCQTVJGVTCPUCEVKQPKUENQUGFQWV
)TQWROGCUWTGUVJGHCKTXCNWGQHCPCUUGVQTCNKCDKNKV[ECTTKGFCVHCKTXCNWGCVDKFRTKEGQTCUMRTKEGTGURGEVKXGN[6JGNQPIRQUKVKQPUCPF
UJQTVRQUKVKQPUCTGOGCUWTGFWUKPIOKFTCVGU
2QTVHQNKQUQHƂPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUVJCVCTGGZRQUGFVQOCTMGVTKUMCPFETGFKVTKUMVJCVCTGOCPCIGFD[VJG)TQWRQPVJG
DCUKUQHVJGPGVGZRQUWTGVQGKVJGTOCTMGVQTETGFKVTKUMCTGOGCUWTGFQPVJGDCUKUQHCRTKEGVJCVYQWNFDGTGEGKXGFVQUGNNCPGVNQPI
RQUKVKQP
QTRCKFVQVTCPUHGTCPGVUJQTVRQUKVKQPHQTVJGRCTVKEWNCTTKUMGZRQUWTG
6JG)TQWRTGEQIPKUGUVTCPUHGTUDGVYGGPNGXGNUQHVJGHCKTXCNWGJKGTCTEJ[CUQHVJGGPFQHVJGTGRQTVKPIRGTKQFFWTKPIYJKEJVJGEJCPIG
has occurred.
Valuation models
8CNWCVKQPVGEJPKSWGUKPENWFGPGVRTGUGPVXCNWGCPFFKUEQWPVGFECUJƃQYOQFGNUEQORCTKUQPYKVJUKOKNCTKPUVTWOGPVUHQTYJKEJ
QDUGTXCDNGOCTMGVRTKEGUGZKUVCPFQVJGTXCNWCVKQPOQFGNU#UUWORVKQPUCPFKPRWVUWUGFKPXCNWCVKQPVGEJPKSWGUKPENWFGTKUMHTGGCPF
DGPEJOCTMKPVGTGUVTCVGUETGFKVURTGCFUCPFQVJGTRTGOKWOUWUGFKPGUVKOCVKPIFKUEQWPVTCVGUDQPFCPFGSWKV[RTKEGUHQTGKIPEWTTGPE[
GZEJCPIGTCVGUGZRGEVGFRTKEGXQNCVKNKVKGUCPFEQTTGNCVKQPU
6JGQDLGEVKXGQHXCNWCVKQPVGEJPKSWGUKUVQCTTKXGCVCHCKTXCNWGOGCUWTGOGPVVJCVTGƃGEVUVJGRTKEGVJCVYQWNFDGTGEGKXGFVQUGNNVJG
CUUGVQTRCKFVQVTCPUHGTVJGNKCDKNKV[KPCPQTFGTN[VTCPUCEVKQPDGVYGGPOCTMGVRCTVKEKRCPVUCVVJGOGCUWTGOGPVFCVG
6JG)TQWRWUGUYKFGN[TGEQIPKUGFXCNWCVKQPOQFGNUVQFGVGTOKPGVJGHCKTXCNWGQHEQOOQPCPFUKORNGƂPCPEKCNKPUVTWOGPVUUWEJ
CUKPVGTGUVTCVGCPFEWTTGPE[UYCRUVJCVWUGQPN[QDUGTXCDNGOCTMGVFCVCCPFTGSWKTGNKVVNGOCPCIGOGPVLWFIGOGPVCPFGUVKOCVKQP
1DUGTXCDNGRTKEGUQTOQFGNKPRWVUCTGWUWCNN[CXCKNCDNGKPVJGOCTMGVHQTIQXGTPOGPVUGEWTKVKGUUWEJCUVTGCUWT[DKNNUVTGCUWT[DQPFUCPF
5TK.CPMCUQXGTGKIPDQPFUNKUVGFGSWKV[UGEWTKVKGUCPFHQTYCTFEQPVTCEVU6JGCXCKNCDKNKV[QHQDUGTXCDNGOCTMGVRTKEGUCPFOQFGNKPRWVU
TGFWEGUVJGPGGFHQTOCPCIGOGPVLWFIGOGPVCPFGUVKOCVKQPCPFCNUQTGFWEGUVJGWPEGTVCKPV[CUUQEKCVGFYKVJFGVGTOKPKPIHCKTXCNWGU
6JGCXCKNCDKNKV[QHQDUGTXCDNGOCTMGVRTKEGUCPFKPRWVUXCTKGUFGRGPFKPIQPVJGRTQFWEVUCPFOCTMGVUCPFKURTQPGVQEJCPIGUDCUGFQP
URGEKƂEGXGPVUCPFIGPGTCNEQPFKVKQPUKPVJGƂPCPEKCNOCTMGVU
Fair Value Hierarchy

6JG)TQWROGCUWTGUVJGHCKTXCNWGUQHƂPCPEKCNKPUVTWOGPVUWUKPIVJGHQNNQYKPIHCKTXCNWGJKGTCTEJ[YJKEJTGƃGEVUVJGUKIPKƂECPEGQHVJG
KPRWVUWUGFKPOCMKPIVJGOGCUWTGOGPVU
UiÛi£\>ÀÛ>Õii>ÃÕÀiiÌÕÃ}Õ>`ÕÃÌi`µÕÌi`>ÀiÌ«ÀViÃ
9JGPCXCKNCDNGVJGHCKTXCNWGUQHƂPCPEKCNKPUVTWOGPVUCTGFGVGTOKPGFWUKPISWQVGFOCTMGVRTKEGU
WPCFLWUVGFKPCEVKXGOCTMGVUHQT
KFGPVKECNKPUVTWOGPVU#OCTMGVKUTGICTFGFCUCEVKXGKHSWQVGFRTKEGUCTGTGCFKN[CPFTGIWNCTN[CXCKNCDNGCPFTGRTGUGPVCEVWCNCPF
TGIWNCTN[QEEWTTKPIOCTMGVVTCPUCEVKQPUQPCPCTOoUNGPIVJDCUKU#EEQTFKPIN[VJGHCKTXCNWGUQHVTGCUWT[DKNNUCPFDQPFUJCXGDGGP
FGTKXGFWUKPIVJGOCTMGV[KGNFUCPFOCTMGVRTKEGURWDNKUJGFD[%GPVTCN$CPMQH5TK.CPMCYJKNGHCKTXCNWGQHSWQVGFGSWKV[UGEWTKVKGUCPF
5TK.CPMC5QXGTGKIP$QPFUJCXGDGGPXCNWGFWUKPIVJGSWQVGFOCTMGVRTKEGUCUCVVJGTGRQTVKPIFCVGQVJGTVJCPVJG5TK.CPMC5QXGTGKIP
$QPFUYJKEJJCXGDGGPOCVWTGFDWVTGOCKPWPRCKFCUCVTGRQTVKPIFCVG5WEJDQPFUCTGKPENWFGFKPVJGHCKTXCNWGEQORWVCVKQPCV
amortised cost.

UiÛiÓ\>ÀÛ>Õii>ÃÕÀiiÌÕÃ}Ã}wV>ÌLÃiÀÛ>Li«ÕÌÃ
+PVJGCDUGPEGQHCPCEVKXGOCTMGVHQTCƂPCPEKCNKPUVTWOGPVVJGHCKTXCNWGKUFGVGTOKPGFWUKPISWQVGFOCTMGVRTKEGUKPCEVKXGOCTMGVUHQT
UKOKNCTKPUVTWOGPVUQTSWQVGFRTKEGUHQTKFGPVKECNQTUKOKNCTKPUVTWOGPVUKPOCTMGVUVJCVCTGEQPUKFGTGFNGUUVJCPCEVKXGQTQVJGTXCNWCVKQP
VGEJPKSWGUKPYJKEJCNNUKIPKƂECPVKPRWVUCTGFKTGEVN[QTKPFKTGEVN[QDUGTXCDNGHTQOOCTMGVFCVC6JGURQVCPFHQTYCTFRTGOKWOUCXCKNCDNG
CUCVVJGTGRQTVKPIFCVGJCXGDGGPWUGFVQGUVKOCVGVJGHCKTXCNWGQHFGTKXCVKXGƂPCPEKCNKPUVTWOGPVUYJKNGVJGHCKTXCNWGQHWPSWQVGF
WPKVUJCXGDGGPOGCUWTGFWUKPIOCPCIGToUUGNNKPIRTKEGU6JGHCKTXCNWGUQHƂPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUECTTKGFCVCOQTVKUGF
EQUVJCXGDGGPGUVKOCVGFD[EQORCTKPIVJGKPVGTGUVTCVGUYJGPVJG[YGTGƂTUVTGEQIPKUGFYKVJVJGEWTTGPVOCTMGVTCVGUQHUKOKNCT
instruments.
UiÛiÎ\>ÀÛ>Õii>ÃÕÀiiÌÕÃ}Ã}wV>ÌÕLÃiÀÛ>Li«ÕÌÃ
(KPCPEKCNKPUVTWOGPVUHQTYJKEJVJGXCNWCVKQPVGEJPKSWGKPENWFGUKPRWVUVJCVCTGPQVQDUGTXCDNGCPFVJGWPQDUGTXCDNGKPRWVUJCXGC
UKIPKƂECPVGHHGEVQPVJGKPUVTWOGPVoUXCNWCVKQP
(CKTXCNWGGUVKOCVGUQDVCKPGFHTQOOQFGNUCTGCFLWUVGFHQTCP[QVJGTHCEVQTUUWEJCUNKSWKFKV[TKUMQTOQFGNWPEGTVCKPVKGUVQVJGGZVGPV
VJCVVJG)TQWRDGNKGXGUVJCVCVJKTFRCTV[OCTMGVRCTVKEKRCPVYQWNFVCMGVJGOKPVQCEEQWPVKPRTKEKPICVTCPUCEVKQP
Assets and Liabilities Recorded at Fair Value

#FGUETKRVKQPQHJQYHCKTXCNWGUCTGFGVGTOKPGFHQTCUUGVUCPFNKCDKNKVKGUVJCVCTGTGEQTFGFCVHCKTXCNWGWUKPIXCNWCVKQPVGEJPKSWGUKU
UWOOCTKUGFDGNQYYJKEJKPEQTRQTCVGUVJGDCPMoUGUVKOCVGQHCUUWORVKQPUVJCVCOCTMGVRCTVKEKRCPVYQWNFOCMGYJGPXCNWKPIVJG
instruments.
UiÀÛ>ÌÛiw>V>ÃÌÀÕiÌÃ
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVUUWEJCUHQTYCTFHQTGKIPGZEJCPIGEQPVTCEVUCPFEWTTGPE[UYCRUCTGXCNWGFWUKPICXCNWCVKQPVGEJPKSWG
YKVJOCTMGVQDUGTXCDNGKPRWVU
.GXGN6JGOQUVHTGSWGPVN[CRRNKGFXCNWCVKQPVGEJPKSWGKUHQTYCTFRTKEKPIOQFGNYJKEJKPEQTRQTCVGU
XCTKQWUKPRWVUKPENWFKPIHQTGKIPGZEJCPIGURQVCPFHQTYCTFRTGOKWOU
• Financial assets measured at fair value through other comprehensive income (FVOCI)
)QXGTPOGPVFGDVUGEWTKVKGUENCUUKƂGFCUƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCTGXCNWGFWUKPI
EWTTGPV[KGNFTCVGUQTOCTMGVTCVGURWDNKUJGFD[VJG%GPVTCN$CPMQH5TK.CPMC3WQVGFGSWKVKGUCPFWPKVUENCUUKƂGFCU(81%+CTGXCNWGF
WUKPISWQVGFOCTMGVRTKEGUKPVJGCEVKXGOCTMGVUCUCVVJGTGRQTVKPIFCVG
.GXGN7PSWQVGFWPKVUENCUUKƂGFCU(81%+CTGXCNWGFWUKPI
OCPCIGToUUGNNKPIRTKEG7PSWQVGFUJCTGUENCUUKƂGFCU(81%+CTGXCNWGFCVEQUV
U>V>>ÃÃiÌÃi>ÃÕÀi`>Ìv>ÀÛ>ÕiÌÀÕ}«ÀwÌÀÃÃ6/*®
)QXGTPOGPVFGDVUGEWTKVKGUENCUUKƂGFCUƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUCTGXCNWGFWUKPIEWTTGPV[KGNFTCVGU
QTOCTMGVTCVGURWDNKUJGFD[VJG%GPVTCN$CPMQH5TK.CPMCYJKNGSWQVGFGSWKVKGUENCUUKƂGFCUƂPCPEKCNKPXGUVOGPVUTGEQIPKUGFVJTQWIJ
RTQƂVQTNQUUCTGXCNWGFWUKPISWQVGFOCTMGVRTKEGUKPCEVKXGOCTMGVUCUCVVJGTGRQTVKPIFCVG
.GXGN7PSWQVGFWPKVUENCUUKƂGFCU
ƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUCTGXCNWGFWUKPIOCPCIGToUUGNNKPIRTKEG
9DOXDWLRQIUDPHZRUN
%QPVTQNHTCOGYQTMJCUDGGPGUVCDNKUJGFHQTVJGOGCUWTGOGPVQHHCKTXCNWGU6JGFGVGTOKPCVKQPQHHCKTXCNWGKUECTTKGFQWVKPFGRGPFGPVN[
HTQOHTQPVQHƂEGOCPCIGOGPVCPFTGRQTVUVQVJG%JKGH(KPCPEKCNQHƂEGTYKVJVJGQXGTCNNTGURQPUKDKNKV[HQTKPFGRGPFGPVN[XGTKH[KPI
VJGTGUWNVUQHVTCFKPICPFKPXGUVOGPVQRGTCVKQPUCPFCNNUKIPKƂECPVHCKTXCNWGOGCUWTGOGPVU5RGEKƂEEQPVTQNUKPENWFGXGTKƂECVKQPQH
QDUGTXCDNGRTKEKPICPFCPCN[UKUCPFKPXGUVKICVKQPQHUKIPKƂECPVFCKN[XCNWCVKQPOQXGOGPVUHQTIQXGTPOGPVUGEWTKVKGU9JGPVJGCUUKUVCPEG
QHVJKTFRCTV[GZRGTVUKUQDVCKPGFVQFGVGTOKPGVJGHCKTXCNWGUVJGTGCUQPCDKNKV[QHUWEJXCNWCVKQPTGUWNVUCTGXCNKFCVGFCPFUKIPKƂECPV
XCNWCVKQPKUUWGUCTGTGRQTVGFVQVJG$QCTF#WFKV%QOOKVVGG
FINANCIAL REPORTS
6 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Contd.)
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
$VVHVVPHQWRILPSOLFDWLRQVRIXQFHUWDLQHFRQRPLFHQYLURQPHQW
6JG)TQWRGXCNWCVGUVJGOCVGTKCNCEEWTCE[QHVJGXCNWCVKQPUKPEQTRQTCVGFKPVJGƂPCPEKCNUVCVGOGPVUCUVJG[ECPKPXQNXGCJKIJFGITGGQH
LWFIGOGPVCPFGUVKOCVKQPKPFGVGTOKPKPIVJGECTT[KPIXCNWGUQHƂPCPEKCNCUUGVUCPFƂPCPEKCNNKCDKNKVKGUCVVJGTGRQTVKPIFCVG
6JGOCLQTKV[QHXCNWCVKQPOQFGNUVJG)TQWRWUGUQPN[QDUGTXCDNGOCTMGVFCVCCUKPRWVU6JKUJCUPQVEJCPIGFCUCTGUWNVQHEWTTGPV
GEQPQOKEEQPFKVKQPU*QYGXGTVJG)TQWRJCUEQPUKFGTGFVJGKORCEVQHTGNCVGFGEQPQOKECPFOCTMGVFKUTWRVKQPUQPHCKTXCNWG
OGCUWTGOGPVCUUWORVKQPUCPFVJGCRRTQRTKCVGPGUUQHXCNWCVKQPKPRWVUPQVCDN[XCNWCVKQPCFLWUVOGPVUCUYGNNCUVJGKORCEVQHEWTTGPV
GEQPQOKEEQPFKVKQPUQPVJGENCUUKƂECVKQPQHGZRQUWTGUKPVJGHCKTXCNWGJKGTCTEJ[
(QTEGTVCKPƂPCPEKCNKPUVTWOGPVUFCVCVJCVKUPQVTGCFKN[QDUGTXCDNGKPEWTTGPVOCTMGVUOC[DGWUGF+HWPQDUGTXCDNGOCTMGVFCVCKUWUGF
CJKIJGTFGITGGQHLWFIGOGPVKUWUGFVQFGVGTOKPGHCKTXCNWGFGRGPFKPIQPVJGUKIPKƂECPEGQHVJGWPQDUGTXCDNGKPRWVVQVJGQXGTCNN
XCNWCVKQP)GPGTCNN[WPQDUGTXCDNGKPRWVUCTGFGTKXGFHTQOQVJGTTGNGXCPVOCTMGVFCVCCPFEQORCTGFYKVJVJGQDUGTXGFVTCPUCEVKQP
prices where available.
6.1 Financial instruments measured at fair value and fair value hierarchy
6JGHQNNQYKPIVCDNGCPCN[UGUƂPCPEKCNKPUVTWOGPVUOGCUWTGFCVHCKTXCNWGCVVJGTGRQTVKPIFCVGD[VJGNGXGNKPVJGHCKTXCNWGJKGTCTEJ[KPVQYJKEJ
VJGHCKTXCNWGOGCUWTGOGPVKUECVGIQTKUGF
6JGCOQWPVUCTGDCUGFQPVJGXCNWGUTGEQIPKUGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP
Bank Group
As at 31st December 2022 /HYHO /HYHO /HYHO Total /HYHO /HYHO /HYHO Total
)LQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXH
GHULYDWLYH̍QDQFLDOLQVWUXPHQWV
Currency swaps - 5,320,269 - 5,320,269 bbb 5,320,269 bbb 5,320,269
(QTYCTFHQTGKIPGZEJCPIGEQPVTCEVU - 50,232 - 50,232 bbb 50,232 bbb 50,232
- 5,370,501 - 5,370,501 - 5,370,501 - 5,370,501
WKURXJKSUR̍WRUORVV
Quoted shares 111,121 - bbb 111,121 235,682 - - 235,682
Government Securities 496 - bbb 496 496 - - 496
7PSWQVGFWPKVU - - bbb - - - - -
111,617 - - 111,617 236,178 - - 236,178
Financial assets measured at fair
YDOXHWKURXJKRWKHUFRPSUHKHQVLYH
income
Quoted shares 2,134,875 - - 2,134,875 2,134,875 - - 2,134,875
7PSWQVGFUJCTGU - - 27,839 27,839 - - 30,551 30,551
7PSWQVGFWPKVU - 543,946 - 543,946 - 543,946 - 543,946
Government Securities - - - - 3,352,823 - - 3,352,823
2,134,875 543,946 27,839 2,706,660 5,487,698 543,946 30,551 6,062,195
Financial liabilities measured at
IDLUYDOXHGHULYDWLYH̍QDQFLDO
instruments
Currency swaps - - - - - - - -
(QTYCTFHQTGKIPGZEJCPIGEQPVTCEVU - 25,632 - 25,632 - 25,632 - 25,632
- 25,632 - 25,632 - 25,632 - 25,632

Bank Group
As at 31st December 2021 /HYHO /HYHO /HYHO Total /HYHO /HYHO /HYHO Total
GHULYDWLYH̍QDQFLDOLQVWUXPHQWV
Currency swaps
(QTYCTFHQTGKIPGZEJCPIGEQPVTCEVU

WKURXJKSUR̍WRUORVV
Quoted shares
Government Securities
7PSWQVGFWPKVU

Financial assets measured at fair
YDOXHWKURXJKRWKHUFRPSUHKHQVLYH
income
Quoted shares
7PSWQVGFUJCTGU
7PSWQVGFWPKVU
Government Securities

Financial liabilities measured at
IDLUYDOXHGHULYDWLYH̍QDQFLDO
instruments
Currency swaps
(QTYCTFHQTGKIPGZEJCPIGEQPVTCEVU

FINANCIAL REPORTS

)DLU9DOXH0HDVXUHPHQWRI$VVHWV&ODVVĽHGDV/HYHODQG/HYHO
6JGHQNNQYKPIVCDNGUUJQYVJGXCNWCVKQPVGEJPKSWGUWUGFKPOGCUWTKPI.GXGNCPF.GXGNHCKTXCNWGUHQTƂPCPEKCNKPUVTWOGPVUKPVJGUVCVGOGPV
QHƂPCPEKCNRQUKVKQPCUYGNNCUVJGUKIPKƂECPVWPQDUGTXCDNGKPRWVUWUGF
Type 8CNWCVKQPVGEJPKSWG
7PSWQVGFGSWKV[ 6JGOCLQTKV[QHWPSWQVGFGSWKV[KPXGUVOGPVUQHVJG)TQWRKPENWFGUJCTGKPXGUVOGPVUVJCVJCXGDGGPOCFGRTKOCTKN[HQT
shares TGIWNCVQT[RWTRQUGU5WEJKPXGUVOGPVUJCXGDGGPTGEQTFGFCVEQUVYJKEJKUEQORCTCDNGVQEQORWVGFHCKTXCNWG
(QTYCTFGZEJCPIG (QTYCTFRTKEKPI6JGHCKTXCNWGKUFGVGTOKPGFWUKPISWQVGFHQTYCTFGZEJCPIGTCVGUCVVJGTGRQTVKPIFCVGCPFRTGUGPV
EQPVTCEVU%WTTGPE[ XCNWGECNEWNCVKQPUDCUGFQPJKIJETGFKVSWCNKV[[KGNFEWTXGUKPVJGTGURGEVKXGEWTTGPEKGU
swaps
7PSWQVGFWPKVU /CPCIGToUUGNNKPIRTKEGU=4URGTWPKV
4U?
(WTVJGTVJGTGCTGPQOCVGTKCNEJCPIGUKPVJGHCKTXCNWGQHƂPCPEKCNCUUGVUECVGIQTKUGFWPFGT.GXGNEQORCTGFVQVJGXCNWGUTGRQTVGFCUCV
UV&GEGODGT6JG)TQWRJCUPQVEJCPIGFVJGXCNWCVKQPOQFGNUCPFCUUWORVKQPUWUGFVQOGCUWTGVJGHCKTXCNWGUQH.GXGNƂPCPEKCN
KPUVTWOGPVUFWTKPIVJG[GCTGPFGFUV&GEGODGT
(WTVJGTVJGTGYGTGPQVTCPUHGTUHTQO.GXGNVQ.GXGNQT.GXGNVQ.GXGNKPCPFPQVTCPUHGTUKPGKVJGTFKTGEVKQPKP6JGTGYGTGPQ
VTCPUHGTUQWVQH.GXGNKPQT
-iÃÌÛÌÞvÃ}wV>ÌÕLÃiÀÛ>Li«ÕÌÃÕÃi`Ìi>ÃÕÀiv>ÀÛ>ÕivwÝi`À>Ìiw>V>ÃÌÀÕiÌÃ
#UKIPKƂECPVKPETGCUG
FGETGCUGKPVJGOCTMGVKPVGTGUVTCVGYQWNFTGUWNVKPNQYGT
JKIJGTHCKTXCNWGDGKPIFKUENQUGF
6.3 Level 3 recurring fair values

5HFRQFLOLDWLRQRI/HYHOIDLUYDOXHV
6JGHQNNQYKPIVCDNGUJQYUCTGEQPEKNKCVKQPHTQOVJGQRGPKPIDCNCPEGUVQVJGENQUKPIDCNCPEGUHQT.GXGNHCKTXCNWGU
Equity securities
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
$CNCPEGCUCVUV,CPWCT[ 27,839 30,551

#FFKVKQPFWTKPIVJG[GCT - - 57
0GVEJCPIGKPHCKTXCNWG
WPTGCNKUGF - -
%DODQFHDVDWVWb'HFHPEHU 27,839 30,551

6.4 Fair value of assets and liabilities not measured at fair value
6JGHQNNQYKPIVCDNGUWOOCTKUGUVJGECTT[KPICOQWPVUCPFVJG)TQWRoUGUVKOCVGQHHCKTXCNWGUQHVJQUGCUUGVUCPFNKCDKNKVKGUPQVRTGUGPVGFKPVJG
UVCVGOGPVQHƂPCPEKCNRQUKVKQPCVHCKTXCNWG6JGHCKTXCNWGUKPVJGVCDNGDGNQYOC[DGFKHHGTGPVHTQOVJGCEVWCNCOQWPVUVJCVYKNNDGTGEGKXGF
RCKFQPVJGUGVVNGOGPVQTOCVWTKV[QHVJGCUUGVQTNKCDKNKV[(QTEGTVCKPKPUVTWOGPVUVJGHCKTXCNWGOC[DGFGVGTOKPGFWUKPICUUWORVKQPUYJKEJ
CTGPQVQDUGTXCDNGKPVJGOCTMGV
Bank Group
Fair Value Fair Value
As at 31st December 2022 &DUU\LQJb &DUU\LQJb
Value /HYHO /HYHO /HYHO Total Value /HYHO /HYHO /HYHO Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
)LQDQFLDO$VVHWVb
%CUJCPFECUJGSWKXCNGPVU=0QVG? 80,238,881 - 80,238,881 - 80,238,881 80,629,698 - 80,629,698 - 80,629,698
2NCEGOGPVUYKVJDCPMU=0QVG? 54,371,028 - 54,371,028 - 54,371,028 58,172,046 - 58,172,046 - 58,172,046
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC=0QVG? 32,344,341 - 32,344,341 - 32,344,341 32,344,341 - 32,344,341 - 32,344,341
4GXGTUGTGRWTEJCUGCITGGOGPV=0QVG? - - - - - 1,380,579 - 1,380,579 - 1,380,579
Financial assets at amortised cost
NQCPUCPFCFXCPEGUVQEWUVQOGTU=0QVG? 974,131,252 - 933,800,835 - 933,800,835 1,014,518,939 - 973,541,510 - 973,541,510
FGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU=0QVG? 448,791,874 348,994,206 40,082,026 - 389,076,232 479,787,015 370,428,179 45,475,163 - 415,903,342
1VJGTƂPCPEKCNCUUGVU=0QVG? 9,227,790 - 9,227,790 - 9,227,790 12,041,606 - 12,041,606 - 12,041,606
7RWDO̍QDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWb 1,599,105,166 348,994,206 1,150,064,901 - 1,499,059,107 1,678,874,224 370,428,179 1,203,584,943 - 1,574,013,122
&WGVQDCPMU=0QVG? 6,104,578 - 6,104,578 - 6,104,578 6,104,578 - 6,104,578 - 6,104,578
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU=0QVG? 6,540,014 - 6,540,014 - 6,540,014 6,540,014 - 6,540,014 - 6,540,014
FWGVQFGRQUKVQTU=0QVG? 1,407,800,492 - 1,421,837,816 - 1,421,837,816 1,443,179,121 - 1,455,835,738 - 1,455,835,738
&KXKFGPFURC[CDNG=0QVG? 1,008,325 - 1,008,325 - 1,008,325 1,038,542 - 1,038,542 - 1,038,542
QVJGTDQTTQYKPIU=0QVG? 32,350,594 - 32,350,594 - 32,350,594 33,385,598 - 33,385,598 - 33,385,598
&GDVUGEWTKVKGUKUUWGF=0QVG? 2,062,950 - 2,040,706 - 2,040,706 2,555,109 - 2,503,150 - 2,503,150
5WDQTFKPCVGFVGTOFGDVU=0QVG? 22,914,299 - 14,718,789 - 14,718,789 26,151,300 - 17,204,354 - 17,204,354
1VJGTƂPCPEKCNNKCDKNKVKGU=0QVG? 4,213 - 4,213 - 4,213 2,434,631 - 2,434,631 - 2,434,631
b7RWDO̍QDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVWb 1,478,785,465 - 1,484,605,035 - 1,484,605,035 1,521,388,893 - 1,525,046,605 - 1,525,046,605
FINANCIAL REPORTS
Bank Group
As at 31st December 2021 &DUU\LQJb &DUU\LQJb
Value /HYHO /HYHO /HYHO Total Value /HYHO /HYHO /HYHO Total
)LQDQFLDO$VVHWVb
%CUJCPFECUJGSWKXCNGPVU=0QVG?
2NCEGOGPVUYKVJDCPMU=0QVG?
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC=0QVG?
4GXGTUGTGRWTEJCUGCITGGOGPV=0QVG?
NQCPUCPFCFXCPEGUVQEWUVQOGTU=0QVG?
FGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU=0QVG?
1VJGTƂPCPEKCNCUUGVU=0QVG?
7RWDO̍QDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWb
&WGVQDCPMU=0QVG?
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU
=0QVG?
(KPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVFWGVQ
FGRQUKVQTU=0QVG?
&KXKFGPFURC[CDNG=0QVG?
QVJGTDQTTQYKPIU=0QVG?
&GDVUGEWTKVKGUKUUWGF=0QVG?
5WDQTFKPCVGFVGTOFGDVU=0QVG?
1VJGTƂPCPEKCNNKCDKNKVKGU=0QVG?
b7RWDO̍QDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVWb
(CKTXCNWGUQHVJGHQNNQYKPICUUGVUCPFNKCDKNKVKGUCTGGUVKOCVGFHQTVJGRWTRQUGQHFKUENQUWTGCUFGUETKDGFDGNQY
)LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWORDQVDQGDGYDQFHVWRFXVWRPHUV
6JGNQCPUCPFTGEGKXCDNGUVQEWUVQOGTUEQORTKUGQHDQVJƂZGFTCVGNQCPUCPFƃQCVKPITCVGNQCPU/CLQTKV[QHVJGƃQCVKPITCVGNQCPUECPDG
TGRTKEGFGKVJGTSWCTVGTN[QTUGOKCPPWCNN[YJKNGHQTƂZGFTCVGNQCPUVJGNQCPEQPVTCEVCNNQYUVJG$CPMVQEJCPIGVJGEQPVTCEVGFTCVGKHVJGTG
KUCOCVGTKCNFKHHGTGPEGDGVYGGPVJGEQPVTCEVGFTCVGCPFVJGOCTMGVTCVG6JGECTT[KPIXCNWGQHƃQCVKPITCVGNQCPUIGPGTCNN[CRRTQZKOCVGUVJG
HCKTXCNWGFWGVQVJGGHHGEVQHTGRTKEKPIYJKNGVJGHCKTXCNWGQHNQCPUCPFTGEGKXCDNGUVQEWUVQOGTUYKVJCTGUKFWCNOCVWTKV[QHNGUUVJCPQPG[GCT
IGPGTCNN[CRRTQZKOCVGUVJGECTT[KPIXCNWGUWDLGEVVQCP[UKIPKƂECPVOQXGOGPVKPETGFKVURTGCFU
6JGGUVKOCVGFHCKTXCNWGQHNQCPUCPFTGEGKXCDNGUYKVJCTGUKFWCNOCVWTKV[QHOQTGVJCPQPG[GCTKUVJGRTGUGPVXCNWGQHHWVWTGECUJƃQYU
GZRGEVGFVQDGTGEGKXGFHTQOUWEJNQCPUCPFTGEGKXCDNGUECNEWNCVGFDCUGFQPKPVGTGUVTCVGUCVVJGTGRQTVKPIFCVGHQTUKOKNCTV[RGUQHNQCPUCPF
receivables.
Financial assets measured at amortised cost - debt and other instruments

6JGUGEQORTKUGQHKPXGUVOGPVUKP5TK.CPMCFGXGNQROGPVDQPFU5TK.CPMCUQXGTGKIPDQPFUSWQVGFCPFWPSWQVGFFGDGPVWTGU
5TK.CPMCFGXGNQROGPVDQPFUCTGXCTKCDNGTCVGKPUVTWOGPVUYJGTGVJGTGRTKEKPIJCRRGPUUGOKCPPWCNN[6JWUVJGECTT[KPIXCNWGQHVJGUG
DQPFUCRRTQZKOCVGUVJGKTHCKTXCNWGCUCVVJGTGRQTVKPIFCVG6JGHCKTXCNWGUQH5TK.CPMCUQXGTGKIPDQPFUCTGXCNWGFWUKPISWQVGFOCTMGV

RTKEGUYJKNGVJGHCKTXCNWGQHWPSWQVGFFGDGPVWTGUCTGGUVKOCVGFCVVJGRTGUGPVXCNWGQHHWVWTGECUJƃQYUGZRGEVGFVQDGTGEGKXGFHTQOUWEJ
KPXGUVOGPVUECNEWNCVGFDCUGFQPKPVGTGUVTCVGUCVVJGTGRQTVKPIFCVGHQTUKOKNCTKPUVTWOGPVU
Financial liabilities measured at amortised cost - due to depositors

6JGHCKTXCNWGQHEWUVQOGTFGRQUKVUYJKEJCTGTGRC[CDNGQPFGOCPFQTJCXGCTGOCKPKPIEQPVTCEVWCNOCVWTKV[QHNGUUVJCPQPG[GCT
CRRTQZKOCVGUVQVJGECTT[KPIXCNWGQHUWEJFGRQUKVU
6JGHCKTXCNWGQHEWUVQOGTFGRQUKVUYKVJCEQPVTCEVWCNOCVWTKV[QHOQTGVJCPQPG[GCTKUGUVKOCVGFCUVJGRTGUGPVXCNWGQHHWVWTGECUJƃQYU
GZRGEVGFHTQOUWEJFGRQUKVUECNEWNCVGFDCUGFQPKPVGTGUVTCVGUCVVJGTGRQTVKPIFCVGHQTUKOKNCTV[RGUQHFGRQUKVU

6JGHCKTXCNWGQHFGDVUGEWTKVKGUKUUWGFJCUDGGPFGVGTOKPGFD[FKUEQWPVKPIVJGHWVWTGECUJƃQYUD[VJGKPVGTGUVTCVGURTGXCKNKPICUCVVJG
TGRQTVKPIFCVGHQTUKOKNCTKPUVTWOGPVU

6JGHCKTXCNWGQHƂZGFTCVGUWDQTFKPCVGFFGDGPVWTGUJCUDGGPFGVGTOKPGFD[FKUEQWPVKPIVJGHWVWTGECUJƃQYUD[VJGKPVGTGUVTCVGURTGXCKNKPI
CUCVVJGTGRQTVKPIFCVGHQTUKOKNCTKPUVTWOGPVU
6JGECTT[KPIXCNWGUQHCUUGVUCPFNKCDKNKVKGUNKUVGFDGNQYCTGTGCUQPCDNGCRRTQZKOCVKQPQHVJGKTHCKTXCNWGUUKPEGVJQUGCTGUJQTVVGTOKPPCVWTG
QTTGRTKEGFVQEWTTGPVOCTMGVTCVGUHTGSWGPVN[
Assets Liabilities
%CUJCPFECUJGSWKXCNGPVU &WGVQDCPMU
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC 5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU
2NCEGOGPVUYKVJDCPMU 1VJGTDQTTQYKPIU
5GEWTKVKGURWTEJCUGFWPFGTTGUCNGCITGGOGPVU Dividends payable
1VJGTƂPCPEKCNCUUGVU 1VJGTƂPCPEKCNNKCDKNKVKGU
7 GROSS INCOME
#%%1706+0)21.+%;
)TQUUTGXGPWGKUTGEQIPKUGFVQVJGGZVGPVVJCVKVKURTQDCDNGVJCVVJGGEQPQOKEDGPGƂVUYKNNƃQYVQVJG)TQWRCPFVJGTGXGPWGECPDG
TGNKCDN[OGCUWTGF6JGURGEKƂETGEQIPKVKQPETKVGTKCHQTGCEJV[RGQHITQUUKPEQOGCTGIKXGPWPFGTVJGTGURGEVKXGKPEQOGPQVGU
Bank Group
For the year ended 31st December 2022 b 2022 b
Rs 000 Rs 000 Rs 000 Rs 000
+PVGTGUVKPEQOG=0QVG
C? 207,019,354 220,581,307
(GGCPFEQOOKUUKQPKPEQOG
0QVG 15,520,113 16,521,300
0GVICKP
NQUUHTQOVTCFKPI
0QVG 4,898,719
4,825,568

0GVICKPHTQOƂPCPEKCNKPXGUVOGPVUCVHCKTXCNWGVJTQWIJQVJGT
EQORTGJGPUKXGKPEQOG
0QVG 22,619 23,099
0GVKPUWTCPEGRTGOKWOKPEQOG
0QVG - 12,750,482
0GVICKPUCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVU
0QVG - -
0GVQVJGTQRGTCVKPIKPEQOG
0QVG 14,951,686 15,807,653
242,412,491 270,509,409
FINANCIAL REPORTS
8 NET INTEREST INCOME
#%%1706+0)21.+%;
+PVGTGUVKPEQOGCPFGZRGPUGUWPFGT5.(45KUTGEQTFGFWUKPIVJGGHHGEVKXGKPVGTGUVTCVGOGVJQFHQTCNNƂPCPEKCNKPUVTWOGPVUOGCUWTGF
CVCOQTVKUGFEQUVCPFƂPCPEKCNKPUVTWOGPVUFGUKIPCVGFCV(862.CPF(81%+6JGGHHGEVKXGKPVGTGUVTCVGKUVJGTCVGVJCVGZCEVN[FKUEQWPVU
GUVKOCVGFHWVWTGECUJTGEGKRVUVJTQWIJVJGGZRGEVGFNKHGQHVJGƂPCPEKCNKPUVTWOGPVQTYJGPCRRTQRTKCVGCUJQTVGTRGTKQFVQVJGPGV
ECTT[KPICOQWPVQHVJGƂPCPEKCNCUUGV
6JGGHHGEVKXGKPVGTGUVTCVG
CPFVJGTGHQTGVJGCOQTVKUGFEQUVQHVJGCUUGVKUECNEWNCVGFD[VCMKPIKPVQCEEQWPVCP[FKUEQWPVQTRTGOKWO
QPCESWKUKVKQPHGGUCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJGGHHGEVKXGKPVGTGUVTCVG6JG)TQWRTGEQIPKUGUKPVGTGUVKPEQOGWUKPICTCVGQH
return that represents the best estimate of a constant rate of return over the expected life of the loan. The calculation includes all fees
CPFRQKPVUTGEGKXGFQTRCKFDGVYGGPRCTVKGUVQVJGEQPVTCEVVJCVCTGCPKPVGITCNRCTVQHGHHGEVKXGKPVGTGUVTCVG
1PEGVJGTGEQTFGFXCNWGQHCƂPCPEKCNCUUGVQTCITQWRQHUKOKNCTƂPCPEKCNCUUGVUJCUDGGPTGFWEGFFWGVQCPKORCKTOGPVNQUUKPVGTGUV
KPEQOGEQPVKPWGUVQDGTGEQIPKUGFWUKPIVJGTCVGQHKPVGTGUVWUGFVQFKUEQWPVVJGHWVWTGECUJƃQYUHQTVJGRWTRQUGQHOGCUWTKPIVJG
impairment loss.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
+PVGTGUVKPEQOG=0QVG
C? 207,019,354 220,581,307
+PVGTGUVGZRGPUG=0QVG
D? 104,142,478 109,014,763
Net interest income 102,876,876 111,566,544
8 (a) Interest income
#%%1706+0)21.+%;
6JG)TQWRECNEWNCVGUKPVGTGUVKPEQOGD[CRRN[KPIVJGGHHGEVKXGKPVGTGUVTCVGVQVJGITQUUECTT[KPICOQWPVQHƂPCPEKCNCUUGVUQVJGTVJCP
ETGFKVKORCKTGFCUUGVU
9JGPCƂPCPEKCNCUUGVDGEQOGUETGFKVKORCKTGF
CUUGVQWVKP0QVG
EKKVQVJGƂPCPEKCNUVCVGOGPVUCPFKUVJGTGHQTGTGICTFGFCU
5VCIGVJG)TQWRECNEWNCVGUKPVGTGUVKPEQOGD[CRRN[KPIVJGGHHGEVKXGKPVGTGUVTCVGVQVJGPGVCOQTVKUGFEQUVQHVJGƂPCPEKCNCUUGV+H
VJGƂPCPEKCNCUUGVEWTGU
CUQWVNKPGFKP0QVG
EKKVQVJGƂPCPEKCNUVCVGOGPVUCPFKUPQNQPIGTETGFKVKORCKTGFVJG$CPMTGXGTVUVQ
ECNEWNCVKPIKPVGTGUVKPEQOGQPCITQUUCOQTVKUGFEQUVDCUKU
)TQWREGCUGUVJGTGEQIPKVKQPQHKPVGTGUVKPEQOGQPCUUGVUYJKEJCTGEQNNGEVKXGN[KORCKTGF
QXGTFC[URCUVFWGYJGPKVKURTQDCDNGVJCV
VJGGEQPQOKEDGPGƂVUCUUQEKCVGFYKNNPQVEQPVKPWGVQƃQYVQVJG$CPM
(QT2WTEJCUGFQT1TKIKPCVGF%TGFKV+ORCKTGF
21%+ƂPCPEKCNCUUGVU
CUUGVQWVKP0QVG
DKKVQVJGƂPCPEKCNUVCVGOGPVUVJG)TQWR
ECNEWNCVGUKPVGTGUVKPEQOGD[ECNEWNCVKPIVJGETGFKVCFLWUVGFGHHGEVKXGKPVGTGUVTCVGCPFCRRN[KPIVJCVTCVGVQVJGCOQTVKUGFEQUVQHVJG
CUUGV6JGETGFKVCFLWUVGFGHHGEVKXGKPVGTGUVTCVGKUVJGKPVGTGUVTCVGVJCVCVQTKIKPCNTGEQIPKVKQPFKUEQWPVUVJGGUVKOCVGFHWVWTGECUJƃQYU

KPENWFKPIETGFKVNQUUGUVQVJGCOQTVKUGFEQUVQHVJG21%+CUUGVU
+PVGTGUVKPEQOGQPCNNVTCFKPICUUGVUCPFƂPCPEKCNCUUGVUOCPFCVQTKN[TGSWKTGFVQDGOGCUWTGFCV(862.KUTGEQIPKUGFWUKPIVJG
contractual interest rate.

Db ,QWHUHVW,QFRPH&RQWG
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
%CUJCPFECUJGSWKXCNGPVU 140,689 240,985

5GEWTKVKGURWTEJCUGFWPFGTTGUCNGCITGGOGPVU 348,965 750,619
2NCEGOGPVUYKVJDCPMU 455,901 816,576
+PVGTGUVKPEQOGCEETWGFQPKORCKTGFƂPCPEKCNUCUUGVU 2,100,903 2,100,903
.QCPUCPFCFXCPEGUVQEWUVQOGTU 141,356,955 149,742,363
&GDVCPFQVJGTKPUVTWOGPVU 58,280,183 61,160,376
other comprehensive income 4,129,607 5,561,098
Other interest income 203,703 173,026
207,019,354 220,581,307
+PVGTGUV+PEQOGHTQONQCPUCPFCFXCPEGUVQEWUVQOGTUKPENWFGUOQFKƂECVKQPUOCFGVQNQCPUFWGVQOQTCVQTKWOFGDVEQPEGUUKQPCT[UEJGOGU
KORNGOGPVGFD[VJG)QXGTPOGPV$CPMCUCOGCUWTGVQUWRRQTVVJGTGEQXGT[QHDWUKPGUUGUEWUVQOGTUCHHGEVGFD[%18+&RCPFGOKECPF
adverse economic conditions.
Eb ,QWHUHVW([SHQVHV
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 3,666,452 3,558,106

&WGVQDCPMU 817,668 817,668
&WGVQFGRQUKVQTU
FGRQUKVUHTQOEWUVQOGTU 94,780,324 99,269,835
Debt securities issued 267,202 406,992
1VJGTDQTTQYKPIU 1,108,221 1,473,701
Subordinated term debts 2,644,572 3,148,935
+PVGTGUVGZRGPUGQPNGCUGNKCDKNKVKGU=0QVG
D? 859,672 341,159
Other interest expenses (1,633) (1,633)
104,142,478 109,014,763
Analysis of Net Interest Income - Bank Analysis of Net Interest Income - Group
Rs.Bn Rs.Bn
250 250
200 200
150 150
100 100
50 50
0 0
2022 2021 2022 2021
Interest Income Interest Income
Interest Expenses Interest Expenses
Net Interest Income Net Interest Income
FINANCIAL REPORTS
8 NET INTEREST INCOME (Contd.)

8 (c) Net Interest Income from Sri Lanka Government Securities
+PVGTGUVKPEQOGCPFKPVGTGUVGZRGPUGUQPKPXGUVOGPVKPIQXGTPOGPVUGEWTKVKGUCTGUWOOCTKUGFDGNQY
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Interest income
&GDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 57,200,541 59,341,634
other comprehensive income 4,129,607 5,561,098
5GEWTKVKGURWTEJCUGFWPFGTTGUCNGCITGGOGPVU 348,965 849,141
Less : Interest expenses
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU (3,666,452)
(3,558,106)

1HWLQWHUHVWLQFRPHIURP6UL/DQND*RYHUQPHQW6HFXULWLHV 58,015,109 62,229,128
9 NET FEE AND COMMISSION INCOME
#%%1706+0)21.+%;
(GGCPFEQOOKUUKQPKPEQOGCPFGZRGPUGVJCVCTGKPVGITCNVQVJGGHHGEVKXGKPVGTGUVTCVGQHCƂPCPEKCNCUUGVQTNKCDKNKV[CTGKPENWFGFKPVJG
measurement of the effective interest rate.
+HCNQCPEQOOKVOGPVKUPQVGZRGEVGFVQTGUWNVKPVJGFTCYFQYPQHCNQCPVJGPVJGTGNCVGFNQCPEQOOKVOGPVHGGKUTGEQIPKUGFQPC
UVTCKIJVNKPGDCUKUQXGTVJGEQOOKVOGPVRGTKQF
1VJGTHGGUCPFEQOOKUUKQPKPEQOGCTGTGEQIPKUGFCUHQNNQYU
• Fee and commission income earned from services that are provided over a certain period of time are accrued over that period. Fees
HQTIWCTCPVGGUCPFVTCFGTGNCVGFEQOOKUUKQPUCTGTGEQIPKUGFQPCUVTCKIJVNKPGDCUKUQXGTVJGRGTKQFQHEQPVTCEV
r (GGCPFEQOOKUUKQPKPEQOGHTQORTQXKFKPIVTCPUCEVKQPUGTXKEGUCTGTGEQIPKUGFCUCPFYJGPVJGUGTXKEGUCTGRGTHQTOGF
Other fees and commission expenses are mainly related to transaction and service fees that are expensed as and when the services are
received.
#EQPVTCEVYKVJCEWUVQOGTVJCVTGUWNVUKPCTGEQIPKUKPICƂPCPEKCNKPUVTWOGPVKPVJG)TQWRoUƂPCPEKCNUVCVGOGPVUOC[DGRCTVKCNN[KPVJG
UEQRGQH5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN+PUVTWOGPVUqCPFRCTVKCNN[YKVJKPVJGUEQRGQH5TK.CPMC#EEQWPVKPI5VCPFCTF
5.(45p4GXGPWGHTQO%QPVTCEVUYKVJ%WUVQOGTUq+PUWEJCUEGPCTKQVJG)TQWRƂTUVCRRNKGU5.(45VQUWEJUGRCTCVGEQPVTCEVCPF
OGCUWTGVJGRCTVQHVJGEQPVTCEVVJCVKUKPVJGUEQRGQH5.(45CPFVJGPCRRNKGU5.(45VQVJGTGUKFWCN

Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
(GGCPFEQOOKUUKQPKPEQOG=0QVG
D? 15,520,113 16,521,300
.GUU(GGCPFEQOOKUUKQPGZRGPUGU 345,863 619,555
Net fee and commission income 15,174,250 15,901,745
Net fee and commission income - Bank

Rs.Bn
20
15
10
0
2022 2021
Fee and commission income
Fee and commission expenses
Net fee and commission income
9 (a) Performance Obligations and Revenue Recognition Policies

(GGCPFEQOOKUUKQPKPEQOGHTQOEQPVTCEVUYKVJEWUVQOGTUKUOGCUWTGFDCUGFQPVJGEQPUKFGTCVKQPURGEKƂGFKPVJGEQPVTCEVYKVJCEWUVQOGT
6JG)TQWRTGEQIPKUGUTGXGPWGYJGPKVVTCPUHGTUEQPVTQNQXGTCUGTXKEGVQCEWUVQOGT
6JGHQNNQYKPIVCDNGRTQXKFGUKPHQTOCVKQPCDQWVVJGPCVWTGCPFVKOKPIQHUCVKUHCEVKQPQHRGTHQTOCPEGQDNKICVKQPUKPEQPVTCEVUYKVJEWUVQOGTU
KPENWFKPIUKIPKƂECPVRC[OGPVVGTOUCPFVJGTGNCVGFTGXGPWGTGEQIPKVKQPRQNKEKGU
Type of service 0CVWTGCPFVKOKPIQHUCVKUHCEVKQPQH 4GXGPWGTGEQIPKVKQPWPFGT5.(45

RGTHQTOCPEGQDNKICVKQPUKPENWFKPIUKIPKƂECPV
payment terms
6JG$CPMRTQXKFGUDCPMKPIUGTXKEGUVQTGVCKN 4GXGPWGHTQOCEEQWPVUGTXKEGCPFUGTXKEKPIHGGUKU
CPFEQTRQTCVGEWUVQOGTUKPENWFKPICEEQWPV TGEQIPKUGFQXGTVKOGCUVJGUGTXKEGUCTGRTQXKFGF
OCPCIGOGPVRTQXKUKQPQHQXGTFTCHVHCEKNKVKGU
HQTGKIPEWTTGPE[VTCPUCEVKQPUETGFKVECTFCPF (GGUHQTIWCTCPVGGUCPFVTCFGTGNCVGFEQOOKUUKQPUCTG
UGTXKEKPIHGGU TGEQIPKUGFQPCUVTCKIJVNKPGDCUKUQXGTVJGRGTKQFQH
contract.
(GGUHQTQPIQKPICEEQWPVOCPCIGOGPV 4GXGPWGTGNCVGFVQVTCPUCEVKQPUKUTGEQIPKUGFCVVJGRQKPVKP
CTGEJCTIGFVQVJGEWUVQOGToUCEEQWPVQPC VKOGYJGPVJGVTCPUCEVKQPVCMGURNCEG
4GVCKNCPFEQTRQTCVGDCPMKPI
OQPVJN[DCUKU6JG$CPMUGVUVJGTCVGUQPC
services
periodic basis.
6TCPUCEVKQPDCUGFHGGUHQTKPVGTEJCPIGHQTGKIP 4GXGPWGTGNCVGFVQVTCPUCEVKQPUKUTGEQIPKUGFCVVJGRQKPVKP
currency transactions and overdrafts are VKOGYJGPVJGVTCPUCEVKQPVCMGURNCEG
EJCTIGFVQVJGEWUVQOGToUCEEQWPVYJGPVJG
VTCPUCEVKQPVCMGURNCEG
5GTXKEKPIHGGUCTGEJCTIGFQPCOQPVJN[
basis.
FINANCIAL REPORTS
9 NET FEE AND COMMISSION INCOME (Contd.)

9 (b) Disaggregation of fee and commission income
+PVJGHQNNQYKPIVCDNGHGGCPFEQOOKUUKQPKPEQOGHTQOEQPVTCEVUYKVJEWUVQOGTUKPVJGUEQRGQH5.(45KUFKUCIITGICVGFD[OCLQTV[RGUQH
services.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
.QCPUCPFCFXCPEGUTGNCVGFUGTXKEGU 1,170,253 1,170,253

Credit and debit cards related services 5,308,536 5,308,536
Trade and remittances related services 6,058,377 6,058,377
Deposits related services 624,784 624,784
Guarantees related services 1,089,948 1,089,948
1VJGTƂPCPEKCNUGTXKEGU 1,268,215 2,269,402
Gross fee and commission income 15,520,113 16,521,300
Analysis of Net Fee and Commission Income - Bank
8% 8% 15%
11%
7%
4% 9%
2022 34% 6% 2021
37%
39%
Deposits 22%
Loans
Cards Guarantees
Trade and remittances Others
10 NET GAINS/(LOSSES) FROM TRADING
#%%1706+0)21.+%;
4GUWNVUCTKUKPIHTQOVTCFKPICEVKXKVKGUKPENWFGCNNICKPUCPFNQUUGUHTQOWPTGCNKUGFHCKTXCNWGEJCPIGUTGNCVGFECRKVCNICKPUCPFNQUUGU
FKXKFGPFKPEQOGHTQOƂPCPEKCNCUUGVUJGNFHQTVTCFKPICPFICKPU
NQUUGUHTQOTGXCNWCVKQPQHFGTKXCVKXGƂPCPEKCNKPUVTWOGPVU
&KXKFGPFKPEQOGKUTGEQIPKUGFYJGPVJG)TQWRoUTKIJVVQTGEGKXGVJGFKXKFGPFKUGUVCDNKUJGF
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVUCTGHCKTXCNWGFCVGCEJTGRQTVKPIFCVG)CKPUCPFNQUUGUCTKUKPIHTQOEJCPIGUKPHCKTXCNWGCTGKPENWFGFKP
the income statement in the period in which they arise.

Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Financial assets - Held for trading

Fixed income
0GVOCTMGFVQOCTMGVICKP
NQUU - - 485
0GVECRKVCNICKP
NQUU 17,915 351 17,915 471
Equities
0GVOCTMGFVQOCTMGVICKP
NQUU 7,756 (78,102)
0GVECRKVCNICKP - 4,086
Dividend income 19,152 27,773
'HULYDWLYH̍QDQFLDOLQVWUXPHQWV
)CKP
NQUUQPTGXCNWCVKQPQHHQTGKIPEWTTGPE[FGTKXCVKXGU
9KVJDCPMU 4,839,236
4,839,236

9KVJEWUVQOGTU 14,660 14,660
4,898,719
4,825,568

11 NET GAIN FROM FINANCIAL INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
#%%1706+0)21.+%;
0GVICKPHTQOƂPCPEKCNKPXGUVOGPVUKPENWFGUFKXKFGPFKPEQOGHTQOƂPCPEKCNKPXGUVOGPVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGT
comprehensive income.
&KXKFGPFKPEQOGKUTGEQIPKUGFYJGPVJG)TQWRoUTKIJVVQTGEGKXGVJGFKXKFGPFKUGUVCDNKUJGF
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Equities
Dividend income 22,619 23,099
22,619 23,099
FINANCIAL REPORTS
12 NET INSURANCE PREMIUM INCOME
#%%1706+0)21.+%;
r.KHGKPUWTCPEGDWUKPGUU
)TQUUYTKVVGPRTGOKWOQPNKHGKPUWTCPEGEQPVTCEVUCTGTGEQIPKUGFCUTGXGPWGYJGPCRTGOKWOKUFWGHTQOCRQNKE[JQNFGT
RQNKEKGUYKVJKP
VJGFC[ITCEGRGTKQFCTGEQPUKFGTGFCUFWG2TGOKWOUTGEGKXGFKPCFXCPEGCTGPQVTGEQTFGFCUTGXGPWGDWVTGEQTFGFCUCNKCDKNKV[
WPVKNVJGRTGOKWOKUFWGWPNGUUQVJGTYKUGVJGTGNGXCPVRQNKE[EQPFKVKQPUTGSWKTGUWEJRTGOKWOUVQDGTGEQIPKUGFCUTGXGPWG$GPGƂVU
CPFGZRGPUGUCTGRTQXKFGFCICKPUVUWEJTGXGPWGVQTGEQIPKUGRTQƂVUQXGTVJGGUVKOCVGFNKHGQHVJGRQNKEKGU
(QTUKPINGRTGOKWODWUKPGUUTGXGPWGKUTGEQIPKUGFQPVJGFCVGQPYJKEJVJGRQNKE[KUGHHGEVKXG
r0QPNKHGKPUWTCPEGDWUKPGUU
)TQUUYTKVVGPRTGOKWOQPPQPNKHGKPUWTCPEGEQORTKUGVJGVQVCNRTGOKWOUTGEGKXGFTGEGKXCDNGHQTVJGYJQNGRGTKQFQHEQXGTRTQXKFGFD[
EQPVTCEVUGPVGTGFKPVQFWTKPIVJGCEEQWPVKPIRGTKQF2TGOKWOKUIGPGTCNN[TGEQIPKUGFWRQPVJGKPEGRVKQPQHVJGRQNKE[CUYTKVVGPCPFCTG
GCTPGFRTKOCTKN[QPCRTQTCVCDCUKUQXGTVJGVGTOQHVJGTGNCVGFRQNKE[EQXGTCIG
• Reinsurance premiums
)TQUUTGKPUWTCPEGRTGOKWOUQPKPUWTCPEGEQPVTCEVUCTGTGEQIPKUGFCUCPGZRGPUGQPVJGGCTNKGTQHVJGFCVGYJGPRTGOKWOUCTGRC[CDNG
QTYJGPVJGRQNKE[DGEQOGUGHHGEVKXG8CNWGQHVJGTGKPUWTCPEGRTGOKWOUCTGFGEKFGFDCUGFQPTCVGUCITGGFYKVJTGKPUWTGTU
r0GVEJCPIGKPTGUGTXGHQTWPGCTPGFRTGOKWO
)TQUU9TKVVGP2TGOKWO
)92QHIGPGTCNDWUKPGUUKUFGHGTTGFQXGTVJGVGTOQHVJGWPFGTN[KPIRQNKEKGUoTKUMCVVCEJGFRGTKQFCEEQTFKPIVQ
VJG4GIWNCVKQPQH+PUWTCPEG+PFWUVT[#EV0QQHCPFUWDUGSWGPVCOGPFOGPVUVJGTGVQ7PGCTPGFRTGOKWOUCTGVJGRTQRQTVKQPQH
RTGOKWOUVJCVTGNCVGVQVJGRGTKQFQHTKUMCHVGTVJGTGURGEVKXGTGRQTVKPIRGTKQF)TQWRWUGUVJDCUKUVQFGHGTVJG)92QHCNNRQNKEKGU
GZEGRVHQTVJGOCTKPGKPUWTCPEGRQNKEKGUCPFVKVNGKPUWTCPEGRQNKEKGUYJGTGOCTKPGKPUWTCPEGRTGOKWOUCTGFGHGTTGFDCUGFQP
DCUKUCPFVQVCNRTGOKWOUQPVKVNGKPUWTCPEGCTGVTCPUHGTTGFVQTGUGTXGHQTVKVNGKPUWTCPEGHQTVJGTGRQTVKPIRGTKQF
Group
For the year ended 31st December b b
Rs 000 Rs 000
Gross insurance premium income 15,300,741

Premium ceded to reinsurers (2,164,702)

1HWZULWWHQSUHPLXP 13,136,039
0GVEJCPIGKPTGUGTXGHQTWPGCTPGFRTGOKWO (385,557)

1HWLQVXUDQFHSUHPLXPLQFRPH>1RWHD@b 12,750,482

12 (a) Net Insurance Premium income
Gross insurance Premium ceded Net insurance

premium income to insurers premium income
For the year ended 31st December 2022 2021 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Life Insurance
Individual policies 7,266,600 (242,771)
7,023,829
Corporate policies 391,181 (55,473)
335,708

5KPINGRTGOKWO 1,217,620 (174,768)
1,042,852
*URVVZULWWHQSUHPLXPOLIHLQVXUDQFHb 8,875,401 (473,012)
8,402,389
General Insurance
Fire 965,140 (914,763)
50,377
Motor 4,217,856 (176,934)
4,040,922
Marine 158,297 (146,234)
12,063
Miscellaneous 1,084,047 (453,759)
630,288
*URVVZULWWHQSUHPLXPJHQHUDOLQVXUDQFHb 6,425,340 (1,691,690)
4,733,650
1HWFKDQJHLQUHVHUYHVIRUXQHDUQHG
premium - - (385,557)

b 15,300,741 (2,164,702)
12,750,482
13 NET GAINS ARISING ON DE-RECOGNITION OF FINANCIAL ASSETS
#%%1706+0)21.+%;
#URGT5.(45p0GVICKPUCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVUqEQORTKUGUQHCNNTGCNKUGFICKPUCPFNQUUGUTGNCVKPIVQFGDV
KPUVTWOGPVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUV
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
)QXGTPOGPV5GEWTKVKGU - -
Net capital gain - -
FINANCIAL REPORTS
14 NET OTHER OPERATING INCOME
#%%1706+0)21.+%;
1VJGTQRGTCVKPIKPEQOGKPENWFGUTGPVCNKPEQOGFKXKFGPFKPEQOGHTQOITQWRGPVKVKGUICKPUQPFKURQUCNQHRTQRGTV[RNCPVCPF
GSWKROGPVCPFHQTGKIPGZEJCPIGICKPUCPFNQUUGU
• Rental income
4GPVCNKPEQOGKUTGEQIPKUGFQPCPCEETWCNDCUKU
ˀ'LYLGHQGLQFRPHIURPVXEVLGLDULHVDQGMRLQWYHQWXUH
&KXKFGPFKPEQOGHTQOUWDUKFKCTKGUCPFLQKPVXGPVWTGKUTGEQIPKUGFYJGPVJG$CPMoUTKIJVVQTGEGKXGVJGFKXKFGPFKUGUVCDNKUJGF
• Gains and losses on disposal of assets
0GVICKPUCPFNQUUGUCTKUKPIHTQOVJGFKURQUCNQHRTQRGTV[RNCPVCPFGSWKROGPVCPFQVJGTPQPEWTTGPVCUUGVUKPENWFKPIKPXGUVOGPVUKP
UWDUKFKCTKGULQKPVXGPVWTGUCPFCUUQEKCVGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVCHVGTFGFWEVKPIHTQOVJGRTQEGGFUQPFKURQUCNVJG
ECTT[KPICOQWPVQHUWEJCUUGVUCPFVJGTGNCVGFUGNNKPIGZRGPUGU
• Foreign exchange gain
(QTGKIPEWTTGPE[RQUKVKQPUCTGTGXCNWGFCVGCEJTGRQTVKPIFCVG)CKPUCPFNQUUGUCTKUKPIVJTQWIJTGXCNWCVKQPCTGKPENWFGFKPVJGKPEQOG
statement in the period in which they arise.
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Dividend income from subsidiaries and joint venture 287,933 -
(QTGKIPGZEJCPIGICKP
9KVJDCPMU 11,598,865 11,989,821
9KVJEWUVQOGTU 2,693,994 2,693,994
)CKPQPFKURQUCNQHRTQRGTV[RNCPVCPFGSWKROGPV
PGV 9,695 12,114
Rental income 12,520 252,050
Rental income from investment properties 103,737 197,160
Recovery of loans written off in prior years 169,459 218,133
Recovery of operational losses provided for in prior years 5,655 5,655
Miscellaneous 69,828 438,726
14,951,686 15,807,653
(QTGKIPGZEJCPIGICKP
NQUUTGRTGUGPVUDQVJTGXCNWCVKQPICKP
NQUUQPVJG$CPMoUPGVQRGPRQUKVKQPCPFICKP
NQUUQPHQTGKIPGZEJCPIG
EQPVTCEVU)CKPUQPTGXCNWCVKQPQHHQTGKIPEWTTGPE[FGTKXCVKXGUCOQWPVKPIVQ4U/P
.QUUQH4U/PKUTGRQTVGFWPFGT0QVG
o0GVICKP
NQUUHTQOVTCFKPIoCUTGSWKTGFD[VJG5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN+PUVTWOGPVUq#EEQTFKPIN[VQVCNGZEJCPIG
KPEQOGQHVJG$CPMCPFVJG)TQWRHQTVJG[GCTGPFGFUV&GEGODGTCOQWPVGFVQ4U/PCPF4U/PTGURGEVKXGN[

$CPM4U/PCPF)TQWR4U/P

,03$,50(17&+$5*()25/2$16$1'27+(5/266(6b
#%%1706+0)21.+%;
6JG)TQWRTGEQIPKUGUKORCKTOGPVRTQXKUKQPUHQTƂPCPEKCNCUUGVUKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN
+PUVTWOGPVUq6JGCEEQWPVKPIRQNKE[CFQRVGFKPFGVGTOKPKPIUCOGKUIKXGPKP0QVG
DVQVJGƂPCPEKCNUVCVGOGPVU6JGUGƂPCPEKCN
CUUGVUKPENWFGECUJCPFECUJGSWKXCNGPVURNCEGOGPVUYKVJDCPMUƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGU
VQEWUVQOGTUFGDVCPFQVJGTƂPCPEKCNCUUGVUECTTKGFCVCOQTVKUGFEQUVFGDVKPUVTWOGPVUCPFQVJGTƂPCPEKCNCUUGVUECTTKGFCVHCKT
XCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFNQCPEQOOKVOGPVUCPFƂPCPEKCNIWCTCPVGGEQPVTCEVU6JGOGVJQFQNQI[CFQRVGFHQT
KORCKTOGPVCUUGUUOGPVKUGZRNCKPGFKP0QVG
DKKVQVJGƂPCPEKCNUVCVGOGPVU(WTVJGT)TQWRTGEQIPKUGUCPKORCKTOGPVNQUUYJGPVJG
ECTT[KPICOQWPVQHCPQPƂPCPEKCNCUUGVGZEGGFUVJGGUVKOCVGFTGEQXGTCDNGCOQWPVHTQOVJCVCUUGV0QKORCKTOGPVNQUUKUTGEQIPKUGFQP
GSWKV[KPXGUVOGPVU
6JGVCDNGDGNQYUJQYUVJGGZRGEVGFETGFKVNQUUEJCTIGUQPƂPCPEKCNCUUGVUCPFKORCKTOGPVEJCTIGUQPPQPƂPCPEKCNCUUGVUTGEQTFGFKPVJG
KPEQOGUVCVGOGPV
Bank
For the year ended 31st December 2022 2021

Stage 1 Stage 2 Stage 3 Other Total Stage 1 Stage 2 Stage 3 Other Total
,PSDLUPHQWFKDUJHUHYHUVDORQ̍QDQFLDO
assets measured at amortised cost
%CUJCPFECUJGSWKXCNGPVU 194,133 - - - 194,133

2NCEGOGPVUYKVJDCPMU 12,138 - - - 12,138
.QCPUCPFCFXCPEGU 5,784,375 5,339,312 17,895,359 - 29,019,046
Debt instruments (10,728,883) 69,641,596 50,951 - 58,963,664

DVVHWVPHDVXUHGDWIDLUYDOXHWKURXJK
Debt instruments (295,445) - - - (295,445)
+ORCKTOGPVEJCTIG
TGXGTUCNQPNQCPEQOOKVOGPVU
CPFƂPCPEKCNIWCTCPVGGEQPVTCEVU 1,778,367 362,578 76,596 - 2,217,541

+ORCKTOGPVEJCTIGQPRTQRGTV[RNCPVCPFGSWKROGPV
KPVCPIKDNGCUUGVUCPFRTGRC[OGPVU - - - - -
1VJGTKORCKTOGPVEJCTIGU - - 350,228 - 350,228
(3,255,315) 75,343,486 18,373,134 - 90,461,305
+ORCKTOGPVEJCTIGUTGEQIPKUGFCICKPUVNQCPUCPFCFXCPEGUKPENWFGVJGRQUVOQFGNCFLWUVOGPVUOCFGQWVUKFG'%.OQFGNWUKPIXCTKQWU
UVTGUUVGUVKPIVGEJPKSWGUKPQTFGTVQCFFTGUUVJGRQVGPVKCNKORNKECVKQPUQHRTGXCKNKPICFXGTUGGEQPQOKEEQPFKVKQPUEQPVKPWKPIKORNKECVKQPUQH
%18+&QWVDTGCMCPFVJGTGUWNVCPVOQTCVQTKWOUEJGOGUKPVTQFWEGFD[VJGIQXGTPOGPV$CPM
.
FINANCIAL REPORTS
15 IMPAIRMENT CHARGE FOR LOANS AND OTHER LOSSES (Contd.)

Group

Stage 1 Stage 2 Stage 3 Other Total Stage 1 Stage 2 Stage 3 Other Total
,PSDLUPHQWFKDUJHUHYHUVDORQ)LQDQFLDO
assets measured at amortised cost
%CUJCPFECUJGSWKXCNGPVU 194,157 - - - 194,157

2NCEGOGPVUYKVJDCPMU 12,476 - - - 12,476

.QCPUCPFCFXCPEGU 7,063,302 5,336,892 17,864,736 - 30,264,930
Debt instruments (10,728,276) 69,641,596 50,951 - 58,964,271

DVVHWVPHDVXUHGDWIDLUYDOXHWKURXJK
Debt instruments (295,445) - - - (295,445)
+ORCKTOGPVEJCTIG
TGXGTUCNQPNQCPEQOOKVOGPVU
CPFƂPCPEKCNIWCTCPVGGEQPVTCEVU 1,778,367 362,578 76,597 - 2,217,542

+ORCKTOGPVEJCTIGQPRTQRGTV[RNCPVCPFGSWKROGPV
KPVCPIKDNGCUUGVUCPFRTGRC[OGPVU - - - - -
1VJGTKORCKTOGPVEJCTIGU - - 377,741 - 377,741
(1,975,419) 75,341,066 18,370,025 - 91,735,672
16 PERSONNEL EXPENSES
#%%1706+0)21.+%;
2GTUQPPGNGZRGPUGUKPENWFGUCNCTKGUCPFDQPWUVGTOKPCNDGPGƂVEJCTIGUCPFQVJGTTGNCVGFGZRGPUGU5JQTVVGTOGORNQ[GGDGPGƂV
QDNKICVKQPUCTGOGCUWTGFQPCPWPFKUEQWPVGFDCUKUCPFCTGGZRGPUGFCUVJGTGNCVGFUGTXKEGKURTQXKFGF#NKCDKNKV[KUTGEQIPKUGFHQT
VJGCOQWPVGZRGEVGFVQDGRCKFWPFGTUJQTVVGTOECUJDQPWUQTRTQƂVUJCTKPIRNCPUKHVJG)TQWRJCUCRTGUGPVNGICNQTEQPUVTWEVKXG
QDNKICVKQPVQRC[VJKUCOQWPVCUCTGUWNVQHRCUVUGTXKEGRTQXKFGFD[VJGGORNQ[GGCPFVJGQDNKICVKQPECPDGGUVKOCVGFTGNKCDN[
'ORNQ[GGUCTGGNKIKDNGHQT'ORNQ[GGUo2TQXKFGPV(WPF
'2(EQPVTKDWVKQPUCPF'ORNQ[GGUo6TWUV(WPF
'6(EQPVTKDWVKQPUKPCEEQTFCPEG
YKVJVJGTGURGEVKXGUVCVWVGUCPFTGIWNCVKQPU
&GƂPGFDGPGƂVRNCPEQPVTKDWVKQPUCPFEJCPIGUKPVJGNKCDKNKVKGUHQT'2(KPVGTGUVIWCTCPVGGCPFCEEWOWNCVGFNGCXGCTGTGEQIPKUGFKPVJG
KPEQOGUVCVGOGPVDCUGFQPCEVWCTKCNXCNWCVKQPUECTTKGFQWVKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp'ORNQ[GG
$GPGƂVUq
6JG)TQWRoUPGVQDNKICVKQPVQVJGRGPUKQPHWPFITCVWKV['2(KPVGTGUVIWCTCPVGGCPFWPWVKNK\GFCEEWOWNCVGFCPPWCNNGCXGCTGFKUENQUGF
WPFGT0QVGVQVJGƂPCPEKCNUVCVGOGPVU
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Salaries and bonus 12,637,018 15,646,520
%QPVTKDWVKQPUVQ'ORNQ[GGUo2TQXKFGPV(WPF
'2( 898,035 1,172,828
%QPVTKDWVKQPUVQ'ORNQ[GGUo6TWUV(WPF
'6( 224,509 293,207
2TQXKUKQPHQTFGƂPGFDGPGƂVRNCP
TGXGTUCNEJCTIGHWPFGF=0QVG
C? 609,248
609,248

+PETGCUGKPNKCDKNKV[HQT'2(KPVGTGUVIWCTCPVGG=0QVG
F? 3,680 3,680
+PETGCUG
FGETGCUGKPNKCDKNKV[HQTCEEWOWNCVGFNGCXG=0QVG
G? 26,596 26,596
2TQXKUKQPHQTFGƂPGFDGPGƂVRNCPWPHWPFGF=0QVG
I? - 111,649
Others 626,802 626,802
15,025,888 18,490,530

D 3URYLVLRQIRU'ȞQHG%HQȞW3ODQ)XQGHG
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
%WTTGPVUGTXKEGEQUV=0QVG
EKKK? 746,605 746,605
0GVKPVGTGUVQPFGƂPGFDGPGƂV
CUUGVNKCDKNKV[=0QVG
EX? (137,357) (137,357)
2CUVUGTXKEGDGPGƂV=0QVG
EKKK? -
-

609,248
609,248

E 3DVW6HUYLFH%HQȞW
9KVJVJGKORNGOGPVCVKQPQHVJGRTQXKUKQPUQH/KPKOWO#IGQH9QTMGTU#EV0QQHFWTKPIVJG[GCTGPFGFUV&GEGODGT$CPM
TGXKUGFVJGOKPKOWOTGVKTGOGPVCIGQHKVUGORNQ[GGUCUHQNNQYU
#IGQHGORNQ[GG
#UCVVJ0QXGODGT /KPKOWO4GVKTGOGPV#IG
54 or above and below 55 years 57 Years

$GNQY[GCTU ;GCTU
6JGCDQXGTGXKUKQPYCUECRVWTGFCUCRNCPCOGPFOGPVKPCEEQTFCPEGYKVJ.-#5KPVJGCEVWCTKCNXCNWCVKQPCUCVUV&GEGODGT
YJKEJTGUWNVGFKPCRCUVUGTXKEGDGPGƂVQH4U/PYJKEJYCUTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVFWTKPIVJG[GCTGPFGFUV&GEGODGT
2021.
17 BENEFITS, CLAIMS AND UNDERWRITING EXPENDITURE
#%%1706+0)21.+%;
$GPGƂVUCPFENCKOUHQTKPUWTCPEGEQPVTCEVUKPENWFGVJGEQUVQHCNNENCKOUCTKUKPIFWTKPIVJG[GCTKPENWFKPIKPVGTPCNCPFGZVGTPCNENCKOU
JCPFNKPIEQUVUVJCVCTGFKTGEVN[TGNCVGFVQVJGRTQEGUUKPICPFUGVVNGOGPVQHENCKOUCPFCTGTGEQTFGFPGVQHTGEQXGTKGUHTQOTGKPUWTCPEGQP
claims.
ˀ%HQH̍WVDQGFODLPVSDLG/LIHLQVXUDQFHb
%NCKOUQPCEEKFGPVJQURKVCNKUCVKQPFGCVJCPFOCVWTKV[CTGEJCTIGFQPPQVKƂECVKQPQHFGCVJQTQPGZRKT[QHVJGVGTO6JGKPVGTKO
payments and surrenders are accounted for only at the time of settlement.
ˀ%HQH̍WVDQGFODLPVSDLG1RQOLIHLQVXUDQFHbb
)GPGTCNKPUWTCPEGENCKOUKPENWFGCNNENCKOUQEEWTTGFFWTKPIVJG[GCTYJGVJGTTGRQTVGFQTPQVVQIGVJGTYKVJENCKOUJCPFNKPIEQUVUVJCVCTG
FKTGEVN[TGNCVGFVQVJGRTQEGUUKPICPFUGVVNGOGPVQHENCKOUTGFWEVKQPUHQTVJGXCNWGQHUCNXCIGCPFQVJGTTGEQXGTKGU
ˀ5HLQVXUDQFHFODLPVbb
4GKPUWTCPEGQPENCKOUCTGTGEQIPKUGFYJGPVJGTGNCVGFITQUUKPUWTCPEGENCKOUCTGTGEQIPKUGFCEEQTFKPIVQVJGVGTOUQHVJGTGNGXCPV
contract.
ˀ8QGHUZULWLQJDQGQHWDFTXLVLWLRQFRVWb
'ZRGPUGUHQTCESWKUKVKQPCPFOCKPVGPCPEGQHNKHGCPFIGPGTCNKPUWTCPEGDWUKPGUUCTGCEEQWPVGFHQTPGVQHTGKPUWTCPEGEQOOKUUKQPQP
CEETWCNDCUKU4GKPUWTCPEGEQOOKUUKQPKPEQOGKUCEETWGFCEEQTFKPIVQVJGCITGGFVGTOUYKVJVJGTGKPUWTGTU
FINANCIAL REPORTS
17 BENEFITS, CLAIMS AND UNDERWRITING EXPENDITURE (Contd.)
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
Deferred acquisition expenses

#ESWKUKVKQPGZRGPUGUTGRTGUGPVKPIEQOOKUUKQPUYJKEJXCT[YKVJCPFCTGFKTGEVN[TGNCVGFVQVJGRTQFWEVKQPQHDWUKPGUUCTGFGHGTTGFCPF
amortised over the period in which the related written premiums are earned. Reinsurance commission is also treated in the same manner
YKVJFGHGTTGFCESWKUKVKQPEQUVU
Group
Rs 000 Rs 000
0GVKPUWTCPEGDGPGƂVUCPFENCKOURCKF=0QVG
C? 5,408,276
0GVEJCPIGKPKPUWTCPEGENCKOUQWVUVCPFKPI 145,419
%JCPIGKPEQPVTCEVNKCDKNKVKGUNKHGHWPF 4,340,103
7PFGTYTKVKPICPFPGVCESWKUKVKQPEQUVU 1,821,540
11,715,338
D 1HWLQVXUDQFHEHQȞWVDQGFODLPVSDLG
Group
b*URVV 5HFRYHU\ Net b*URVV 5HFRYHU\ Net
Claims from Claims Claims from Claims
3DLGb Reinsurers Paid 3DLGb Reinsurers Paid
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Life Insurance
%NCKOUFGCVJUFKUCDKNKV[CPFJQURKVCNKUCVKQP 557,805 (210,879) 346,926

Surrenders 600,536 - 600,536
Annuity payments 12,767 - 12,767
Policy maturities 1,264,181 - 1,264,181
Net life insurance claims 2,435,289 (210,879) 2,224,410

Non-life Insurance
Fire 326,523 (285,308) 41,215

Motor 2,660,477 (21,421) 2,639,056

Marine 43,883 (25,496) 18,387

Miscellaneous 548,595 (63,387) 485,208

1HWQRQOLIHLQVXUDQFHFODLPVb 3,579,478 (395,612) 3,183,866

7RWDOQHWLQVXUDQFHEHQH̍WVDQGFODLPVSDLG 6,014,767 (606,491) 5,408,276


18 OTHER EXPENSES
#%%1706+0)21.+%;
1VJGTQRGTCVKPIGZRGPUGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVQPVJGDCUKUQHCFKTGEVCUUQEKCVKQPDGVYGGPVJGEQUVKPEWTTGFCPF
VJGGCTPKPIQHURGEKƂEKVGOUQHKPEQOG#NNGZRGPFKVWTGKPEWTTGFKPVJGTWPPKPIQHVJGDWUKPGUUCPFOCKPVCKPKPIVJGRTQRGTV[RNCPVCPF
GSWKROGPVKPCUVCVGQHGHƂEKGPE[JCUDGGPEJCTIGFVQVJGKPEQOGUVCVGOGPVKPCTTKXKPICVVJGRTQƂVHQTVJG[GCT2TQXKUKQPUKPTGURGEVQH
QVJGTGZRGPUGUCTGTGEQIPKUGFYJGPVJG)TQWRJCUCRTGUGPVQDNKICVKQP
NGICNQTEQPUVTWEVKXGCUCTGUWNVQHCRCUVGXGPVKVKURTQDCDNG
VJCVCPQWVƃQYQHTGUQWTEGUGODQF[KPIGEQPQOKEDGPGƂVUYKNNDGTGSWKTGFVQUGVVNGVJGQDNKICVKQPCPFCTGNKCDNGGUVKOCVGECPDGOCFG
QHVJGCOQWPVQHVJGQDNKICVKQP
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
&KTGEVQTUoGOQNWOGPVU$QCTFTGNCVGFHGGUQPN[ 42,170 73,100

#FXGTVKUKPICPFTGNCVGFGZRGPUGU 288,449 495,653
#WFKVQTUoTGOWPGTCVKQP=0QVG
C? 23,875 42,094
$WUKPGUURTQOQVKQPCPFRTQFWEVGZRGPUGU 707,055 707,055
Crop insurance levy 150,000 152,351
Debenture issue expenses - -
Deposit insurance premium 1,276,819 1,276,819
&GRTGEKCVKQPCPFCOQTVKUCVKQP=0QVG
D? 2,567,704 3,187,685
&KTGEVQRGTCVKPIGZRGPUGUQPKPXGUVOGPVRTQRGTV[ - 19,400
Donations 28,837 29,567
.GICNGZRGPUGUCPFRTQHGUUKQPCNHGGU 228,525 248,136
1HƂEGCFOKPKUVTCVKQPCPFGUVCDNKUJOGPVGZRGPUGU 8,617,134 10,821,799
1RGTCVKQPCNTKUMGXGPVNQUUGU 33,055 33,055
Other overhead expenses 1,398,056 2,510,937
15,361,679 19,597,651
18 (a) Auditors’ Remuneration
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Audit fees and expenses 18,021 28,950

Audit related fee and expenses 2,890 6,601
0QPCWFKVGZRGPUGU 2,964 6,543
23,875 42,094
18 (b) Depreciation and amortisation expenses
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
&GRTGEKCVKQPQHKPXGUVOGPVRTQRGTV[
0QVG 5,335 29,305
&GRTGEKCVKQPQHRTQRGTV[RNCPVCPFGSWKROGPV
0QVG 1,287,867 1,782,933
#OQTVKUCVKQPQHTKIJVQHWUGCUUGVU
0QVG 865,228 871,892
#OQTVKUCVKQPQHKPVCPIKDNGCUUGVU
0QVG 409,274 503,555
2,567,704 3,187,685
FINANCIAL REPORTS
19 TAXES ON FINANCIAL SERVICES
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
8CNWG#FFGF6CZQPƂPCPEKCNUGTXKEGU 4,932,774 5,070,791

5QEKCN5GEWTKV[%QPVTKDWVKQP.GX[ 168,598 176,825
5,101,372 5,247,616
D 9DOXH$GGHG7D[9$7RQ)LQDQFLDO6HUYLFHV

6JGDCUGQHVJGECNEWNCVKQPQH8CNWG#FFGF6CZ
8#6QPƂPCPEKCNUGTXKEGUKUVJGXCNWGCFFKVKQPCVVTKDWVCDNGVQƂPCPEKCNUGTXKEGUYJKEJKPENWFGU
QRGTCVKPIRTQƂVDGHQTG8#6QPƂPCPEKCNUGTXKEGUCFLWUVGFHQTGOQNWOGPVUQHGORNQ[GGUCPFGEQPQOKEFGRTGEKCVKQP
8#6TCVGCRRNKGFFWTKPIYCU

E 6RFLDO6HFXULW\&RQWULEXWLRQ/HY\66&/
5QEKCN5GEWTKV[%QPVTKDWVKQP.GX[ECOGKPVQGHHGEVHTQOUV1EVQDGT6JGDCUGQHVJGECNEWNCVKQPQH5QEKCN5GEWTKV[%QPVTKDWVKQP.GX[KU
VJGXCNWGCFFKVKQPCVVTKDWVCDNGVQƂPCPEKCNUGTXKEGUYJKEJKPENWFGUQRGTCVKPIRTQƂVDGHQTGVCZGUQPƂPCPEKCNUGTXKEGUCFLWUVGFHQTGOQNWOGPVU
QHGORNQ[GGUCPFGEQPQOKEFGRTGEKCVKQP55%.TCVGCRRNKGFFWTKPIYCU
6+$5(2)352),72)-2,179(1785(1(72),1&20(7$;b
#%%1706+0)21.+%;
6JGRQNKE[CFQRVGFKPCEEQWPVKPIHQTLQKPVXGPVWTGKPXGUVOGPVUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
6JGCIITGICVGQHVJG)TQWRoUUJCTGQHRTQƂVQTNQUUQHVJGLQKPVXGPVWTGKUUJQYPQPVJGHCEGQHVJGKPEQOGUVCVGOGPVQWVUKFGQRGTCVKPI
RTQƂVCPFTGRTGUGPVU)TQWRoUUJCTGQHRTQƂVQTNQUUCHVGTVCZCPFPQPEQPVTQNNKPIKPVGTGUVUKPVJGUWDUKFKCTKGUQHVJGLQKPVXGPVWTG
Group
Rs 000 Rs 000
5JCTGQHRTQƂVQHLQKPVXGPVWTGDGHQTGKPEQOGVCZ 473,264

+PEQOGVCZQPUJCTGQHQRGTCVKPITGUWNVUQHLQKPVXGPVWTG=
EJCTIGTGXGTUCN? (141,291)

6KDUHRISUR̍WRIMRLQWYHQWXUHQHWRILQFRPHWD[>1RWHE@ 331,973

,1&20(7$;(;3(16(b
#%%1706+0)21.+%;
+PEQOGVCZGZRGPUGEQORTKUGUQHEWTTGPVCPFFGHGTTGFVCZ+PEQOGVCZGZRGPUGKUTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVGZEGRVVQVJGGZVGPV
KVTGNCVGUVQKVGOUTGEQIPKUGFFKTGEVN[KP1VJGT%QORTGJGPUKXG+PEQOG
1%+KPYJKEJECUGKVKUTGEQIPKUGFKP1%+6JG)TQWRCRRNKGF+(4+%
p7PEGTVCKPV[1XGT+PEQOG6CZ6TGCVOGPVq
+(4+%KPFGVGTOKPCVKQPQHVCZCDNGRTQƂVVCZDCUGUWPWUGFVCZNQUUGUWPWUGFVCZETGFKVU
CPFVCZTCVGUYJGPVJGTGKUWPEGTVCKPV[QXGTVJGKPEQOGVCZVTGCVOGPV*QYGXGTVJGCRRNKECVKQPQH+(4+%FKFPQVJCXGCP[UKIPKƂECPV
KORCEVQPVJGƂPCPEKCNUVCVGOGPVUQHVJG)TQWRVQRTQXKFGCFFKVKQPCNFKUENQUWTGUKPVJGƂPCPEKCNUVCVGOGPVU
Current Tax
Current tax assets and liabilities consist of amounts expected to be recovered from or paid to the taxation authorities in respect of current
year as well as any adjustment to the tax payable or receivable in respect of previous years. The tax rates and tax laws used to compute the
COQWPVQHEWTTGPVVCZCUUGVUCPFNKCDKNKVKGUCTGVJQUGVJCVCTGGPCEVGFQTUWDUVCPVKXGN[GPCEVGFQPVJGTGRQTVKPIFCVG
%WTTGPVKPEQOGVCZTGNCVKPIVQKVGOUTGEQIPKUGFFKTGEVN[KPGSWKV[KUTGEQIPKUGFKPGSWKV[CPFPQVKPVJGKPEQOGUVCVGOGPV/CPCIGOGPV
RGTKQFKECNN[GXCNWCVGURQUKVKQPUVCMGPKPVJGVCZTGVWTPUYKVJTGURGEVVQUKVWCVKQPUKPYJKEJCRRNKECDNGVCZTGIWNCVKQPUCTGUWDLGEVVQ
interpretation and establishes provisions where appropriate.
/CPCIGOGPVJCUWUGFKVULWFIGOGPVQPVJGCRRNKECVKQPQHVCZNCYKPENWFKPIVTCPUHGTRTKEKPITGIWNCVKQPUKPXQNXKPIKFGPVKƂECVKQPQH
CUUQEKCVGFWPFGTVCMKPIGUVKOCVKQPQHTGURGEVKXGCTOoUNGPIVJRTKEGUCPFUGNGEVKQPQHCRRTQRTKCVGRTKEKPIOGEJCPKUO
'HIHUUHG7D[bb
&GHGTTGFVCZKUTGEQIPKUGFQPVGORQTCT[FKHHGTGPEGUCVVJGTGRQTVKPIFCVGDGVYGGPVJGVCZDCUGQHCUUGVUCPFNKCDKNKVKGUCPFVJGKTECTT[KPI
COQWPVUHQTƂPCPEKCNTGRQTVKPIRWTRQUGU
&GHGTTGFVCZNKCDKNKVKGUCTGTGEQIPKUGFHQTCNNVCZCDNGVGORQTCT[FKHHGTGPEGUGZEGRV
r 9JGPVJGFGHGTTGFVCZNKCDKNKV[CTKUGUHTQOVJGKPKVKCNTGEQIPKVKQPQHIQQFYKNNQTCPCUUGVQTNKCDKNKV[KPCVTCPUCEVKQPVJCVKUPQVCDWUKPGUU
EQODKPCVKQPCPFCVVJGVKOGQHVJGVTCPUCEVKQPCHHGEVUPGKVJGTVJGCEEQWPVKPIRTQƂVPQTVCZCDNGRTQƂVQTNQUU
r +PTGURGEVQHVCZCDNGVGORQTCT[FKHHGTGPEGUCUUQEKCVGFYKVJKPXGUVOGPVUKPUWDUKFKCTKGUCUUQEKCVGUCPFKPVGTGUVUKPLQKPVXGPVWTGUYJGP
VJGVKOKPIQHVJGTGXGTUCNQHVJGVGORQTCT[FKHHGTGPEGUECPDGEQPVTQNNGFCPFKVKURTQDCDNGVJCVVJGVGORQTCT[FKHHGTGPEGUYKNNPQV
reverse in the foreseeable future.
r &GHGTTGFVCZCUUGVUCTGTGEQIPKUGFHQTCNNFGFWEVKDNGVGORQTCT[FKHHGTGPEGUECTT[HQTYCTFQHWPWUGFVCZETGFKVUCPFWPWUGFVCZNQUUGU

KHCP[VQVJGGZVGPVVJCVKVKURTQDCDNGVJCVVCZCDNGRTQƂVYKNNDGCXCKNCDNGCICKPUVYJKEJVJGFGFWEVKDNGVGORQTCT[FKHHGTGPEGUCPFVJG
WPWUGFVCZETGFKVUCPFWPWUGFVCZNQUUGUECTTKGFHQTYCTFECPDGWVKNKUGFGZEGRV
r 9JGPVJGFGHGTTGFVCZCUUGVTGNCVKPIVQVJGFGFWEVKDNGVGORQTCT[FKHHGTGPEGCTKUGUHTQOVJGKPKVKCNTGEQIPKVKQPQHCPCUUGVQTNKCDKNKV[KPC
VTCPUCEVKQPVJCVKUPQVCDWUKPGUUEQODKPCVKQPCPFCVVJGVKOGQHVJGVTCPUCEVKQPCHHGEVUPGKVJGTVJGCEEQWPVKPIRTQƂVPQTVCZCDNGRTQƂV
or loss
r +PTGURGEVQHFGFWEVKDNGVGORQTCT[FKHHGTGPEGUCUUQEKCVGFYKVJKPXGUVOGPVUKPUWDUKFKCTKGUCUUQEKCVGUCPFKPVGTGUVUKPLQKPVXGPVWTGU
FGHGTTGFVCZCUUGVUCTGTGEQIPKUGFQPN[VQVJGGZVGPVVJCVKVKURTQDCDNGVJCVVJGVGORQTCT[FKHHGTGPEGUYKNNTGXGTUGKPVJGHQTGUGGCDNG
HWVWTGCPFVCZCDNGRTQƂVYKNNDGCXCKNCDNGCICKPUVYJKEJVJGVGORQTCT[FKHHGTGPEGUECPDGWVKNKUGF
6JGECTT[KPICOQWPVQHFGHGTTGFVCZCUUGVKUTGXKGYGFCVGCEJTGRQTVKPIFCVGCPFTGFWEGFVQVJGGZVGPVVJCVKVKUPQNQPIGTRTQDCDNGVJCV
UWHƂEKGPVVCZCDNGRTQƂVYKNNDGCXCKNCDNGVQCNNQYCNNQTRCTVQHVJGFGHGTTGFVCZCUUGVVQDGWVKNKUGF7PTGEQIPKUGFFGHGTTGFVCZCUUGVUCTG
TGCUUGUUGFCVGCEJTGRQTVKPIFCVGCPFCTGTGEQIPKUGFVQVJGGZVGPVVJCVKVJCUDGEQOGRTQDCDNGVJCVHWVWTGVCZCDNGRTQƂVUYKNNCNNQYVJG
deferred tax asset to be recovered.
&GHGTTGFVCZCUUGVUCPFNKCDKNKVKGUCTGOGCUWTGFCVVJGVCZTCVGUVJCVCTGGZRGEVGFVQCRRN[KPVJG[GCTYJGPVJGCUUGVKUTGCNKUGFQTVJG
NKCDKNKV[KUUGVVNGFDCUGFQPVCZTCVGU
CPFVCZNCYUVJCVJCXGDGGPGPCEVGFQTUWDUVCPVKXGN[GPCEVGFCVVJGTGRQTVKPIFCVG
&GHGTTGFVCZTGNCVKPIVQKVGOUTGEQIPKUGFFKTGEVN[KPGSWKV[CTGCNUQTGEQIPKUGFKPGSWKV[VJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFPQVKP
the income statement.
&GHGTTGFVCZCUUGVUCPFFGHGTTGFVCZNKCDKNKVKGUCTGQHHUGVKHCNGICNN[GPHQTEGCDNGTKIJVGZKUVUVQUGVQHHEWTTGPVVCZCUUGVUCICKPUVEWTTGPVVCZ
liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
6GORQTCT[FKHHGTGPEGUKPTGNCVKQPVQCTKIJVQHWUGCUUGVUCPFNKCDKNKV[HQTQRGTCVKPINGCUGUCTGTGICTFGFCUPGVRCEMCIG
QRGTCVKPINGCUG
TKIJVUHQTVJGRWTRQUGQHTGEQIPKUKPIFGHGTTGFVCZ
#EEQTFKPIN[RTQXKUKQPHQTVCZCVKQPKUOCFGQPVJGCEEQWPVKPIRTQƂVHQTVJG[GCTCUCFLWUVGFHQTVCZCVKQPRWTRQUGUKPCEEQTFCPEGYKVJVJG
RTQXKUKQPUQHVJGCRRNKECDNG+PNCPF4GXGPWG#EV+PGUVKOCVKPIVJGRTQXKUKQPHQTVCZCVKQPVJG)TQWRJCFCRRNKGFVJGRTQXKUKQPUQH+PNCPF
Revenue Act No. 24 of 2017 and the amendments thereto.
FINANCIAL REPORTS
21 INCOME TAX EXPENSE (Contd.)
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
6JG)TQWRKUUWDLGEVVQKPEQOGVCZCPFLWFIGOGPVKUTGSWKTGFVQFGVGTOKPGVJGVQVCNRTQXKUKQPHQTEWTTGPVFGHGTTGFCPFQVJGTVCZGUFWG
VQVJGWPEGTVCKPVKGUVJCVGZKUVYKVJTGURGEVVQKPVGTRTGVCVKQPQHVJGCRRNKECDKNKV[QHVCZNCYUCVVJGVKOGQHRTGRCTCVKQPQHVJGUGƂPCPEKCN
statements.
7PEGTVCKPVKGUCNUQGZKUVYKVJTGURGEVVQVJGKPVGTRTGVCVKQPQHEQORNGZVCZTGIWNCVKQPUCPFVJGCOQWPVCPFVKOKPIQHHWVWTGVCZCDNG
KPEQOG)KXGPVJGYKFGTCPIGQHDWUKPGUUTGNCVKQPUJKRUCPFVJGNQPIVGTOPCVWTGCPFEQORNGZKV[QHGZKUVKPIEQPVTCEVWCNCITGGOGPVU
FKHHGTGPEGUCTKUKPIDGVYGGPVJGCEVWCNTGUWNVUCPFVJGCUUWORVKQPUOCFGQTHWVWTGEJCPIGUVQUWEJCUUWORVKQPUEQWNFPGEGUUKVCVG
future adjustments to tax income and expense amounts that were initially recorded and deferred tax amounts in the period in which the
FGVGTOKPCVKQPKUOCFG)TQWRJCUGXCNWCVGFVJGUGWPEGTVCKPVKGUKPVGTOUQH+(4+%no7PEGTVCKPV[1XGT+PEQOG6CZ6TGCVOGPVoo
6JGFGHGTTGFVCZNKCDKNKVKGUCUUGVUCTGFKUENQUGFWPFGT0QVGVQVJGƂPCPEKCNUVCVGOGPVU
21 (a) Income Tax Expense
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
%WTTGPVVCZGZRGPUG=0QVG
D? 25,573,882 25,981,411
&GHGTTGFVCZGZRGPUG=0QVG
E? (27,633,469)
(27,309,389)

(2,059,587) (1,327,978)
Effective tax rate (17.20%) (9.21% )
'HHGEVKXGVCZTCVG
GZENWFKPIFGHGTTGFVCZ 213.58% 30.28% 180.17% 27.98%
21 (b) Current Income Tax Expense
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
%WTTGPVVCZQPRTQƂVHQTVJG[GCT=0QVG
D
K
KK? 26,627,382 26,968,466
'HHGEVQHEJCPIGUKPVCZTCVG=0QVG
D
KKK? -
-

Over provision in previous years (1,053,500)
(987,055)

25,573,882 25,981,411
21 (b) (i) Effect of changes in tax rate in current year

6JG+PNCPF4GXGPWG
#OGPFOGPV#EV0QQHYCUEGTVKƂGFD[VJG5RGCMGTQPVJ&GEGODGT6JGUVCPFCTFTCVGQHKPEQOGVCZ
JCUDGGPKPETGCUGFVQHTQOYGHUV1EVQDGT6JGKPETGCUGKPKPEQOGVCZTCVGVQKPOKF[GCTJCUTGUWNVGFKPVYQVCZTCVGU
DGKPICRRNKECDNGHQTVJG;GCTQH#UUGUUOGPV6JG$CPM)TQWRJCUEQORWVGFVJGEWTTGPVVCZRC[CDNGQPCRTQTCVCDCUKUHQTVJG;GCT
QH#UUGUUOGPV
21 (b) (ii) Treatment of impairment charges

#URGT2CTV+5GE
+QHVJG)C\GVVGPQVKƂECVKQPKUUWGFQPVJ1EVQDGTWPFGTUWDUGEVKQP
CPF
QHUGEVKQPQHVJG+PNCPFTGXGPWG
#EV0QQHVJGKORCKTOGPVEJCTIGUQH5VCIGETGFKVHCEKNKVKGUENCUUKƂGFCURGT5TK.CPMC#EEQWPVKPI5VCPFCTFU
5.(45JCXGDGGP
EQPUKFGTGFCUCPCNNQYCDNGFGFWEVKQP
CHVGTCFLWUVKPIHQTURGEKƂECVKQPUIKXGPWPFGTUGEVKQPQHUEJGFWNGQHVJGUCKF)C\GVVGPQVKƂECVKQP

21 (b) (iii) Effect of changes in tax rate in previous year
(WTVJGTCURGTVJG+PNCPF4GXGPWG
#OGPFOGPV#EV0QQHYJKEJYCUEGTVKƂGFD[VJG5RGCMGTQPVJ/C[CPFYJKEJDGECOG
GHHGEVKXGHTQOUV,CPWCT[VJG$CPM)TQWREQORWVGFVJGEWTTGPVVCZRC[CDNGHQTCVVJGTCVGQHCPFVJGEWTTGPVVCZNKCDKNKV[HQT
YCUTGCUUGUUGFCVVJGUCKFTCVGFWTKPIVJG[GCT
21 (c) Deferred Tax Expense
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Deferred Tax Liability

1TKIKPCVKQP
TGXGTUCNQHVGORQTCT[FKHHGTGPEGFWTKPIVJG[GCT (425,790)
(178,642)

'HHGEVQHEJCPIGUKPVCZTCVG 362,723
261,026

(63,067)
82,384

Deferred Tax Asset
4GXGTUCN
QTKIKPCVKQPQHVGORQTCT[FKHHGTGPEGFWTKPIVJG[GCT (25,051,962)
(25,018,563)

'HHGEVQHEJCPIGUKPVCZTCVG (2,518,440) (2,373,210)
(27,570,402)
(27,391,773)

(27,633,469)
(27,309,389)

6JG+PNCPF4GXGPWG
#OGPFOGPV#EV0QQHYCUEGTVKƂGFD[VJG5RGCMGTQPVJ&GEGODGT6JGUVCPFCTFTCVGQHKPEQOGVCZ
JCUDGGPKPETGCUGFVQHTQOYGHUV1EVQDGT#EEQTFKPIN[FGHGTTGFVCZCUUGVCPFNKCDKNKV[JCXGDGGPEQORWVGFCV
&GHGTTGFVCZCUUGVJCUDGGPTGEQIPK\GFQPCNNVGORQTCT[FKHHGTGPEGUCTKUKPIQPKORCKTOGPVRTQXKUKQPUCHVGTCFLWUVOGPVUDGGPOCFGKPTGURGEV
QHKORCKTOGPVEJCTIGURGTVCKPKPIVQUVCIGETGFKVHCEKNKVKGUDCUGFQPVJGURGEKƂECVKQPUIKXGPKPUGEVKQPQHUEJGFWNG
+QHVJG)C\GVVG
PQVKƂECVKQPKUUWGFQPVJ1EVQDGTWPFGT+PNCPF4GXGPWG#EV0QQH
FINANCIAL REPORTS
21 INCOME TAX EXPENSE (Contd.)

G &XUUHQW7D[RQ3UŘWIRUWKH\HDU6XEVLGLDULHV
Group
Rs 000 Rs 000
5KVJOC&GXGNQROGPV
2XV.VF 252,053
*0$#UUWTCPEG2.% 288,436
*0$(KPCPEG2.% (199,405)
341,084
21 (e) Applicable Tax Rates

#UGZRNCKPGFKP0QVG
D
KVJGUVCPFCTFTCVGQHKPEQOGVCZGUJCXGDGGPTGXKUGF6JGPGYVCZTCVGUJCXGDGGPFKUENQUGFDGNQY
Company New tax rate Previous tax rate

*0$#UUWTCPEG2.%CPFKVUUWDUKFKCT[*0$)GPGTCN
+PUWTCPEG.KOKVGF
*0$(KPCPEG2.%
5KVJOC&GXGNQROGPV
2XV.VF
I 5HFRQFLOLDWLRQRI(IIHFWLYH7D[5DWHb
Bank Group
% Rs 000 % Rs 000 % Rs 000 % Rs 000
2TQƂVDGHQTGKPEQOGVCZ 11,973,906 14,420,257

6CZWUKPIVJGEQTRQTCVGVCZTCVG 27.00 3,232,955 24.00 27.00 3,893,440 24.00
Disallowable expenses 29.09 3,482,745 14.55 30.79 4,440,122
6CZGHHGEVUQP
Allowable expenses (0.15) (18,147)

(0.44) (63,768)

Tax exempt income (25.47) (3,049,983)

(25.54) (3,683,522)

'HHGEVQHEJCPIGKPVCZTCVG (38.86) (4,653,657) 3.71 (32.57) (4,697,188) 3.80
7VKNKUCVKQPQH2TGXKQWU6CZ.QUUGU - - (1.90) (273,554)
7PFKUVTKDWVCDNGRTQƂVUQHUWDUKFKCTKGUCPF
joint venture - - 0.30 43,561

(8.40) (1,006,087) (2.36) (340,909) 19.31
Over provision in previous years (8.80) (1,053,500)

(6.85) (987,069)

Income tax expense [Note21 (a)] (17.20) (2,059,587) 12.74 (9.21) (1,327,978) 12.88

21 (g) Amounts Recognised in Other Comprehensive Income
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
4GOGCUWTGOGPVQHRQUVGORNQ[OGPVDGPGƂVQDNKICVKQPU (8,344)

4GXCNWCVKQPQHHTGGJQNFNCPFCPFDWKNFKPIU (1,157,240)
(2,434,075)

0GVICKPU
NQUUGUQPKPXGUVOGPVUKPIQXGTPOGPVUGEWTKVKGU (466,439) (387,768)
(1,623,679) (2,830,187)

K 7D[/RVVHV%URXJKW)RUZDUGDQG8WLOLVHGGXULQJWKH<HDUb
Group
2022 2021
Rs 000 Rs 000
$CNCPEGCUCVUV,CPWCT[ 1,139,763

#FLWUVOGPVHQTDTQWIJVHQTYCTFVCZNQUUGU -

6CZNQUUGUWVKNKUGFFWTKPIVJG[GCT (1,139,763)

Balance as at 31st December -
6JGFGVCKNUQPVCZNQUUGUWVKNK\GFD[UWDUKFKCTKGUJCXGDGGPIKXGPKP0QVG
FVQVJGƂPCPEKCNUVCVGOGPVU
FINANCIAL REPORTS
($51,1*63(56+$5(bb
#%%1706+0)21.+%;
6JG$CPM)TQWRRTGUGPVUDCUKECPFFKNWVGF'CTPKPIURGT5JCTG
'25FCVCHQTKVUQTFKPCT[UJCTGU$CUKE'25KUECNEWNCVGFD[FKXKFKPI
VJGRTQƂVQTNQUUHQTVJG[GCTCVVTKDWVCDNGVQQTFKPCT[UJCTGJQNFGTUQHVJG$CPMD[VJGYGKIJVGFCXGTCIGPWODGTQHQTFKPCT[UJCTGU
QWVUVCPFKPIFWTKPIVJG[GCT&KNWVGF'25KUFGVGTOKPGFD[CFLWUVKPIVJGRTQƂVQTNQUUCVVTKDWVCDNGVQVJGQTFKPCT[UJCTGJQNFGTUCPFVJG
YGKIJVGFCXGTCIGPWODGTQHQTFKPCT[UJCTGUQWVUVCPFKPIHQTVJGGHHGEVUQHCNNFKNWVKXGRQVGPVKCNQTFKPCT[UJCTGUYJKEJEQORTKUGUJCTG
QRVKQPUITCPVGFVQGORNQ[GGUCURGT5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp'CTPKPIURGT5JCTGq
D %DVLF(DUQLQJVSHU6KDUHb
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Amount used as the numerator

2TQƂVCVVTKDWVCDNGVQGSWKV[JQNFGTUQHVJG$CPM
4U 14,033,493 15,328,572
1XPEHURIRUGLQDU\VKDUHVXVHGDVWKHGHQRPLQDWRUb
9GKIJVGFCXGTCIGPWODGTQHQTFKPCT[UJCTGUQWVUVCPFKPI
FWTKPIVJG[GCTWUGFCUVJGFGPQOKPCVQT
HQTDCUKE'25
n=0QVG
E? 535,555 535,555
Basic earnings per ordinary share (Rs) 26.20 32.30 28.62 35.52
E 'LOXWHG(DUQLQJVSHU6KDUHbb
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Amount used as the numerator

2TQƂVCVVTKDWVCDNGVQGSWKV[JQNFGTUQHVJG$CPM
4U 14,033,493 15,328,572
Number of ordinary shares used as the denominator
9GKIJVGFCXGTCIGPWODGTQHQTFKPCT[UJCTGUQWVUVCPFKPI
FWTKPIVJG[GCTWUGFCUVJGFGPQOKPCVQT
HQTFKNWVGF'25
n=0QVG
E? 535,555 535,555
Diluted earnings per ordinary share (Rs) 26.20 32.30 28.62 35.52

22 (c) Weighted Average Number of Ordinary Shares Outstanding During the Year, Used as the Denominator for Basic and Diluted
(DUQLQJV3HU6KDUHbb
|$CPM)TQWR
2022
0WODGTQHUJCTGUKPKUUWGCUCVUV,CPWCT[ 525,904,573
0WODGTQHUJCTGUUCVKUƂGFKPVJGHQTOQHKUUWGCPFCNNQVOGPVQHPGYUJCTGUHQTƂPCNFKXKFGPF 9,650,869
:HLJKWHGDYHUDJHQXPEHURIRUGLQDU\VKDUHVDVDWVW'HFHPEHUb 535,555,442
23 DIVIDENDS PAID AND PROPOSED
2022 2021
For the year ended 31st December Gross 'LYLGHQG Net Gross 'LYLGHQG Net
'LYLGHQG Tax 'LYLGHQG 'LYLGHQG Tax 'LYLGHQG
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Rs 3.50 scrip dividend per share

declared in 2020 and paid in 2021 - - -
Rs 4.50 cash dividend per share
declared in 2020 and paid in 2021 - - -
Rs 2.50 scrip dividend per share
declared in 2021 and paid in 2022 1,314,761 - 1,314,761
4UECUJFKXKFGPFRGTUJCTG
declared in 2021 and paid in 2022 3,418,380 - 3,418,380
23 (a) Proposed Dividends

6JG&KTGEVQTUTGEQOOGPFVJCVCƂPCNFKXKFGPFQH4URGTUJCTGD[YC[UETKRFKXKFGPF
4URGTUJCTGECUJCPF4URGT
UJCTGUETKRQPDQVJXQVKPICPFPQPXQVKPIUJCTGUQHVJG$CPMDGRCKFHQTVJGƂPCPEKCN[GCTGPFGFUV&GEGODGT
6JGƂPCNFKXKFGPFKUVQDGCRRTQXGFCVVJG#PPWCN)GPGTCN/GGVKPIVQDGJGNFQPVJ/CTEJ+PCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI
5VCPFCTFs.-#5QPp'XGPVUCHVGTVJGTGRQTVKPIRGTKQFqVJKUƂPCNFKXKFGPFJCUPQVDGGPTGEQIPKUGFCUCNKCDKNKV[CUCVUV&GEGODGT
(KPCNFKXKFGPFRTQRQUGFCOQWPVUVQ4U/P
ƂPCNFKXKFGPF4U/P
23 (b) Compliance with Sections 56 and 57 of Companies Act No. 07 of 2007

#UTGSWKTGFD[VJG5GEVKQPQHVJG%QORCPKGU#EV0QQHVJG$QCTFQH&KTGEVQTUQHVJG$CPMUCVKUƂGFVJGUQNXGPE[VGUVKP
CEEQTFCPEGYKVJVJG5GEVKQPRTKQTVQTGEQOOGPFKPIVJGƂPCNFKXKFGPF#UVCVGOGPVQHUQNXGPE[EQORNGVGFCPFFWN[UKIPGFD[VJG
&KTGEVQTUQP(GDTWCT[VJJCUDGGPCWFKVGFD[GZVGTPCNCWFKVQT/GUUTU-2/)
FINANCIAL REPORTS
24 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS

6JGCEEQWPVKPIRQNKEKGUCFQRVGFKPOGCUWTGOGPVQHƂPCPEKCNKPUVTWOGPVUCTGIKXGPKP0QVGUVQVJGƂPCPEKCNUVCVGOGPVU
6JGECTT[KPICOQWPVUQHƂPCPEKCNKPUVTWOGPVUD[ECVGIQT[CUFGƂPGFKP5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN+PUVTWOGPVUq
WPFGTJGCFKPIUQHVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPCTGUWOOCTKUGFDGNQY
24 (a) Analysis of Financial Instruments by Measurement Basis - Bank
As at 31st December 2022 Fair Value Amortised Fair Value Total

through Cost through Other Carrying
3UR̍WRU/RVV &RPSUHKHQVLYH Amount
Income
Rs 000 Rs 000 Rs 000 Rs 000
Assets
%CUJCPFECUJGSWKXCNGPVU - 80,238,881 - 80,238,881
2NCEGOGPVUYKVJDCPMU - 54,371,028 54,371,028
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - 32,344,341 - 32,344,341
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 - - 5,370,501
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 111,617 - - 111,617
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQ
customers - 974,131,252 - 974,131,252
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTKPUVTWOGPVU - 448,791,874 - 448,791,874
income - - 2,706,660 2,706,660
1VJGTƂPCPEKCNCUUGVU - 9,227,790 - 9,227,790
7RWDO̍QDQFLDODVVHWV 5,482,118 1,599,105,166 2,706,660 1,607,293,944
Liabilities
&WGVQDCPMU - 6,104,578 - 6,104,578
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 25,632 - 25,632
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU - 6,540,014 - 6,540,014
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU - 1,407,800,492 - 1,407,800,492
Dividends payable - 1,008,325 - 1,008,325
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU - 32,350,594 - 32,350,594
Debt securities issued - 2,062,950 - 2,062,950
1VJGTƂPCPEKCNNKCDKNKVKGU - 4,213 - 4,213
Subordinated term debts - 22,914,299 - 22,914,299
7RWDO̍QDQFLDOOLDELOLWLHV 25,632 1,478,785,465 - 1,478,811,097

24 (a) Analysis of Financial Instruments by Measurement Basis - Bank

Income
Rs 000 Rs 000 Rs 000 Rs 000
Assets
customers
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTKPUVTWOGPVU
income
7RWDO̍QDQFLDODVVHWV
Liabilities
&WGVQDCPMU
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU
Dividends payable
1VJGTƂPCPEKCNNKCDKNKVKGU
7RWDO̍QDQFLDOOLDELOLWLHV
FINANCIAL REPORTS
24 ANALYSIS OF FINANCIAL INSTRUMENTS BY MEASUREMENT BASIS (Contd.)

E $QDO\VLVRI)LQDQFLDO,QVWUXPHQWVE\0HDVXUHPHQW%DVLV*URXSb

Income
Rs 000 Rs 000 Rs 000 Rs 000
Assets
%CUJCPFECUJGSWKXCNGPVU - 80,629,698 - 80,629,698
2NCEGOGPVUYKVJDCPMU - 58,172,046 - 58,172,046
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC - 32,344,341 - 32,344,341
4GXGTUGTGRWTEJCUGCITGGOGPVU - 1,380,579 - 1,380,579
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 - - 5,370,501
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 236,178 - - 236,178
customers - 1,014,518,939 - 1,014,518,939
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTKPUVTWOGPVU - 479,787,015 - 479,787,015
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJ1VJGTEQORTGJGPUKXG
income - - 6,062,195 6,062,195
1VJGTƂPCPEKCNCUUGVU - 12,041,606 - 12,041,606
7RWDO̍QDQFLDODVVHWV 5,606,679 1,678,874,224 6,062,195 1,690,543,098
Liabilities
&WGVQDCPMU - 6,104,578 - 6,104,578
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 25,632 - - 25,632
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU - 6,540,014 - 6,540,014
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU - 1,443,179,121 - 1,443,179,121
Dividends payable - 1,038,542 - 1,038,542
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU - 33,385,598 - 33,385,598
Debt securities issued - 2,555,109 - 2,555,109
1VJGTƂPCPEKCNNKCDKNKVKGU - bb - bb
Subordinated term debts - 26,151,300 - 26,151,300
7RWDO̍QDQFLDOOLDELOLWLHV 25,632 1,521,388,893 - 1,521,414,525

E $QDO\VLVRI)LQDQFLDO,QVWUXPHQWVE\0HDVXUHPHQW%DVLV*URXSb

Income
Rs 000 Rs 000 Rs 000 Rs 000
Assets
2NCEGOGPVUYKVJDCPMU
other comprehensive income
7RWDO̍QDQFLDODVVHWV
Liabilities
&WGVQDCPMU
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU
Dividends payable
1VJGTƂPCPEKCNNKCDKNKVKGU
7RWDO̍QDQFLDOOLDELOLWLHV
FINANCIAL REPORTS
&$6+$1'&$6+(48,9$/(176bbb
#%%1706+0)21.+%;
%CUJCPFECUJGSWKXCNGPVUKPENWFGECUJKPJCPFCPFDCNCPEGUYKVJDCPMU6JGUGCTGUWDLGEVVQCPKPUKIPKƂECPVTKUMQHEJCPIGUKPHCKTXCNWG
CPFCTGWUGFD[VJG)TQWRKPVJGOCPCIGOGPVQHKVUUJQTVVGTOEQOOKVOGPVU6JGUGCTGDTQWIJVVQVJGƂPCPEKCNUVCVGOGPVUCVVJGHCEG
XCNWGUQTITQUUXCNWGU%CUJCPFECUJGSWKXCNGPVUCTGECTTKGFCVCOQTVKUGFEQUVKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
.QECNEWTTGPE[KPJCPF 36,929,336 37,190,861

(QTGKIPEWTTGPE[KPJCPF 2,344,665 2,344,665
80,441,893 80,832,734
.GUU#NNQYCPEGHQTKORCKTOGPVNQUUGU=0QVG
C? 203,012 203,036
80,238,881 80,629,698
#NNECUJCPFECUJGSWKXCNGPVDCNCPEGUJGNFD[VJGITQWRGPVKVKGUYGTGCXCKNCDNGHQTWUGD[VJG)TQWR
25 (a) Movement in Impairment during the year
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
0GVKORCKTOGPVEJCTIG
TGXGTUCNFWTKPIVJG[GCT=0QVG? 194,133
194,157

Balance as at 31st December 203,012 203,036
25 (b) Credit and Market risk

+PHQTOCVKQPCDQWVVJG)TQWRoUETGFKVCPFOCTMGVTKUMUHQTƂPCPEKCNCUUGVUCTGKPENWFGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
3/$&(0(176:,7+%$1.6bbbb
#%%1706+0)21.+%;
2NCEGOGPVUYKVJDCPMUKPENWFGOQPG[CVECNNCPFUJQTVPQVKEGVJCVCTGUWDLGEVVQCPKPUKIPKƂECPVTKUMQHEJCPIGKPVJGHCKTXCNWGCPFCTG
WUGFD[VJG)TQWRKPVJGOCPCIGOGPVQHKVUUJQTVVGTOEQOOKVOGPVU6JGUGCTGDTQWIJVVQVJGƂPCPEKCNUVCVGOGPVUCVVJGHCEGXCNWGUQT
ITQUUXCNWGU2NCEGOGPVUYKVJDCPMUCTGECTTKGFCVCOQTVKUGFEQUVKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
2NCEGOGPVUYKVJKP5TK.CPMC - 3,801,707

2NCEGOGPVUQWVUKFG5TK.CPMC 54,383,166 54,383,166
.GUU#NNQYCPEGHQTKORCKTOGPVNQUUGU=0QVG
C? 12,138 12,827 351
54,371,028 58,172,046

D 0RYHPHQWLQ,PSDLUPHQWGXULQJWKH\HDUb
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
$CNCPEGCUCVUV,CPWCT[ - 351 477
0GVKORCKTOGPV
TGXGTUCNEJCTIGFWTKPIVJG[GCT=0QVG? 12,138 12,476

Balance as at 31st December 12,138 12,827 351
26 (b) Credit and Market risk

27 BALANCES WITH CENTRAL BANK OF SRI LANKA

$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMCTGRTGUGPVVJGECUJDCNCPEGVJCVKUTGSWKTGFVQDGOCKPVCKPGFCURGTVJGRTQXKUKQPUQH5GEVKQPQHVJG
/QPGVCT[.CY#EV6JGOKPKOWOECUJTGUGTXGTGSWKTGOGPVQPTWRGGFGRQUKVNKCDKNKVKGUYCUCUCVUV&GEGODGT

6JGTGKUPQTGUGTXGTGSWKTGOGPVHQTFGRQUKVNKCDKNKVKGUQHVJG(QTGKIP%WTTGPE[$CPMKPI7PKV
(%$7CPFHQTGKIPEWTTGPE[FGRQUKVNKCDKNKVKGUKP
VJG&QOGUVKE$CPMKPI7PKV
&$7
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
5VCVWVQT[DCNCPEGYKVJ%GPVTCN$CPMQH5TK.CPMC 32,344,341 32,344,341

5VCPFKPIFGRQUKVHCEKNKV[YKVJ%GPVTCN$CPMQH5TK.CPMC 4,403,505 - 4,403,505 -
32,344,341 32,344,341
5(9(56(5(385&+$6($*5((0(176bbbbbb
#%%1706+0)21.+%;
5GEWTKVKGURWTEJCUGFWPFGTCITGGOGPVUVQTGUGNNCVCURGEKƂGFHWVWTGFCVGCTGPQVTGEQIPKUGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP6JG
EQPUKFGTCVKQPRCKFKPENWFKPICEETWGFKPVGTGUVKUTGEQTFGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPYKVJKPpTGXGTUGTGRWTEJCUGCITGGOGPVUq
TGƃGEVKPIVJGVTCPUCEVKQPoUGEQPQOKEUWDUVCPEGCUCNQCPD[VJG)TQWR6JGFKHHGTGPEGDGVYGGPVJGRWTEJCUGCPFTGUCNGRTKEGUKU
TGEQTFGFKPPGVKPVGTGUVKPEQOGCPFKUCEETWGFQXGTVJGNKHGQHVJGCITGGOGPVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4
Group
Rs 000 Rs 000
6HFXULWLHVSXUFKDVHGXQGHUUHYHUVHUHSXUFKDVHDJUHHPHQWV
YKVJDCPMU -
with customers 1,380,579
1,380,579
FINANCIAL REPORTS
'(5,9$7,9(),1$1&,$/,167580(176bbbbbbbb
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQFGTKXCVKXGƂPCPEKCNKPUVTWOGPVUJCUDGGPIKXGPKP0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU
#FGTKXCVKXGKUCƂPCPEKCNKPUVTWOGPVQTQVJGTEQPVTCEVYKVJCNNVJTGGQHVJGHQNNQYKPIEJCTCEVGTKUVKEU
r +VUXCNWGEJCPIGUKPTGURQPUGVQVJGEJCPIGKPCURGEKƂGFKPVGTGUVTCVGƂPCPEKCNKPUVTWOGPVRTKEGEQOOQFKV[RTKEGHQTGKIPGZEJCPIG
TCVGKPFGZQHRTKEGUQTTCVGUETGFKVTCVKPIQTETGFKVKPFGZQTQVJGTXCTKCDNGRTQXKFGFVJCVKPVJGECUGQHCPQPƂPCPEKCNXCTKCDNGKVKU
PQVURGEKƂEVQCRCTV[VQVJGEQPVTCEV
KGVJGnWPFGTN[KPIo
r +VTGSWKTGUPQKPKVKCNPGVKPXGUVOGPVQTCPKPKVKCNPGVKPXGUVOGPVVJCVKUUOCNNGTVJCPYQWNFDGTGSWKTGFHQTQVJGTV[RGUQHEQPVTCEVU
GZRGEVGFVQJCXGCUKOKNCTTGURQPUGVQEJCPIGUKPOCTMGVHCEVQTU
• It is settled at a future date.
6JG$CPMWUGUFGTKXCVKXGUUWEJCUHQTYCTFHQTGKIPGZEJCPIGEQPVTCEVUCPFEWTTGPE[UYCRU$CPMJCUPQVFGUKIPCVGFCP[FGTKXCVKXG
CUCJGFIKPIKPUVTWOGPVCPFJCUPQVHQNNQYGFJGFIGCEEQWPVKPICUCVVJGTGRQTVKPIFCVG#NNFGTKXCVKXGUCTGKPKVKCNN[TGEQIPKUGFCPF
UWDUGSWGPVN[OGCUWTGFCVHCKTXCNWGYKVJTGXCNWCVKQPICKPUQTNQUUGUTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVWPFGTp0GVICKP
NQUUHTQO
VTCFKPIq
0QVG&GTKXCVKXGUCTGTGEQTFGFCVHCKTXCNWGCPFECTTKGFCUCUUGVUYJGPVJGKTHCKTXCNWGKURQUKVKXGCPFCUNKCDKNKVKGUYJGPVJGKT
HCKTXCNWGKUPGICVKXG(CKTXCNWGKUFGVGTOKPGFWUKPIVJGHQTYCTFOCTMGVTCVGUTWNKPIQPVJGTGRQTVKPIFCVG
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105|
,WFIGOGPVKUTGSWKTGFYJGPVJG$CPM)TQWRUGNGEVUVJGXCNWCVKQPVGEJPKSWGUWUGFVQFGVGTOKPGVJGHCKTXCNWGQHFGTKXCVKXGURCTVKEWNCTN[
VJGUGNGEVKQPQHXCNWCVKQPKPRWVUVJCVCTGPQVTGCFKN[QDUGTXCDNGCPFVJGCRRNKECVKQPQHXCNWCVKQPCFLWUVOGPVUVQEGTVCKPFGTKXCVKXGU
6JGVCDNGDGNQYUJQYUVJGHCKTXCNWGUQHFGTKXCVKXGƂPCPEKCNKPUVTWOGPVUTGEQTFGFCUCUUGVUQTNKCDKNKVKGU
$CPM)TQWR
Assets Liabilities Assets Liabilities
Rs 000 Rs 000 Rs 000 Rs 000
&XUUHQF\VZDSV
Sales - -
Purchases 5,320,269 -
5,320,269 -
)RUZDUGIRUHLJQH[FKDQJHFRQWUDFWV
Sales 35,271 4,103
Purchases 14,961 21,529 37
50,232 25,632
5,370,501 25,632

),1$1&,$/$66(760($685('$7)$,59$/8(7+528*+352),725/266bbbb
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUJCUDGGPIKXGPKP0QVGCPFVQVJG
ƂPCPEKCNUVCVGOGPVU
#ƂPCPEKCNCUUGVKUENCUUKƂGFCUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUKHKVKUJGNFHQTVTCFKPIQTKUFGUKIPCVGFCVHCKTXCNWGVJTQWIJ
RTQƂVQTNQUU
Financial assets held for trading

6JG)TQWRENCUUKƂGUƂPCPEKCNCUUGVUCUJGNFHQTVTCFKPIKPVJGHQNNQYKPIEKTEWOUVCPEGU
r6JQUGJCXGDGGPRWTEJCUGFQTCESWKTGFRTKOCTKN[HQTUJQTVVGTORTQƂVOCMKPIVJTQWIJVTCFKPICEVKXKVKGUQT
r6JQUGHQTORCTVQHCRQTVHQNKQQHƂPCPEKCNKPUVTWOGPVUVJCVCTGOCPCIGFVQIGVJGTHQTYJKEJVJGTGKUGXKFGPEGQHCTGEGPVRCVVGTPQH
UJQTVVGTORTQƂVVCMKPI
(KPCPEKCNCUUGVUJGNFHQTVTCFKPICTGOGCUWTGFCPFTGEQTFGFCVHCKTXCNWGKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP%JCPIGUKPHCKTXCNWG
CTGTGEQIPKUGFKPpPGVICKP
NQUUHTQOVTCFKPIq
0QVG+PVGTGUVKPEQOGHTQOƂPCPEKCNCUUGVUJGNFHQTVTCFKPIKUTGEQTFGFKPp+PVGTGUV
KPEQOGqCPFFKXKFGPFKPEQOGKUTGEQTFGFKPpPGVICKP
NQUUHTQOVTCFKPIq
0QVGCEEQTFKPIVQVJGVGTOUQHVJGEQPVTCEVQTYJGPVJG
TKIJVVQTGEGKXGVJGRC[OGPVJCUDGGPGUVCDNKUJGF
(KPCPEKCNCUUGVUJGNFHQTVTCFKPIKPENWFGKPUVTWOGPVUUWEJCUIQXGTPOGPVUGEWTKVKGUGSWKV[KPUVTWOGPVUGVEVJCVJCXGDGGPCESWKTGF
RTKPEKRCNN[HQTVJGRWTRQUGQHUGNNKPIQTTGRWTEJCUKPIKPVJGPGCTVGTO
(WTVJGTCURGT5.(45ƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUKPENWFGCNNƂPCPEKCNCUUGVUQVJGTVJCPVJQUGENCUUKƂGF
CUHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGCPFƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUV
)LQDQFLDODVVHWVGHVLJQDWHGDWIDLUYDOXHWKURXJKSUR̍WRUORVV
6JG)TQWRJCUPQVFGUKIPCVGFCP[ƂPCPEKCNCUUGVCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105|
,WFIGOGPVKUTGSWKTGFYJGPCRRN[KPIVJGXCNWCVKQPVGEJPKSWGUWUGFVQFGVGTOKPGVJGHCKTXCNWGQHVTCFKPIUGEWTKVKGUPQVXCNWGFWUKPI
SWQVGFOCTMGVRTKEGU

Rs 000 Rs 000
3WQVGFUJCTGU$CPM=0QVG
C? 111,121
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNU$CPM=0QVG
D? 496
7RWDO̍QDQFLDODVVHWVPHDVXUHGDWIDLUYDOXHWKURXJKSUR̍WRUORVV%DQN 111,617
3WQVGFUJCTGU5WDUKFKCTKGU=0QVG
E? 124,561
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFU5WDUKFKCTKGU=0QVG
F? -
7PSWQVGFWPKVUKPWPKVVTWUVU5WDUKFKCTKGU=0QVG
G? -
7RWDO̍QDQFLDODVVHWVPHDVXUHGDWIDLUYDOXHWKURXJKSUR̍WRUORVV6XEVLGLDULHV 124,561
7RWDO̍QDQFLDODVVHWVPHDVXUHGDWIDLUYDOXHWKURXJKSUR̍WRUORVV*URXS 236,178
FINANCIAL REPORTS
30 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS (Contd.)

D 4XRWHG6KDUHV+HOGE\WKH%DQNbbbb

No of Cost of % of Fair No of Cost of % of Fair
Ordinary ,QYHVWPHQW Total Value Ordinary ,QYHVWPHQW Total Value
Shares Shares
Rs 000 Rs 000 Rs 000 Rs 000
Banks, Finance and Insurance

%G[NKPEQ+PUWTCPEG2.% 34,000 23,035 18 34,910 18
0CVKQPCN&GXGNQROGPV$CPM2.% 48,164 10,904 8 1,541 8
Sector Total 33,939 36,451
Construction and Engineering

#EEGUU'PIKPGGTKPI2.% 175 6 - 2 175
Sector Total 6 2
'LYHUVL̍HG+ROGLQJV
#KVMGP5RGPEG2.% 278,515 30,625 24 35,650 24
+RWHOVDQG7UDYHOV
#KVMGP5RGPEG*QVGN*QNFKPIU2.% 575,301 45,998 36 29,225
#UKCP*QVGNUCPF2TQRGTVKGU2.% 207,476 14,918 12 7,760 12
Motors
7PKVGF/QVQTU.CPMC2.% 33,385 3,522 3 2,033 2
129,008 111,121
7PTGCNKUGFNQUUHTQOOCTMGFVQOCTMGV
valuation (17,887)

Total quoted shares - Bank 111,121 111,121
E *RYHUQPHQWRI6UL/DQND7UHDVXU\%LOOV+HOGE\WKH%DQNbbbb

Cost of Fair Cost of Fair
,QYHVWPHQW Value ,QYHVWPHQW Value
Rs 000 Rs 000 Rs 000 Rs 000
Year of maturity
2023 496 496
7PTGCNKUGFNQUUHTQOOCTMGFVQOCTMGVXCNWCVKQP - -
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ELOOV%DQN 496 496

F 4XRWHGVKDUHV+HOGE\6XEVLGLDULHVbbbbb

No of Cost of % of Fair No of Cost of % of Fair
Ordinary ,QYHVWPHQW Total Value Ordinary ,QYHVWPHQW Total Value
Shares Shares
Rs 000 Rs 000 Rs 000 Rs 000
Banks, Finance and Insurance

%GPVTCN(KPCPEG%QORCP[2.% 142,285 17,088 12 8,893 12
0CVKQPU6TWUV$CPM2.% 97,177 6,578 5 4,489 4
2GQRNGU.GCUKPI(KPCPEG2.% 615,201 10,008 7 3,076 7
5CORCVJ$CPM2.% 318,048 19,747 14 10,877 14
5G[NCP$CPM2.%
0QP8QVKPI 744,066 26,848 18 12,054 17
%HYHUDJH)RRGDQG7REDFFR
&KUVKNNGTKGU%QORCP[QH5TK.CPMC2.% 33,935 - - 448 577
Sector Total - 448 577
'LYHUVL̍HG+ROGLQJV
,QJP-GGNNU*QNFKPIU2.% 29,670 3,679 3 4,013 3
/GNUVCEQTR2.% 94,532 5,603 4 4,367 4
4KEJCTF2GKTKUCPF%QORCP[2.% 312,851 4,351 3 7,540 3
8CNNKDGN1PG2.% 209,638 4,000 3 6,310 3
Land and Property

1XGTUGCU4GCNV[
%G[NQP2.% 486,679 12,454 9 7,252 9
Manufacturing
#%.%CDNGU2.% 190,400 3,016 2 13,347 2
&KRRGF2TQFWEVU2.% 334,000 10,354 7 9,719 7
4Q[CN%GTCOKE.CPMC2.% 680,000 9,172 6 19,244
6QM[Q%GOGPV%QORCP[
.CPMC2.% 391,871 12,824 9 12,932 9
145,722 124,561
7PTGCNKUGFNQUU(TQOOCTMGFVQOCTMGV
valuation (21,161)
Total quoted shares - Subsidiaries 124,561 124,561
FINANCIAL REPORTS
30 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS (Contd.)

30 (d) Government of Sri Lanka Treasury Bonds Held by Subsidiaries

Rs 000 Rs 000 Rs 000 Rs 000
Year of maturity
2022 - -
7PTGCNKUGFICKP
NQUUHTQOOCTMGFVQOCTMGVXCNWCVKQP - 485
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGV6XEVLGLDULHV - -
30 (e) Unquoted Units in Unit Trusts Held by Subsidiaries

No of Cost of Fair No of Cost of Fair
Units ,QYHVWPHQW Value Units ,QYHVWPHQW Value
Rs 000 Rs 000 Rs 000 Rs 000
Capital Alliance Income Fund - - -

Capital Alliance Investment Grade Fund - - -
,$8CPVCIG/QPG[/CTMGV(WPF - - -
7PTGCNKUGFICKPHTQOOCTMGFVQOCTMGV
valuation -
Total quoted units - Subsidiaries - -
30 (f) Analysis
Bank Group
As at 31st December 2022 2021 2022 2021
Fair Value Fair Value Fair Value Fair Value
Rs 000 Rs 000 Rs 000 Rs 000
By currency
5TK.CPMCP4WRGG 111,617 103,365
111,617 103,365
30 (g) Credit and Market risk


),1$1&,$/$66(760($685('$7$0257,6('&267/2$16$1'$'9$1&(672&86720(56bbb
#%%1706+0)21.+%;
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0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQEWUVQOGTUKPENWFGNQCPUCPFCFXCPEGUCPFNGCUGTGEGKXCDNGUQHVJG
Group.
#URGT5.(45NQCPUCPFCFXCPEGUVQEWUVQOGTUCTGCUUGVUVJCVCTG
r *GNFYKVJKPCDWUKPGUUOQFGNYKVJVJGQDLGEVKXGVQJQNFƂPCPEKCNCUUGVUKPQTFGTVQEQNNGEVEQPVTCEVWCNECUJƃQYU
r 6JGEQPVTCEVWCNVGTOUQHVJGƂPCPEKCNCUUGVIKXGTKUGQPURGEKƂGFFCVGUVQECUJƃQYUVJCVCTG5QNGN[2C[OGPVUQH2TKPEKRCNCPF
+PVGTGUV
522+QPVJGRTKPEKRCNCOQWPVQWVUVCPFKPI
#HVGTKPKVKCNOGCUWTGOGPVNQCPUCPFTGEGKXCDNGUCTGUWDUGSWGPVN[OGCUWTGFCVCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4NGUU
CNNQYCPEGHQTKORCKTOGPVGZEGRVYJGPVJG)TQWRFGUKIPCVGUNQCPUCPFTGEGKXCDNGUCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU#OQTVKUGFEQUV
KUECNEWNCVGFD[VCMKPIKPVQCEEQWPVCP[FKUEQWPVQTRTGOKWOQPCESWKUKVKQPCPFHGGUCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JG
COQTVKUCVKQPKUKPENWFGFKPnKPVGTGUVKPEQOGoKPVJGKPEQOGUVCVGOGPV6JGNQUUGUCTKUKPIHTQOKORCKTOGPVCTGTGEQIPKUGFKPnKORCKTOGPV
EJCTIGHQTNQCPUCPFQVJGTNQUUGUoKPVJGKPEQOGUVCVGOGPV
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
*URVVORDQVDQGDGYDQFHV 1,061,371,654 1,107,500,061

UVCIG 790,590,235 821,011,410
UVCIG 168,456,347 176,596,183
UVCIG 102,325,072 109,892,468
Less : Accumulated impairment under: 87,240,402 92,981,122
UVCIG=0QVG
I? 12,477,377 14,914,751
UVCIG=0QVG
I? 16,235,373 16,799,238
UVCIG=0QVG
I? 58,527,652 61,267,133
1HWORDQVDQGDGYDQFHV 974,131,252 1,014,518,939
FINANCIAL REPORTS
31 FINANCIAL ASSETS MEASURED AT AMORTISED COST - LOANS AND ADVANCES TO CUSTOMERS (Contd.)
31 (a) Analysis of Loans and Advances
31 (a) i By Product
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Overdrafts 141,393,778 140,892,245
$KNNUQHGZEJCPIG 1,905,532 1,905,532
Commercial papers 156,664 156,664
Short term loans 154,418,226 154,839,140
Credit cards 15,318,167 15,318,167
2CYPKPICFXCPEGU 53,678,626 59,517,414
Trust receipts 23,842,855 23,842,855
2CEMKPIETGFKVNQCPU 37,385,421 37,385,421
Staff loans 14,619,004 15,169,226
Term loans 491,630,198 516,321,644
.GCUGTGEGKXCDNG 70,802,779 85,931,349
*QWUKPINQCPU 55,496,541 55,496,541
.GCUGDCEMGFUGEWTKVKGU 723,863 723,863
7RWDOJURVVORDQVDQGDGYDQFHV>1RWHDLL@ 1,061,371,654 1,107,500,061
Analysis of Loans and Advances - Bank
5% 13% 5% 12%
7% 7%
15% 12%
2022 2021 1%
1% 3%
3%
5% 2%
2% 51% 2%
4%
1%
46%
Overdrafts Trust receipts Lease receivable

Short term loans Packing credit loans Housing loans
Credit cards Staff loans Bills of exchange
Pawning advances Term loans Commercial papers
Lease backed securities
31 (a) ii By Currency
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
5TK.CPMCP4WRGGU 888,439,422 934,199,325

7PKVGF5VCVGU&QNNCTU 170,245,428 170,608,078
)TGCV$TKVCKP2QWPFU 973,237 979,044
Euros 1,541,758 1,541,792
Other currencies 171,809 171,822
7RWDOJURVVORDQVDQGDGYDQFHV>1RWHDL@ 1,061,371,654 1,107,500,061

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6JG)TQWRJCUQHHGTGFXCTKQWUHQTOUQHCUUKUVCPEGVQEWUVQOGTUUKPEG/CTEJVQEQWPVGTCEVVJGKORCEVQH%18+&CPFRTGXCKNKPI
GEQPQOKEEQPFKVKQPUQPVJGCDKNKV[QHEWUVQOGTUVQOGGVVJGKTNQCPQDNKICVKQPUDCUGFQPVJGIWKFGNKPGUIKXGPD[%GPVTCN$CPMQH5TK.CPMC
CPFCURCTVQH$CPMoUQYPKPKVKCVKXGU6JGFGVCKNUQHVJGKORCEVQHFGHGTTCNUYJGPFGVGTOKPKPIYJGVJGTVJGTGJCUDGGPC5KIPKƂECPV+PETGCUGKP
%TGFKV4KUM
5+%4JCUDGGPFKUEWUUGFKPMG[LWFIGOGPVUCPFCUUWORVKQPUUGEVKQPKP0QVG
HVQVJGƂPCPEKCNUVCVGOGPVU
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KPUVTWOGPVUqKPCEEQTFCPEGYKVJ5.(45
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r %CUJCPFECUJGSWKXCNGPVU
r 2NCEGOGPVUYKVJDCPMU
r (KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQEWUVQOGTU
r (KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU
r (KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
r .QCPEQOOKVOGPVUCPFƂPCPEKCNIWCTCPVGGEQPVTCEVU
'SWKV[KPUVTWOGPVUCTGPQVUWDLGEVVQKORCKTOGPVNQUUGUWPFGT5.(45
31 (b) Overview of the Expected Credit Loss Principles
6JG)TQWROGCUWTGU'ZRGEVGF%TGFKV.QUU
'%.CNNQYCPEGUDCUGFQPVJGETGFKVNQUUGUGZRGEVGFVQCTKUGQXGTVJGNKHGQHVJGCUUGV

VJGNKHGVKOGGZRGEVGFETGFKVNQUUQT.6'%.WPNGUUVJGTGJCUDGGPPQUKIPKƂECPVKPETGCUGKPETGFKVTKUMUKPEGQTKIKPCVKQPKPYJKEJECUG
VJGCNNQYCPEGKUDCUGFQPVJGOQPVJUGZRGEVGFETGFKVNQUU
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6JG)TQWRoURQNKEKGUHQTFGVGTOKPKPIYJGVJGTVJGTGJCUDGGPCUKIPKƂECPVKPETGCUGKPETGFKVTKUMCTGUGVQWVKP0QVG
EKVQVJGƂPCPEKCN
statements.
.6'%.UCPFO'%.UCTGECNEWNCVGFGKVJGTQPCPKPFKXKFWCNDCUKUQTQPEQNNGEVKXGDCUKUFGRGPFKPIQPVJGPCVWTGQHVJGWPFGTN[KPI
RQTVHQNKQQHƂPCPEKCNKPUVTWOGPVU
FINANCIAL REPORTS
31 ( b) i Grouping of Financial Assets for Impairment Assessment
6JG)TQWRoURQNKE[HQTITQWRKPIƂPCPEKCNCUUGVUHQTKORCKTOGPVCUUGUUOGPVCTGCUHQNNQYU
ˀ,QGLYLGXDOO\DVVHVVHGORDQVDQGDGYDQFHVDQGGHEWLQVWUXPHQWVb
6JGUGCTGGZRQUWTGUVJCVCTGKPFKXKFWCNN[UKIPKƂECPVOGTKVKPIKPFKXKFWCNCUUGUUOGPVHQTQDLGEVKXGGXKFGPEGQHKORCKTOGPVCPF
EQORWVCVKQPQHKORCKTOGPVCNNQYCPEG6JG)TQWRECNEWNCVGU'%.QPCPKPFKXKFWCNDCUKUHQTEQTRQTCVGCPF5/'GZRQUWTGUKFGPVKƂGFCU
KPFKXKFWCNN[UKIPKƂECPVNQCPUCPFKPXGUVOGPVUKPFGDVKPUVTWOGPVU+PTGURGEVQHCNNNQCPUVJCVCTGEQPUKFGTGFKPFKXKFWCNN[UKIPKƂECPV$CPM
CUUGUUGUQPCECUGD[ECUGDCUKUYJGVJGTVJGTGKUCP[QDLGEVKXGGXKFGPEGQHKORCKTOGPV
6JGETKVGTKCWUGFD[VJG$CPMVQFGVGTOKPGVJCVVJGTGKUUWEJQDLGEVKXGGXKFGPEGKPENWFGVJGHQNNQYKPIKPVGTCNKC
UKIPKƂECPVƂPCPEKCNFKHƂEWNV[QHVJGDQTTQYGTQTKUUWGT
CDTGCEJQHEQPVTCEVUWEJCUCFGHCWNVQTRCUVFWGGXGPV
VJGTGUVTWEVWTKPIQHCNQCPQTCFXCPEGD[VJG$CPMQPVGTOUVJCVVJG$CPMYQWNFPQVEQPUKFGTQVJGTYKUG
KVKUDGEQOKPIRTQDCDNGVJCVVJGDQTTQYGTYKNNGPVGTDCPMTWRVE[QTQVJGTƂPCPEKCNTGQTICPKUCVKQPQT
VJGCDUGPEGQHCPCEVKXGOCTMGVHQTCUGEWTKV[
VJGRQVGPVKCNKORNKECVKQPUQHVJGRTGXCKNKPIGEQPQOKEEQPFKVKQPUQPVJGDWUKPGUUECUJƃQYUQHVJGDQTTQYGTCPFQTVJGTGEQXGTCDNG
value of the security
ˀ&ROOHFWLYH,PSDLUPHQWDVVHVVPHQW
.QCPUCPFCFXCPEGUVJCVJCXGDGGPCUUGUUGFKPFKXKFWCNN[CPFPQVCVVTCEVKPICP+5.RTQXKUKQPUCPFCNNKPFKXKFWCNN[KPUKIPKƂECPVNQCPUCPF
CFXCPEGUCTGVJGPCUUGUUGFEQNNGEVKXGN[D[ECVGIQTKUKPIVJQUGKPVQITQWRUQHCUUGVUYKVJUKOKNCTETGFKVTKUMEJCTCEVGTKUVKEUVQFGVGTOKPG
whether a provision should be made due to expected loss events.
6JGUGGZRQUWTGUCTGITQWRGFKPVQUOCNNGTJQOQIGPGQWURQTVHQNKQUDCUGFQPRTQFWEVV[RGCPFEWUVQOGTUGIOGPVGVE
31 (b) ii /iÀÕ«i>ÃÕÀiÃÃÃ>Ü>ViÃ>Ì>>ÕÌiµÕ>ÌviÌi
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FGDVKPXGUVOGPVUGEWTKVKGUVJCVCTGFGVGTOKPGFVQJCXGCNQYETGFKVTKUMCVVJGTGRQTVKPIFCVGCPF
QVJGTƂPCPEKCNKPUVTWOGPVUQHYJKEJETGFKVTKUMJCUPQVKPETGCUGFUKIPKƂECPVN[UKPEGVJGKTKPKVKCNTGEQIPKVKQP
6JG)TQWRJCUCPGUVCDNKUJGFRQNKE[KPRNCEGVQRGTHQTOCPCUUGUUOGPVCVVJGGPFQHGCEJTGRQTVKPIRGTKQFQHYJGVJGTCƂPCPEKCN
KPUVTWOGPVoUETGFKVTKUMJCUKPETGCUGFUKIPKƂECPVN[UKPEGKPKVKCNTGEQIPKVKQPD[EQPUKFGTKPIVJGEJCPIGKPTKUMQHFGHCWNVQEEWTTKPIQXGTVJG
TGOCKPKPINKHGQHVJGƂPCPEKCNKPUVTWOGPV
#URGT5.(45CVJTGGUVCIGOQFGNKUCFQRVGFHQTKORCKTOGPVCUUGUUOGPVDCUGFQPEJCPIGUKPETGFKVSWCNKV[UKPEGKPKVKCNTGEQIPKVKQP
5VCIG %NCUUKƂECVKQP%TKVGTKC '%.OGCUWTGOGPV
5VCIG (KPCPEKCNCUUGVUVJCVJCXGPQVWPFGTIQPGCUKIPKƂECPV 12 months expected credit loss

KPETGCUGKPETGFKVTKUMUKPEGKPKVKCNTGEQIPKVKQPCPFCTGPQV
credit impaired
5VCIG (KPCPEKCNCUUGVUVJCVJCXGGZRGTKGPEGFCUKIPKƂECPVKPETGCUG .KHGVKOGGZRGEVGFETGFKVNQUU
KPETGFKVTKUMUKPEGKPKVKCNTGEQIPKVKQPDWVPQVETGFKVKORCKTGF
5VCIG Financial assets which are credit impaired .KHGVKOGGZRGEVGFETGFKVNQUUYKVJRTQDCDKNKV[QH
FGHCWNVCV
POCI 2WTEJCUGFQT1TKIKPCVGF%TGFKV+ORCKTGFCUUGVU
21%+ 6JGUGCUUGVUCTGECVGIQTKUGFYKVJKPUVCIGCPF
CTGƂPCPEKCNCUUGVUYJKEJCTGETGFKVKORCKTGFQPKPKVKCN GZRGEVGFETGFKVNQUUKUQPN[TGEQIPKUGFQTTGNGCUGF
TGEQIPKVKQP VQVJGGZVGPVVJCVVJGTGKUCUWDUGSWGPVEJCPIGKP
expected credit loss

31 (c) Factors considered in the Assessment of Expected Credit Losses
31 (c) i -}wV>ÌVÀi>Ãi
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6JG)TQWREQPUKFGTUCPGZRQUWTGVQJCXGCUKIPKƂECPVN[KPETGCUGFETGFKVTKUMYJGPEQPVTCEVWCNRC[OGPVUQHCEWUVQOGTCTGOQTGVJCP
FC[URCUVFWGKPCEEQTFCPEGYKVJTGDWVVCDNGRTGUWORVKQPKP5.(45
6JG)TQWRKPFKXKFWCNN[TGXKGYUCVGCEJTGRQTVKPIFCVGNQCPUCPFCFXCPEGUCDQXGCRTGFGƂPGFVJTGUJQNFVQKFGPVKH[YJGVJGTVJGETGFKV
TKUMJCUKPETGCUGFUKIPKƂECPVN[UKPEGQTKIKPCVKQPDGHQTGCPGZRQUWTGKUKPFGHCWNV5WEJKPFKECVQTUKPENWFGVJGHQNNQYKPIKPVGTCNKC
r 9JGPTGCUQPCDNGCPFUWRRQTVCDNGHQTGECUVUQHHWVWTGGEQPQOKEEQPFKVKQPUFKTGEVN[CHHGEVVJGRGTHQTOCPEGQHCEWUVQOGTITQWRQH
EWUVQOGTURQTVHQNKQUQTKPUVTWOGPVU
r 9JGPVJGTGKUCUKIPKƂECPVEJCPIGKPVJGIGQITCRJKECNNQECVKQPUQTPCVWTCNECVCUVTQRJGUVJCVFKTGEVN[KORCEVVJGRGTHQTOCPEGQHC
EWUVQOGTITQWRQHEWUVQOGTUQTCPKPUVTWOGPV
r9JGPVJGXCNWGQHEQNNCVGTCNKUUKIPKƂECPVN[TGFWEGFCPFQTTGCNK\CDKNKV[QHEQNNCVGTCNKUFQWDVHWN
r 9JGPCEWUVQOGTKUUWDLGEVVQNKVKICVKQPVJCVUKIPKƂECPVN[CHHGEVUVJGRGTHQTOCPEGQHVJGETGFKVHCEKNKV[
r (TGSWGPVEJCPIGUKPVJGUGPKQTOCPCIGOGPVQHCPKPUVKVWVKQPCNEWUVQOGT
r &GNC[KPVJGEQOOGPEGOGPVQHDWUKPGUUQRGTCVKQPURTQLGEVUD[OQTGVJCPVYQ[GCTUHTQOVJGQTKIKPCNN[CITGGFFCVG
r /QFKƂECVKQPQHVGTOUTGUWNVKPIKPEQPEGUUKQPUKPENWFKPIGZVGPUKQPUFGHGTOGPVQHRC[OGPVUYCKXGTQHEQXGPCPVU
r 9JGPVJGEWUVQOGTKUFGEGCUGFKPUQNXGPV
r 9JGPVJGDCPMKUWPCDNGVQEQPVCEVQTƂPFVJGEWUVQOGT
r #HCNNQHQTOQTGKPVJGVWTPQXGTCPFQTRTQƂVDGHQTGVCZQHVJGEWUVQOGTYJGPEQORCTGFVQVJGRTGXKQWU[GCT
r 'TQUKQPKPPGVYQTVJD[OQTGVJCPYJGPEQORCTGFVQVJGRTGXKQWU[GCT
%TGFKVHCEKNKVKGUGZRQUWTGUYJKEJJCXGQPGQTOQTGQHVJGCDQXGKPFKECVQTUCTGVTGCVGFCUHCEKNKVKGUYKVJUKIPKƂECPVKPETGCUGKPETGFKVTKUM
CPFCUUGUUGFCEEQTFKPIN[KP'%.EQORWVCVKQPU6JG)TQWRTGIWNCTN[OQPKVQTUVJGGHHGEVKXGPGUUQHVJGETKVGTKCWUGFVQKFGPVKH[UKIPKƂECPV
KPETGCUGKPETGFKVTKUMVQEQPƂTOVJCVVJGETKVGTKCKUECRCDNGQHKFGPVKH[KPIUKIPKƂECPVKPETGCUGKPETGFKVTKUMDGHQTGCPGZRQUWTGKUKPFGHCWNV
r4GRC[OGPVFGHGTTCNRCEMCIGU
+PTGURGEVQHHCEKNKVKGUUWDLGEVVQVJGTGRC[OGPVFGHGTTCNCTTCPIGOGPVUCPCUUGUUOGPVQH5+%4JCUDGGPECTTKGFQWVDCUGFQPXCTKQWU
HCEVQTUUWEJCUVJGEWUVQOGToUEWTTGPVƂPCPEKCNRQUKVKQPHWVWTGGCTPKPIUECRCEKV[YJGVJGTVJGEWUVQOGTJCUCXCKNGFVJGTGRC[OGPV
FGHGTTCNCTTCPIGOGPVUQXGTCPGZVGPFGFRGTKQFQHVKOGCPFVJGUGEVQTUKPYJKEJVJGEWUVQOGTUQRGTCVGDCUGFQPYJKEJVJGHCEKNKVKGUCTG
ECVGIQTKUGFKPVQTKUMECVGIQTKGU5+%4KUVJGPFGVGTOKPGFDCUGFQPVJGTGUWNVKPITKUMECVGIQTKUCVKQP$CUGFQPVJGTKUMECVGIQTKUCVKQP
HCEKNKVKGUJCXGDGGPUVTGUUVGUVGFCPFTGSWKTGFQXGTNC[UJCXGDGGPOCFG
• Economic conditions
$CPMVCMGUKPVQEQPUKFGTCVKQPVJGWPEGTVCKPKVKGUTGNCVKPIVQVJGEWTTGPVGEQPQOKEEQPFKVKQPUKPQTFGTVQCUUGUUECUJƃQYRTQLGEVKQPUHQT
HWVWTGTGEQXGTKGU6JGOCKPHCEVQTUVJCVECWUGWPEGTVCKPVKGUTGICTFKPIVJKUCRRNKECVKQPTGNCVGVQVJGWPUVCDNGGEQPQOKEGPXKTQPOGPV
RTGXCKNKPIKPVJGEQWPVT[CPFVQVJGTGUWNVCPVKORNKECVKQPUQPVJGETGFKVYQTVJKPGUUQHVJGDQTTQYGTU
31 (c) ii iwÌviv>ÕÌ>`

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6JG)TQWRIGPGTCNN[EQPUKFGTUƂPCPEKCNCUUGVUCUFGHCWNVGFCPFVJGTGHQTGCUUGUUGFKP5VCIG
CUETGFKVKORCKTGFHQT'%.ECNEWNCVKQPU
YJGP
r 6JGDQTTQYGTKUWPNKMGN[VQRC[KVUQDNKICVKQPUVQVJG)TQWRKPHWNNYKVJQWVTGEQWTUGD[VJG)TQWRVQCEVKQPUUWEJCUTGCNK\KPIUGEWTKV[
KH
CP[KUJGNFQT
• The borrower becomes 90 days past due on its contractual payments.
+PCFFKVKQPVJG)TQWRENCUUKƂGUVJGƂPCPEKCNKPXGUVOGPVU
GZENWFKPIUGEWTKVKGUKUUWGFD[)QXGTPOGPVQH5TK.CPMCWPFGT5VCIGYJGP
VJGGZVGTPCNETGFKVTCVKPICUUKIPGFVQVJGRCTVKEWNCTKPXGUVOGPVKUpFGHCWNVq
+PCUUGUUKPIYJGVJGTCDQTTQYGTKUKPFGHCWNV)TQWRTGXKGYUKVUKPFKXKFWCNN[UKIPKƂECPVNQCPUCPFCFXCPEGUCDQXGCRTGFGƂPGFVJTGUJQNF
CVGCEJTGRQTVKPIFCVG6JG)TQWREQPUKFGTUEWUVQOGTUYKVJQPGQTOQTGQHVJGFGHCWNVKPFKECVQTUCUETGFKVKORCKTGF=(WTVJGTCURGT
)WKFGNKPGUVQ.KEGPUGF$CPMUQPVJG#FQRVKQPQH5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN+PUVTWOGPVUqKUUWGFD[%GPVTCN
$CPMQH5TKNCPMCCNNVJGETGFKVHCEKNKVKGUEWUVQOGTUENCUUKƂGFCUPQPRGTHQTOKPICURGT%GPVTCN$CPMQH5TK.CPMC&KTGEVKQPUCTGCUUGUUGFCU
5VCIGGZRQUWTGU?
FINANCIAL REPORTS
31 (c) iii `wi`>V>čÃÃiÌÃ
6JG)TQWRUQOGVKOGUOCMGUEQPEGUUKQPUQTOQFKƂECVKQPUVQVJGQTKIKPCNVGTOUQHNQCPUCUTGURQPUGVQVJGDQTTQYGToUƂPCPEKCN
FKHƂEWNVKGUTCVJGTVJCPVCMKPIRQUUGUUKQPQTVQQVJGTYKUGGPHQTEGEQNNGEVKQPQHEQNNCVGTCN5WEJEQPEGUUKQPUQTOQFKƂECVKQPUCTGRTQXKFGF
CUCTGUWNVQHVJGDQTTQYGToURTGUGPVQTGZRGEVGFƂPCPEKCNFKHƂEWNVKGUCPFVJG)TQWRYQWNFPQVJCXGCITGGFVQVJGOKHVJGDQTTQYGTJCF
DGGPƂPCPEKCNN[JGCNVJ[6JKUOC[KPXQNXGGZVGPFKPIVJGRC[OGPVCTTCPIGOGPVUCPFVJGCITGGOGPVQHPGYNQCPEQPFKVKQPU1PEGVJG
VGTOUJCXGDGGPTGPGIQVKCVGFCP[KORCKTOGPVKUOGCUWTGFWUKPIVJGQTKIKPCN'+4CUECNEWNCVGFDGHQTGVJGOQFKƂECVKQPQHVGTOU&G
TGEQIPKVKQPFGEKUKQPUCPFENCUUKƂECVKQPDGVYGGP5VCIGCPF5VCIGCTGFGVGTOKPGFQPCECUGD[ECUGDCUKU
9JGPVJGNQCPJCUDGGPTGPGIQVKCVGFQTOQFKƂGFDWVPQVFGTGEQIPKUGFCTGCUUGUUOGPVKUOCFGYJGVJGTVJGTGJCUDGGPCUKIPKƂECPV
KPETGCUGKPETGFKVTKUMCUUGVQWVKP0QVG
EKVQVJGƂPCPEKCNUVCVGOGPVU#EEQTFKPIN[CNNTGUEJGFWNGFNQCPUCTGENCUUKƂGFCU5VCIG
WPNGUUWRITCFGFFWGVQUCVKUHCEVQT[RGTHQTOKPIRGTKQF(WTVJGTNQCPUYJKEJJCXGDGGPTGUVTWEVWTGFWRVQVYQVKOGUWPNGUUWRITCFGF
FWGVQUCVKUHCEVQT[RGTHQTOKPIRGTKQFCTGENCUUKƂGFCU5VCIGYJKNGUWEJNQCPUYJKEJJCXGDGGPTGUVTWEVWTGFOQTGVJCPVYQVKOGUCTG
ENCUUKƂGFCU5VCIGKPCEEQTFCPEGYKVJ$CPMKPI#EV&KTGEVKQP0QQHQPp%NCUUKƂECVKQP4GEQIPKVKQPCPF/GCUWTGOGPVQHETGFKV
HCEKNKVKGUKP.KEGPUGF$CPMUq
31 (d) Movement between the Stages
(KPCPEKCNCUUGVUECPDGVTCPUHGTTGFDGVYGGPVJGFKHHGTGPVECVGIQTKGU
QVJGTVJCP21%+FGRGPFKPIQPVJGKTTGNCVKXGEJCPIGKPETGFKVTKUM
UKPEGKPKVKCNTGEQIPKVKQP(KPCPEKCNKPUVTWOGPVUCTGVTCPUHGTTGFQWVQH5VCIGKHVJGKTETGFKVTKUMKUPQNQPIGTEQPUKFGTGFVQDGUKIPKƂECPVN[
KPETGCUGFUKPEGKPKVKCNTGEQIPKVKQPDCUGFQPVJGCUUGUUOGPVFGUETKDGFCDQXG(KPCPEKCNKPUVTWOGPVUCTGVTCPUHGTTGFQWVQH5VCIGYJGP
VJG[PQNQPIGTGZJKDKVCP[GXKFGPEGQHETGFKVKORCKTOGPVCUFGUETKDGFCDQXG(WTVJGTTGUVTWEVWTGFHCEKNKVKGUCTGWRITCFGFKPCEEQTFCPEG
YKVJDQCTFCRRTQXGFRQNKEKGUWRQPVJGUGVVNGOGPVQHFWGRC[OGPVCPF$CPMKUUCVKUƂGFVJGEWUVQOGTKUCDNGVQUGTXKEGFGDVQDNKICVKQPU
WRVQCHQTGUGGCDNGHWVWTGCPFVJGWRITCFGFETGFKVHCEKNKV[JCUGZJKDKVGFCUWUVCKPGFVTGPFUVCVWUQHKORTQXGOGPVVQLWUVKH[CPKORTQXGF
ENCUUKƂECVKQPKPCEEQTFCPEGYKVJ$CPMKPI#EV&KTGEVKQP0QQHQPp%NCUUKƂECVKQP4GEQIPKVKQPCPF/GCUWTGOGPVQH%TGFKV(CEKNKVKGU
KP.KEGPUGF$CPMUq
31 (e) Assessment of Expected Credit Losses on Financial Assets
6JG)TQWRECNEWNCVGU'%.UDCUGFQPRTQDCDKNKV[YGKIJVGFUEGPCTKQUVQOGCUWTGVJGGZRGEVGFECUJUJQTVHCNNUFKUEQWPVGFCVCP
CRRTQZKOCVKQPVQVJG'+4#ECUJUJQTVHCNNKUVJGFKHHGTGPEGDGVYGGPVJGECUJƃQYUVJCVCTGFWGVQVJG)TQWRKPCEEQTFCPEGYKVJVJG
EQPVTCEVCPFVJGECUJƃQYUVJCVVJG)TQWRGZRGEVUVQTGEGKXG
7KHNH\HOHPHQWVRI(&/FRPSXWDWLRQVDUHDVIROORZV
Probability of Default (PD):6JGRTQDCDKNKV[QHFGHCWNVKUCPGUVKOCVGQHVJGNKMGNKJQQFQHCDQTTQYGTFGHCWNVKPIQPKVUƂPCPEKCNQDNKICVKQPU
#FGHCWNVOC[QPN[JCRRGPCVCEGTVCKPVKOGQXGTVJGCUUGUUGFRGTKQFKHVJGHCEKNKV[JCUPQVDGGPRTGXKQWUN[FGTGEQIPKUGFCPFKUUVKNNKP
VJGRQTVHQNKQ6JG)TQWRGUVKOCVGUVJG2TQDCDKNKV[QH&GHCWNV
2&DCUGFQPJKUVQTKECNKPHQTOCVKQPYKVJTGICTFVQFGNKPSWGPE[QHNQCPUCPF
CFXCPEGU+PVJKURTQEGUUJKUVQTKECNKPHQTOCVKQPRGTVCKPKPIVQ[GCTUJCXGDGGPWUGFFGRGPFKPIQPVJGPCVWTGQHVJGRTQFWEV
Exposure at Default (EAD): The exposure at default represents the expected exposure in the event of a default. The Group estimates
'#&VCMKPIKPVQCEEQWPVVJGTGRC[OGPVQHRTKPEKRCNCPFKPVGTGUVHTQOVJGTGRQTVKPIFCVGVQVJGFGHCWNVGXGPVVQIGVJGTYKVJCP[GZRGEVGF
FTCYFQYPUQHEQOOKVVGFHCEKNKVKGU6QECNEWNCVGVJG'#&HQTC5VCIGNQCPVJG)TQWRCUUGUUGUVJGRQUUKDNGFGHCWNVGXGPVUYKVJKP
OQPVJU(QT5VCIG5VCIGCPF21%+ƂPCPEKCNCUUGVUVJGGZRQUWTGCVFGHCWNVKUEQPUKFGTGFHQTGXGPVUQXGTVJGNKHGVKOGQHVJG
instruments.
/RVV*LYHQ'HIDXOW/*'6JGNQUUIKXGPFGHCWNVKUCPGUVKOCVGQHVJGNQUUCTKUKPIKPVJGECUGYJGTGCFGHCWNVQEEWTUCVCIKXGPVKOG+V

KUDCUGFQPVJGFKHHGTGPEGDGVYGGPVJGEQPVTCEVWCNECUJƃQYUFWGCPFVJQUGVJCVVJG)TQWRYQWNFGZRGEVVQTGEGKXGKPENWFKPIHTQO
VJGTGCNKUCVKQPQHCP[EQNNCVGTCN+VKUWUWCNN[GZRTGUUGFCUCRGTEGPVCIGQHVJG'#&6JG)TQWRUGIOGPVUKVUNGPFKPIRQTVHQNKQKPVQ
JQOQIGPGQWURQTVHQNKQUDCUGFQPMG[EJCTCEVGTKUVKEUVJCVCTGTGNGXCPVVQVJGGUVKOCVKQPQHHWVWTGECUJƃQYU6JGNQUUIKXGPFGHCWNVKU
GUVKOCVGFDCUGFQPJKUVQTKECNN[EQNNGEVGFNQUUFCVCCPFKUWUWCNN[GZRTGUUGFCUCRGTEGPVCIGQHVJG'#&
6JGECNEWNCVKQPQH'%.UKPENWFKPIVJGGUVKOCVKQPQHVJGGZRGEVGFRGTKQFQHGZRQUWTGCPFFKUEQWPVTCVGKUOCFGQPCPKPFKXKFWCNDCUKU
HQTKPFKXKFWCNN[UKIPKƂECPVNQCPUCPFQPCEQNNGEVKXGDCUKUHQTQVJGTNQCPU6JGEQNNGEVKXGCUUGUUOGPVUCTGOCFGUGRCTCVGN[HQTRQTVHQNKQUQH
HCEKNKVKGUYKVJUKOKNCTETGFKVTKUMEJCTCEVGTKUVKEU

ˀ5HYROYLQJIDFLOLWLHV
6JG)TQWRoURTQFWEVQHHGTKPIKPENWFGUCXCTKGV[QHEQTRQTCVG5/'CPFTGVCKNQXGTFTCHVCPFETGFKVECTFHCEKNKVKGU6JG)TQWRTGXKGYUVJG
UCPEVKQPNKOKVUCVNGCUVCPPWCNN[CPFVJGTGHQTGJCUVJGTKIJVVQECPEGNCPFQTTGFWEGVJGNKOKVU)TQWRECNEWNCVGUQPN[VJGOQPVJ'%.
O'%.CNNQYCPEGQPVJGUGHCEKNKVKGUVQTGƃGEVVJG)TQWRoUGZRGEVCVKQPUQHVJGEWUVQOGTDGJCXKQWTNKMGNKJQQFQHFGHCWNVCPFVJG$CPMoU
HWVWTGTKUMOKVKICVKQPRTQEGFWTGUYJKEJEQWNFKPENWFGTGFWEKPIQTECPEGNNKPIVJGHCEKNKVKGU6JG'#&KUCTTKXGFD[VCMKPIVJGOCZKOWOQH
GKVJGTUCPEVKQPGFNKOKVCFLWUVGFHQT%TGFKV%QPXGTUKQP(CEVQT
%%(CPFVJGITQUUECTT[KPICOQWPVQHVJGNQCP
WVKNKUGFCOQWPV
6JGQPIQKPICUUGUUOGPVQHYJGVJGTCUKIPKƂECPVKPETGCUGKPETGFKVTKUMJCUQEEWTTGFHQTTGXQNXKPIHCEKNKVKGUKUUKOKNCTVQQVJGTNGPFKPI
RTQFWEVU6JKUKUDCUGFQPUJKHVUKPVJGEWUVQOGToUFGNKPSWGPE[
ˀ8QGUDZQORDQFRPPLWPHQWV
9JGPGUVKOCVKPINKHGVKOG'%.
.6'%.UHQTWPFTCYPNQCPEQOOKVOGPVUVJG)TQWRGUVKOCVGUVJGGZRGEVGFRQTVKQPQHVJGNQCP
EQOOKVOGPVVJCVYKNNDGFTCYPFQYPQXGTKVUGZRGEVGFNKHGCPF'%.KUTGEQIPKUGFDCUGFQPRTQDCDKNKV[QHFGHCWNVNQUUIKXGPFGHCWNVCPF
GEQPQOKEHCEVQTCFLWUVOGPV6JG'%.EQORQPGPVHQTNQCPEQOOKVOGPVUNGVVGTUQHETGFKVCPFCEEGRVCPEGUKUTGEQIPKUGFYKVJKPpQVJGT
NKCDKNKVKGUq
• Financial guarantee contracts

6JG)TQWRGUVKOCVGU'%.UHQTƂPCPEKCNIWCTCPVGGEQPVTCEVUDCUGFQPVJGRTGUGPVXCNWGQHVJGGZRGEVGFRC[OGPVUVQTGKODWTUGVJG
JQNFGTHQTCETGFKVNQUUVJCVKVKPEWTU6JGUJQTVHCNNUCTGFKUEQWPVGFD[VJGTKUMCFLWUVGFKPVGTGUVTCVGTGNGXCPVVQVJGGZRQUWTG6JG'%.
EQORQPGPVTGNCVGFVQVJGƂPCPEKCNIWCTCPVGGEQPVTCEVUCTGTGEQIPKUGFYKVJKPpQVJGTNKCDKNKVKGUq
ˀ5HFRJQLWLRQRIH[SHFWHGFUHGLWORVVSURYLVLRQVRQJRYHUQPHQWVHFXULWLHV
$CPMFQGUPQVTGEQIPKUGKORCKTOGPVRTQXKUKQPUKPTGURGEVQH4WRGGFGPQOKPCVGFIQXGTPOGPVUGEWTKVKGUYJKNGTGEQIPKVKQPQHKORCKTOGPV
QPHQTGKIPEWTTGPE[FGPQOKPCVGFIQXGTPOGPVUGEWTKVKGUKUFGVGTOKPGFDCUGFQPVJGCRRNKECDNGGZRQUWTGCVFGHCWNVRTQDCDKNKV[QHFGHCWNV
CPFNQUUIKXGPFGHCWNV
ˀ'HEWLQVWUXPHQWVPHDVXUHGDWIDLUYDOXHWKURXJK2&,
6JG'%.UHQTFGDVKPUVTWOGPVUOGCUWTGFCV(81%+FQPQVTGFWEGVJGECTT[KPICOQWPVQHVJGUGƂPCPEKCNCUUGVUKPVJGUVCVGOGPVQH
ƂPCPEKCNRQUKVKQPYJKEJTGOCKPUCVHCKTXCNWG+PUVGCFCPCOQWPVGSWCNVQVJGCNNQYCPEGVJCVYQWNFCTKUGKHVJGCUUGVUYGTGOGCUWTGF
CVCOQTVKUGFEQUVKUTGEQIPKUGFKP1%+CUCPCEEWOWNCVGFKORCKTOGPVEJCTIGYKVJCEQTTGURQPFKPIEJCTIGVQRTQƂVQTNQUU6JG
CEEWOWNCVGFNQUUTGEQIPKUGFKP1%+KUTGE[ENGFVQVJGRTQƂVQTNQUUWRQPFGTGEQIPKVKQPQHVJGCUUGVU
ˀ)RUZDUG/RRNLQJ,QIRUPDWLRQ
6JG)TQWRKPEQTRQTCVGUHQTYCTFNQQMKPIKPHQTOCVKQPKPVQDQVJKVUCUUGUUOGPVCUVQYJGVJGTVJGETGFKVTKUMQHCPKPUVTWOGPVJCUKPETGCUGF
UKIPKƂECPVN[UKPEGKVUKPKVKCNTGEQIPKVKQPCPFKVUOGCUWTGOGPVQH'%.9JGPGUVKOCVKPIVJG'%.UVJG)TQWREQPUKFGTUVJTGGGEQPQOKE
UEGPCTKQU
DCUGECUGDGUVECUGCPFYQTUGECUG3WCPVKVCVKXGGEQPQOKEHCEVQTUCTGDCUGFQPGEQPQOKEFCVCCPFHQTGECUVURWDNKUJGFD[
%GPVTCN$CPMQH5TK.CPMCCPFYJGPUWEJKPHQTOCVKQPKUPQVCXCKNCDNGHQTGECUVURWDNKUJGFD[+PVGTPCVKQPCN/QPGVCT[(WPFCPF9QTNF$CPM
JCXGDGGPWUGF+PKVU'%.OQFGNUVJG)TQWRTGNKGUQPCDTQCFTCPIGQHHQTYCTFNQQMKPIKPHQTOCVKQPCUGEQPQOKEKPRWVUUWEJCU
Quantitative factors Qualitative factors
)&2ITQYVJ Government policies

+PƃCVKQP 5VCVWUQHKPFWUVT[DWUKPGUU
Interest rate 4GIWNCVQT[KORCEV
7PGORNQ[OGPVTCVGU
'ZEJCPIGTCVG
ˀ5HYHUVDORI,PSDLUPHQW
+HVJGCOQWPVQHCPKORCKTOGPVNQUUFGETGCUGUKPCUWDUGSWGPVRGTKQFCPFVJGFGETGCUGECPDGTGNCVGFQDLGEVKXGN[VQCPGXGPVQEEWTTKPI
CHVGTVJGKORCKTOGPVYCUTGEQIPKUGFVJGGZEGUUKUYTKVVGPDCEMVQVJGRTQƂVQTNQUUD[TGFWEKPIVJGKORCKTOGPVCNNQYCPEGCEEQTFKPIN[
ˀ:ULWHRIIRI̍QDQFLDODVVHWV
.QCPUCPFFGDVUGEWTKVKGUCTGYTKVVGPQHH
GKVJGTRCTVKCNN[QTKPHWNNYJGPVJGTGKUPQTGCUQPCDNGGZRGEVCVKQPQHTGEQXGTKPICƂPCPEKCN
CUUGVKPKVUGPVKTGV[QTCRQTVKQPVJGTGQH6JKUKUIGPGTCNN[VJGECUGYJGPVJG)TQWRFGVGTOKPGUVJCVVJGDQTTQYGTFQGUPQVJCXGCUUGVUQT
UQWTEGUQHKPEQOGVJCVEQWNFIGPGTCVGUWHƂEKGPVECUJƃQYUVQTGRC[VJGCOQWPVUUWDLGEVVQVJGYTKVGQHH6JKUCUUGUUOGPVKUECTTKGFQWVCV
individual asset level.
*QYGXGTƂPCPEKCNCUUGVUVJCVCTGYTKVVGPQHHEQWNFUVKNNDGUWDLGEVVQGPHQTEGOGPVCEVKXKVKGUKPQTFGTVQEQORN[YKVJVJG$CPMoURTQEGFWTGU
for recovery of amounts due.
FINANCIAL REPORTS
• Regulations issued by the Central Bank of Sri Lanka (CBSL)

5KPEGVJGQWVDTGCMQH%18+&s%$5.KUUWGFXCTKQWUEKTEWNCTUTGNCVKPIVQOQTCVQTKWOFGDVTGNKGHETGFKVUWRRQTVVQEWUVQOGTUCPF
KPFWUVTKGUVJTQWIJUEJGOGUQHHGTGFD[VJG)QXGTPOGPVVQUWRRQTVTGEQXGT[QHVJGGEQPQO[$CPMJCUVCMGPKPVQCEEQWPVVJGUGEKTEWNCTU
KPVJGTGEQIPKVKQPQHKPVGTGUVKPEQOGUVCIGYKUGENCUUKƂECVKQPQHHCEKNKVKGUCPFEQORWVCVKQPQHGZRGEVGFETGFKVNQUU#NNOQTCVQTKWOUFGDV
TGNKGHETGFKVUWRRQTVUEJGOGUITCPVGFVQEWUVQOGTUDCUGFQPTGIWNCVKQPUKUUWGFD[%GPVTCN$CPMQH5TK.CPMCGPFGFFWTKPI
31 (f) #%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
6JGOGCUWTGOGPVQHKORCKTOGPVNQUUGUWPFGT5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p(KPCPEKCN+PUVTWOGPVUq
5.(45TGSWKTGU
LWFIGOGPVCETQUUCNNECVGIQTKGUQHƂPCPEKCNCUUGVUKPRCTVKEWNCTVJGGUVKOCVKQPQHVJGCOQWPVCPFVKOKPIQHHWVWTGECUJƃQYUCPF
EQNNCVGTCNXCNWGUYJGPFGVGTOKPKPIKORCKTOGPVNQUUGUCPFVJGCUUGUUOGPVQHCUKIPKƂECPVKPETGCUGKPETGFKVTKUM6JGUGGUVKOCVGUCTG
FTKXGPD[CPWODGTQHHCEVQTUEJCPIGUQHYJKEJECPTGUWNVKPFKHHGTGPVNGXGNUQHKORCKTOGPVCNNQYCPEGU
6JG)TQWRoU'ZRGEVGF%TGFKV.QUU
'%.ECNEWNCVKQPUCTGVJGQWVRWVUQHEQORNGZOQFGNUYKVJCPWODGTQHWPFGTN[KPICUUWORVKQPU
TGICTFKPIVJGEJQKEGQHXCTKCDNGKPRWVUCPFVJGKTKPVGTFGRGPFGPEKGU'NGOGPVUQHVJG'%.OQFGNUVJCVCTGEQPUKFGTGFHQTCEEQWPVKPI
LWFIGOGPVUCPFGUVKOCVGUKPENWFG
r VJG)TQWRoUETKVGTKCHQTCUUGUUKPIYJGVJGTVJGTGJCUDGGPCUKIPKƂECPVKPETGCUGKPETGFKVTKUMCUCTGUWNVQHYJKEJCNNQYCPEGUHQTƂPCPEKCN
CUUGVUUJQWNFDGOGCUWTGFQPC.KHG6KOG'ZRGEVGF%TGFKV.QUU
.6'%.DCUKU
r VJGUGIOGPVCVKQPQHƂPCPEKCNCUUGVUYJGPVJGKT'%.KUCUUGUUGFQPCEQNNGEVKXGDCUKU
r VJGUGNGEVKQPQHCPGUVKOCVKQPVGEJPKSWGQTOQFGNNKPIOGVJQFQNQI[PQVKPIVJCVVJGOQFGNNKPIQHVJG)TQWRoU'%.GUVKOCVGUCTG
EQORNGZCPF
r VJGUGNGEVKQPQHKPRWVUHQTVJQUGOQFGNUCPFVJGKPVGTFGRGPFGPEKGUDGVYGGPVJQUGKPRWVU
6JGLWFIGOGPVUCPFCUUQEKCVGFCUUWORVKQPUJCXGDGGPOCFGYKVJKPVJGEQPVGZVQHVJGKORCEVQHRTGXCKNKPIGEQPQOKEEQPFKVKQPUCPF
%18+&CPFTGƃGEVJKUVQTKECNGZRGTKGPEGCPFQVJGTHCEVQTUVJCVCTGEQPUKFGTGFVQDGTGNGXCPVKPENWFKPIGZRGEVCVKQPUQHHWVWTGGXGPVU
VJCVCTGDGNKGXGFVQDGTGCUQPCDNGWPFGTVJGEKTEWOUVCPEGU#EEQTFKPIN[VJG)TQWRoU'%.GUVKOCVGUCTGKPJGTGPVN[WPEGTVCKPCPFCUC
TGUWNVCEVWCNTGUWNVUOC[FKHHGTHTQOVJGUGGUVKOCVGU
6JGHQNNQYKPIVCDNGUWOOCTKUGUVJGMG[LWFIGOGPVUCPFCUUWORVKQPUWUGFD[VJG$CPMKPTGNCVKQPVQVJG'%.OQFGNKPRWVUCPFVJG
interdependencies between those inputs.

,WFIGOGPV Description Considerations for the year ended 31st December 2022
Assumption
&GVGTOKPKPI +PVJGOGCUWTGOGPVQH'%.LWFIGOGPVKUKPXQNXGFKP +PTGURQPUGVQVJGKORCEVUQH%18+&CPF

when a UGVVKPIVJGTWNGUCPFVTKIIGTRQKPVUVQFGVGTOKPGYJGVJGT EWTTGPVGEQPQOKEEQPFKVKQPUXCTKQWUOQTCVQTKWO
5KIPKƂECPV VJGTGJCUDGGPC5+%4UKPEGKPKVKCNTGEQIPKVKQPQHCNQCP debt concessionary schemes have been offered to
Increase in YJKEJYQWNFTGUWNVKPVJGƂPCPEKCNCUUGVOQXKPIHTQO GNKIKDNGEWUVQOGTU9JGPCEWUVQOGTKUƂTUVRTQXKFGF
%TGFKV4KUM 5VCIGVQ5VCIG6JKUKUCMG[CTGCQHLWFIGOGPVUKPEG with assistance the Group does not consider that
5+%4JCU VTCPUKVKQPHTQO5VCIGVQ5VCIGKPETGCUGUVJG'%.HTQO KVCWVQOCVKECNN[TGUWNVUKPC5+%4CPFCEQPUGSWGPV

occurred OQPVJ'%.VQNKHGVKOG'%. KORCEVQP'%.YJGPCUUGUUKPIRTQXKUKQPU5WDUGSWGPV
VQVCMGWRCUUGUUOGPVUJCXGDGGPECTTKGFQWVDCUGF
on the discussions with the customers on the future
DWUKPGUUECUJƃQYUƂPCPEKCNRQUKVKQPVJGUGEVQTUKP
which the businesses operate and ability to recommence
NQCPTGRC[OGPVUCVVJGGPFQHVJGOQTCVQTKWOFGDV
concessionary period to conclude whether there is a
SICR.
/GCUWTKPI 6JG2TQDCDKNKV[QH&GHCWNV
2&.QUU)KXGP&GHCWNV
.)& 6JG2&'#&CPF.)&OQFGNUCTGUWDLGEVVQVJG
12 month CPF'ZRQUWTGCV&GHCWNV
'#&ETGFKVTKUMRCTCOGVGTUWUGF )TQWRoURQNKE[QPKORCKTOGPVCUUGUUOGPV
expected KPFGVGTOKPKPI'%.CTGRQKPVKPVKOGOGCUWTGUTGƃGEVKPI
6JGTGYGTGPQOCVGTKCNEJCPIGUVQVJGRQNKEKGUFWTKPI
credit losses VJGTGNGXCPVHQTYCTFNQQMKPIKPHQTOCVKQPFGVGTOKPGF
the year ended 31st December 2022. Due to the
and lifetime D[OCPCIGOGPV,WFIGOGPVKUKPXQNXGFKPFGVGTOKPKPI
KORNKECVKQPUQHOQTCVQTKWOFGDVEQPEGUUKQPCT[UEJGOGU
expected YJKEJHQTYCTFNQQMKPIKPHQTOCVKQPXCTKCDNGUCTGTGNGXCPV
QP2&UCPF.)&U
FWGVQNKOKVGFOQXGOGPVUVQ5VCIG
credit losses HQTRCTVKEWNCTNGPFKPIRQTVHQNKQUCPFHQTFGVGTOKPKPIGCEJ
CPF5VCIGCPFEWTTGPVGEQPQOKEEQPFKVKQP
RQTVHQNKQoURQKPVKPVKOGUGPUKVKXKV[
adjustments have been made as overlays based on
UVTGUUVGUVKPICPFJKUVQTKERCVVGTPUVQDGVVGTTGƃGEVVJG
CFGSWCE[QH'%.
+PCFFKVKQPLWFIGOGPVKUTGSWKTGFYJGTGDGJCXKQWTCN 6JGTGYGTGPQOCVGTKCNEJCPIGUVQDGJCXKQWTCNNKHGVKOG
EJCTCEVGTKUVKEUCTGCRRNKGFKPGUVKOCVKPIVJGNKHGVKOGQHC GUVKOCVGUFWTKPIVJG[GCTGPFGFUV&GEGODGT
HCEKNKV[VQDGWUGFKPOGCUWTKPI'%.
$CUGECUG 6JG)TQWRFGTKXGUCHQTYCTFNQQMKPIDCUGECUGGEQPQOKE #UCV&GEGODGTVJGDCUGECUGCUUWORVKQPU

economic UEGPCTKQYJKEJTGƃGEVUVJG$CPMoUXKGYQHVJGOQUVNKMGN[ JCXGDGGPWRFCVGFVQTGƃGEVVJGGXQNXKPIUKVWCVKQPYKVJ
forecast HWVWTGOCETQGEQPQOKEEQPFKVKQPU TGURGEVVQRTGXCKNKPIGEQPQOKEEQPFKVKQPUCPFGEQPQOKE
HQTGECUVURTQXKFGFD[VJG%GPVTCN$CPMQH5TK.CPMC
+PVGTPCVKQPCN/QPGVCT[(WPFCPF9QTNF$CPM
Probability 2TQDCDKNKV[YGKIJVKPIQHGCEJGEQPQOKEUEGPCTKQKU 6JGMG[EQPUKFGTCVKQPHQTRTQDCDKNKV[YGKIJVKPIUKPVJG

YGKIJVKPIQH FGVGTOKPGFD[OCPCIGOGPVEQPUKFGTKPIVJGTKUMUCPF EWTTGPVRGTKQFKUVJGRTGXCKNKPIWPEGTVCKPGEQPQOKE
each economic WPEGTVCKPVKGUUWTTQWPFKPIVJGDCUGECUGGEQPQOKEUEGPCTKQ conditions.
UEGPCTKQ
DCUG at each measurement date.
+PCFFKVKQPVQVJGDCUGECUGHQTGECUVYJKEJTGƃGEVUVJG
ECUGDGUVECUG
PGICVKXGGEQPQOKEEQPUGSWGPEGUQH%18+&CPF
and worse
EWTTGPVGEQPQOKEETKUKUITGCVGTYGKIJVCIGJCUDGGP
ECUGUEGPCTKQU
CRRNKGFVQVJGYQTUGECUGUEGPCTKQIKXGPVJG)TQWRoU
CUUGUUOGPVQHFQYPUKFGTKUMU6JGCUUKIPGFRTQDCDKNKV[
YGKIJVCIGUCTGUWDLGEVVQCJKIJFGITGGQHKPJGTGPV
uncertainty and therefore the actual outcomes may be
UKIPKƂECPVN[FKHHGTGPVVQVJQUGRTQLGEVGF
FINANCIAL REPORTS
,WFIGOGPV Description Considerations for the year ended 31st December 2022
Assumption
Post model 6GORQTCT[CFLWUVOGPVUVQVJG'%.CNNQYCPEGCTGWUGFKP /CPCIGOGPVJCUCRRNKGFCPWODGTQHCFLWUVOGPVUVQ

adjustments EKTEWOUVCPEGUYJGTGKVKULWFIGFVJCVVJGGZKUVKPIKPRWVU VJGOQFGNNGF'%.CURQUVOQFGNCFLWUVOGPVURTKOCTKN[
CUUWORVKQPUCPFOQFGNVGEJPKSWGUFQPQVECRVWTGCNN FWGVQVJGWPEGTVCKPV[CUUQEKCVGFYKVJRTGXCKNKPI
VJGTKUMHCEVQTUTGNGXCPVVQ)TQWRoUNGPFKPIRQTVHQNKQU uncertain economic conditions.
'OGTIKPINQECNQTINQDCNOCETQGEQPQOKEOKETQGEQPQOKE
QTRQNKVKECNGXGPVUCPFPCVWTCNFKUCUVGTUVJCVCTGPQV
KPEQTRQTCVGFKPVQVJGEWTTGPVRCTCOGVGTUTKUMTCVKPIU
QTHQTYCTFNQQMKPIKPHQTOCVKQPCTGGZCORNGUQHUWEJ
EKTEWOUVCPEGU6JGWUGQHOCPCIGOGPVQXGTNC[OC[
KORCEVVJGCOQWPVQH'%.TGEQIPKUGF
6JGWPEGTVCKPV[CUUQEKCVGFYKVJVJGRTGXCKNKPIGEQPQOKE Post model adjustments have been made to the modelled

conditions and the extent to which the actions of '%.RTQXKUKQPCICKPUVGZRQUWTGUVQVJGTKUMGNGXCVGF
IQXGTPOGPVUDWUKPGUUGUCPFEQPUWOGTUOKVKICVG UGEVQTUKFGPVKƂGFD[VJG)TQWR
the potentially adverse credit outcomes are not fully
KPEQTRQTCVGFKPVQGZKUVKPI'%.OQFGNU#EEQTFKPIN[
OCPCIGOGPVQXGTNC[UJCXGDGGPCRRNKGFVQGPUWTGETGFKV
provisions are appropriate.
31 (g) Movement in Impairment during the year
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
$CNCPEGCUCVUV,CPWCT[ 6,494,958 7,653,405
#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.% - -
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU 198,044 198,044
0GVKORCKTOGPV
TGXGTUCNEJCTIGHQTVJG[GCT=0QVG? 5,784,375 7,063,302
Balance as at 31st December [Note 31] 12,477,377 14,914,751
Stage 2
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU 707,420 707,420
0GVKORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? 5,339,312 5,336,892
Stage 3
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU 5,298,566 5,298,566
9TKVGQHHUFWTKPIVJG[GCT (699,711)
(1,141,747)

7RWDOLPSDLUPHQWDOORZDQFHIRU̍QDQFLDODVVHWVPHDVXUHGDWDPRUWLVHG
FRVW/RDQVDQGDGYDQFHVWRFXVWRPHUVbbb 87,240,402 92,981,122

31 (g) i Product wise Movement in Allowance for Impairment Losses - Bank
2022 2021
Lease Loans and 3DZQLQJ Total Total
5HFHLYDEOH 5HFHLYDEOHV
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
$CNCPEGCUCVUV,CPWCT[ 1,514,125 51,132,915 69,997 52,717,037
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU - 6,204,030 - 6,204,030
0GVKORCKTOGPVEJCTIGHQTVJG[GCT 1,073,966 27,925,236 19,844 29,019,046
9TKVGQHHUFWTKPIVJG[GCT (131,802) (567,909) - (699,711)

Balance as at 31st December 2,456,289 84,694,272 89,841 87,240,402
31 (g) ii Product wise Movement in Allowance for Impairment Losses - Group
2022 2021
Lease Loans and 3DZQLQJ Total Total
5HFHLYDEOH 5HFHLYDEOHV
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
$CNCPEGCUCVUV,CPWCT[ 2,524,650 55,067,401 61,858 57,653,909
#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.% - - - -
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU - 6,204,030 - 6,204,030
0GVKORCKTOGPVEJCTIGHQTVJG[GCT 1,344,635 28,856,663 63,632 30,264,930
9TKVGQHHUFWTKPIVJG[GCT (131,802) (1,009,945) - (1,141,747)

Balance as at 31st December 3,737,483 89,118,149 125,490 92,981,122
K /HDVH5HFHLYDEOHVbbbbbbb
#%%1706+0)21.+%;
#UUGVUNGCUGFVQEWUVQOGTUYJKEJVTCPUHGTUWDUVCPVKCNN[CNNVJGTKUMUCPFTGYCTFUCUUQEKCVGFYKVJQYPGTUJKRQVJGTVJCPNGICNVKVNGCTG
ENCUUKƂGFCUƂPCPEGNGCUGU#OQWPVUTGEGKXCDNGWPFGTƂPCPEGNGCUGUCTGENCUUKƂGFCUNGCUGTGEGKXCDNGUCPFRTGUGPVGFYKVJKPNQCPU
CPFCFXCPEGUVQEWUVQOGTUKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPCHVGTFGFWEVKQPQHWPGCTPGFNGCUGKPEQOGCPFVJGKORCKTOGPVHQT
TGPVCNUFQWDVHWNQHTGEQXGT[.GCUGTGEGKXCDNGUCTGEQNNGEVKXGN[CUUGUUGFHQTKORCKTOGPVKPCEEQTFCPEGYKVJVJGRQNKE[HQTCNNQYCPEGHQT
KORCKTOGPVNQUUGUCUIKXGPKP0QVG
DVQVJGƂPCPEKCNUVCVGOGPVU
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Total lease rentals receivable 84,912,133 105,044,928

7PGCTPGFNGCUGKPEQOG (14,109,354)
(19,113,579)

*URVVOHDVHUHFHLYDEOH 70,802,779 85,931,349
Impairment allowance for lease receivable (2,456,289)
(3,737,483)

1HWOHDVHUHFHLYDEOH 68,346,490 82,193,866
0GVNGCUGTGEGKXCDNGUYKVJKPQPG[GCT=0QVG
J
K? 27,026,605 31,121,193
0GVNGCUGTGEGKXCDNGUHTQOQPGVQƂXG[GCTU=0QVG
JKK? 40,996,015 50,747,054
0GVNGCUGTGEGKXCDNGUCHVGTƂXG[GCTU=0QVG
J
KKK? 323,870 325,619
68,346,490 82,193,866
FINANCIAL REPORTS
31 (h) i Net Lease Receivables within one year
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
6QVCNNGCUGTGPVCNUTGEGKXCDNGYKVJKPQPG[GCTHTQOVJGTGRQTVKPIFCVG 34,933,505 41,066,147

(7,984,487)

.GUU+ORCKTOGPVCNNQYCPEGHQTNGCUGTGEGKXCDNGU (971,303)
(1,960,467)

27,026,605 31,121,193
Î£® iÌi>Ãi,iViÛ>LiÃvÀiÌwÛiÞi>ÀÃ
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
6QVCNNGCUGTGPVCNUTGEGKXCDNGUHTQOQPGVQƂXG[GCTUHTQOVJGTGRQTVKPI
date 49,614,973 63,613,096
(11,100,843)

.GUU+ORCKTOGPVCNNQYCPEGHQTNGCUGTGEGKXCDNGU (1,473,347)
(1,765,199)

40,996,015 50,747,054
Î£® iÌi>Ãi,iViÛ>LiÃ>vÌiÀwÛiÞi>ÀÃ
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
6QVCNNGCUGTGPVCNUTGEGKXCDNGCHVGTƂXG[GCTUHTQOVJGTGRQTVKPIFCVG 363,655 365,685

7PGCTPGFNGCUGKPEQOG (28,146)
(28,249)

.GUU+ORCKTOGPVCNNQYCPEGHQTNGCUGTGEGKXCDNGU (11,639)
(11,817)

323,870 325,619
+ORCKTOGPVCNNQYCPEGHQTNGCUGTGEGKXCDNGUCTGKPENWFGFKPVJGUVCIGYKUGOQXGOGPVHQTKORCKTOGPVRTGUGPVGFKP0QVG
IVQVJGƂPCPEKCN
statements.
31 (i) Credit and Market risk

31 (j) $CPMKPI#EV&KTGEVKQP0QQHQPp%NCUUKƂECVKQP4GEQIPKVKQPCPF/GCUWTGOGPVQH%TGFKV(CEKNKVKGUKP.KEGPUGF$CPMUq$CPMKPI
#EV&KTGEVKQP0QQHQPp%NCUUKƂECVKQP4GEQIPKVKQPCPF/GCUWTGOGPVQH(KPCPEKCN#UUGVUQVJGTVJCP%TGFKV(CEKNKVKGUKP.KEGPUGF
$CPMUqCPF$CPMKPI#EV&KTGEVKQP0QQHQPp5WRRNGOGPVCT[%KTEWNCTVQ$CPMKPI#EV&KTGEVKQP1P%NCUUKƂECVKQP4GEQIPKVKQPCPF
/GCUWTGOGPVQH%TGFKV(CEKNKVKGUCPF1VJGT(KPCPEKCN#UUGVUKP.KEGPUGF$CPMUq
%GPVTCN$CPMQH5TK.CPMCQPVJCPFVJ5GRVGODGTKUUWGFVJGCDQXG&KTGEVKQPUYKVJCXKGYVQHWTVJGTUVTGPIVJGPKPICPFJCTOQPKUKPI
VJGTGIWNCVQT[HTCOGYQTMQPENCUUKƂECVKQPTGEQIPKVKQPCPFOGCUWTGOGPVQHETGFKVHCEKNKVKGUCPFQVJGTƂPCPEKCNCUUGVUYKVJVJG5TK.CPMC
#EEQWPVKPI5VCPFCTF5.(45sp(KPCPEKCN+PUVTWOGPVUqCPFGUVCDNKUJKPIEQPUKUVGPVCPFRTWFGPVRTCEVKEGUKPVJGDCPMKPIKPFWUVT[6JGUG
&KTGEVKQPUDGECOGGHHGEVKXGHTQOUV,CPWCT[CPFVJGRTGXKQWU&KTGEVKQPUKUUWGFD[%GPVTCN$CPMQH5TK.CPMCRGTVCKPKPIVQENCUUKƂECVKQP
KPEQOGTGEQIPKVKQPCPFRTQXKUKQPKPIQPQHNQCPUCPFCFXCPEGUCPFKPXGUVOGPVRQTVHQNKQUYGTGTGXQMGFHTQOUWEJFCVG

),1$1&,$/$66(760($685('$7$0257,6('&267'(%7$1'27+(5),1$1&,$/,167580(176b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVUJCUDGGPIKXGPKP
0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU
6JG)TQWROGCUWTGUƂPCPEKCNCUUGVUCVCOQTVKUGFEQUVKHDQVJQHVJGHQNNQYKPIEQPFKVKQPUCTGOGV
r6JGƂPCPEKCNCUUGVKUJGNFYKVJKPCDWUKPGUUOQFGNYKVJVJGQDLGEVKXGVQJQNFƂPCPEKCNCUUGVUKPQTFGTVQEQNNGEVEQPVTCEVWCNECUJƃQYU
r6JGEQPVTCEVWCNVGTOUQHVJGƂPCPEKCNCUUGVIKXGTKUGQPURGEKƂGFFCVGUVQECUJƃQYUVJCVCTG5QNGN[2C[OGPVUQH2TKPEKRCNCPF+PVGTGUV

522+QPVJGRTKPEKRCNCOQWPVQWVUVCPFKPI6JGUGEQPFKVKQPUCTGGZRNCKPGFKPFGVCKNKP0QVGCPFVQVJGƂPCPEKCNUVCVGOGPVU
#HVGTKPKVKCNOGCUWTGOGPVƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVUCTGUWDUGSWGPVN[
OGCUWTGFCVCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4NGUUCNNQYCPEGHQTKORCKTOGPVGZEGRVYJGPVJG)TQWRFGUKIPCVGU
CƂPCPEKCNCUUGVCUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU#OQTVKUGFEQUVKUECNEWNCVGFD[VCMKPIKPVQCEEQWPVCP[FKUEQWPVQT
RTGOKWOQPCESWKUKVKQPCPFHGGUCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JGCOQTVKUCVKQPKUKPENWFGFKPnKPVGTGUVKPEQOGoKPVJG
KPEQOGUVCVGOGPV6JGNQUUGUCTKUKPIHTQOKORCKTOGPVCTGTGEQIPKUGFKPnKORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGUoKPVJGKPEQOG
statement.
6JGUGCUUGVUCTGVGUVGFHQTKORCKTOGPVKPCEEQTFCPEGYKVJVJGETKVGTKCIKXGPKP0QVG
DVQVJGƂPCPEKCNUVCVGOGPVU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
,PSDLUPHQWRI̍QDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVWGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV
6JG)TQWRCUUGUUGUKORCKTOGPVHQTƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVUKPNKPGYKVJVJG
same principles used for assessment of impairment of loans and receivables.
6JGKORCKTOGPVNQUUQPƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVUKUFKUENQUGFKP0QVG
DVQ
VJGƂPCPEKCNUVCVGOGPVU

Rs 000 Rs 000
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNUJGNFD[VJG$CPM=0QVG
E? 216,516,708
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFUJGNFD[VJG$CPM=0QVG
F? 56,366,129
5TK.CPMCFGXGNQROGPVDQPFUJGNFD[VJG$CPM=0QVG
G? 32,110,047
5TK.CPMCUQXGTGKIPDQPFUJGNFD[VJG$CPM=0QVG
H? 209,640,517
(QTGKIPIQXGTPOGPVDQPFUJGNFD[VJG$CPM=0QVG
I? 123,417
3WQVGFFGDGPVWTGUJGNFD[VJG$CPM=0QVG
J? 10,495,483
7RWDO̍QDQFLDODVVHWVDWDPRUWLVHGFRVWʶGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV%DQN>1RWHD@ 525,252,301
$OORZDQFHIRULPSDLUPHQWRQ̍QDQFLDODVVHWVDWDPRUWLVHGFRVWʶGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV
Bank [Note 32 (b)] (76,460,427)

5VCIG (3,324)

5VCIG (75,795,353)
5VCIG (661,750)

1HW̍QDQFLDODVVHWVDWDPRUWLVHGFRVWGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV%DQNb 448,791,874
FINANCIAL REPORTS
32 FINANCIAL ASSETS MEASURED AT AMORTISED COST - DEBT AND OTHER FINANCIAL INSTRUMENTS (Contd.)

Rs 000 Rs 000
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFUJGNFD[UWDUKFKCTKGU=0QVG
K? 10,094,935
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNUJGNFD[UWDUKFKCTKGU=0QVG
L? 13,645,488
5TK.CPMCFGXGNQROGPVDQPFUJGNFD[UWDUKFKCTKGU=0QVG
M? -
3WQVGFFGDGPVWTGUJGNFD[UWDUKFKCTKGU=0QVG
N? 6,394,976
7PSWQVGFFGDGPVWTGUJGNFD[UWDUKFKCTKGU=0QVG
O? 860,750
1VJGTNQCPUCPFTGEGKXCDNGUJGNFD[UWDUKFKCTKGU=0QVG
P? 773,091
7RWDO̍QDQFLDODVVHWVDWDPRUWLVHGFRVWGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV6XEVLGLDULHVb 31,769,240
7RWDO̍QDQFLDODVVHWVDWDPRUWLVHGFRVWGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV*URXSb 557,021,541
#NNQYCPEGHQTKORCKTOGPVQPƂPCPEKCNCUUGVUCVCOQTVKUGFEQUVFGDVCPF
QVJGTƂPCPEKCNKPUVTWOGPVU)TQWR=0QVG
D? (77,234,526)

5VCIG (4,333)

5VCIG (75,795,353)
5VCIG (1,434,840)

1HW̍QDQFLDODVVHWVDWDPRUWLVHGFRVWʶGHEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV*URXSb 479,787,015
#UFGUETKDGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVUVJG$CPMTGENCUUKƂGF)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNU)QXGTPOGPVQH5TK.CPMC
VTGCUWT[DQPFUCPFKPVGTPCVKQPCNUQXGTGKIPDQPFKPXGUVOGPVUYJKEJYGTGRTGXKQWUN[ENCUUKƂGFCUƂPCPEKCNCUUGVUOGCUWTGFCV(CKT8CNWG
6JTQWIJ1VJGT%QORTGJGPUKXG+PEQOG
(81%+VQƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVYKVJGHHGEVHTQOUV#RTKN
D $QDO\VLVbbbbbbbbbbb
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
By Collateralisation
2NGFIGFCUEQNNCVGTCN 8,864,761 8,864,761
7PGPEWODGTGF 516,387,540 548,156,780
Total 525,252,301 557,021,541
By Currency
5TK.CPMCP4WRGG 283,378,320 315,147,560
7PKVGF5VCVGU&QNNCT 241,750,564 241,750,564
Euros 123,417 123,417
525,252,301 557,021,541
32 (a) (i) Disclosure as per Registered Stock and Securities Ordinance and Local Treasury Bills Ordinance Direction No 01 of 2019 on Repurchase and Reverse
Repurchase transactions of Dealer Direct Participants in Scripless Treasury Bonds and Scripless Treasury Bills
$CPMJCUCNNQECVGFIQXGTPOGPVUGEWTKVKGUCOQWPVKPIVQ4U$P
4U$PKPTGURGEVQHUGEWTKVKGUUQNFWPFGTTGRWTEJCUG
CITGGOGPVU
$CPMURQNKE[QPJCKTEWVUHQTTGRWTEJCUGCPFTGXGTUGTGRWTEJCUGVTCPUCEVKQPUCTGGZRNCKPGFDGNQY
$QCTFCRRTQXGFRQNKE[IWKFGNKPGQWVNKPGUVJGCNNQECVKQPQHUGEWTKVKGUCPFJCKTEWVTWNGUHQTTGRWTEJCUGCPFTGXGTUGTGRWTEJCUGCITGGOGPVUCPF
XCNWCVKQPRTQEGUU6JGRQNKE[JCUDGGPHQTOWNCVGFKPNKPGYKVJVJG&KTGEVKQP0QQHQP4GIKUVGTGF5VQEMCPF5GEWTKVKGU1TFKPCPEGCPF
.QECN6TGCUWT[$KNNU1TFKPCPEGKUUWGFD[VJG/QPGVCT[$QCTFQHVJG%GPVTCN$CPMQH5TK.CPMCVCMKPIKPVQEQPUKFGTCVKQPVJGOCTMGVRTCEVKEGU
5GEWTKVKGUCTGCNNQECVGFQDVCKPGFCURGTVJGUGVIWKFGNKPGU0QRGPCNVKGUYGTGNGXKGFQPVJG$CPMFWTKPIVJG[GCTHQTCP[PQPEQORNKCPEGYKVJ
the said Direction.

E 0RYHPHQWLQ,PSDLUPHQWGXULQJWKH\HDUbbbbbbbbbbbbbb
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Stage 1
0GVKORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? (10,728,883) (10,728,276)
Stage 2
$CNCPEGCUCVUV,CPWCT[ - -
'HHGEVQHGZEJCPIGTCVGƃWEVWCVKQPU 6,153,757 6,153,757
Balance as at 31st December 75,795,353 75,795,353
Stage 3
$CNCPEGCUCVUV,CPWCT[ 610,799 1,383,889
0GVKORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? 50,951
50,951

Balance as at 31st December 661,750 1,434,840
7RWDOLPSDLUPHQWDOORZDQFHIRU̍QDQFLDODVVHWVPHDVXUHGDWDPRUWLVHG
FRVW'HEWDQGRWKHU̍QDQFLDOLQVWUXPHQWV 76,460,427 77,234,526
32 (c) Government of Sri Lanka treasury bills held by the Bank

Rs 000 Rs 000
Year of Maturity
2023 216,516,708
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ELOOV%DQN 216,516,708
G *RYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGVKHOGE\WKH%DQNbb

Rs 000 Rs 000
Year of Maturity
2022 -
2023 8,629,674
2024 11,184,587
2025 25,202,875
1,358,320
2027 4,976,332
2028 1,204,018
2032 3,810,323
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGV%DQN 56,366,129
FINANCIAL REPORTS
H 6UL/DQNDGHYHORSPHQWERQGVKHOGE\WKH%DQNbbbbbb

Rs 000 Rs 000
Year of Maturity
2022 -
2023 32,110,047
7RWDO6UL/DQNDGHYHORSPHQWERQGV%DQN 32,110,047
I 6UL/DQNDVRYHUHLJQERQGVKHOGE\WKH%DQNbbbb

Rs 000 Rs 000
Year of Maturity
2022* 45,163,845
2023 36,627,357
2024 52,188,327
2025 29,753,157
23,061,642
2027 13,949,047
2028 8,204,898
2029 692,244
7RWDO6UL/DQNDVRYHUHLJQERQGV%DQN 209,640,517
%QORTKUGUQH4U$POCVWTGF5TK.CPMCPUQXGTGKIPDQPFUCPFEQWRQPTGEGKXCDNGUYJKEJTGOCKPWPRCKFCUCVUV&GEGODGT
$CPMoUKPXGUVOGPVUKP5TK.CPMCFGXGNQROGPVDQPFUCPF5TK.CPMCUQXGTGKIPDQPFURTGUGPVGFKP0QVG
GCPF
HJCXGDGGPENCUUKƂGF
KPUVCIGCPFCFGSWCVGRTQXKUKQPUJCXGDGGPOCFGDCUGFQPVJGKPHQTOCVKQPCXCKNCDNGCUCVVJGTGRQTVKPIFCVG
J )RUHLJQ*RYHUQPHQWERQGVKHOGE\WKH%DQNbbbbbbbbb

Rs 000 Rs 000
Year of Maturity
2042* 123,417
7RWDOIRUHLJQJRYHUQPHQWERQGV%DQN 123,417
6JGUGDQPFUYGTGKUUWGFD[VJG)QXGTPOGPVQH)TGGEGCPFJCXGDGGPENCUUKƂGFCUUVCIGHQT'ZRGEV%TGFKV.QUU
'%.EQORWVCVKQP$CPM
JCUTGEQIPKUGFCP'%.RTQXKUKQPCOQWPVKPIVQ4U/P
4U/PKPTGURGEVQHVJKUKPXGUVOGPV

K 4XRWHGGHEHQWXUHVKHOGE\WKH%DQNbbb

No of $PRUWLVHGb No of $PRUWLVHGb
Debentures Cost Debentures Cost
Rs 000 Rs 000
%URZQ &RPSDQ\3/&

FGDGPVWTGUTGFGGOCDNGQPUV/CTEJ 15,000,000 1,558,300
&RPPHUFLDO/HDVLQJ )LQDQFH3/&

OQPVJU6DKNNTCVG FGDGPVWTGUTGFGGOCDNGQPVJ5GRVGODGT 5,000,000 547,303
Lanka Orix Leasing Company PLC

FGDGPVWTGUTGFGGOCDNGQPVJ5GRVGODGT 5,000,000 519,520
MTD Walkers PLC

1DWLRQDO6DYLQJV%DQN

OQPVJU#92.4 FGDGPVWTGUTGFGGOCDNGQPVJ5GRVGODGT 50,000,000 5,267,151
People’s Leasing and Finance PLC

FGDGPVWTGUTGFGGOCDNGQPVJ,WN[ 20,000,000 2,064,877
Quoted Debentures - Bank 10,495,483
6JKUKPXGUVOGPVJCUDGGPECVGIQTKUGFCUUVCIGHQT'ZRGEVGF%TGFKV.QUU
'%.EQORWVCVKQP'%.RTQXKUKQPJCUDGGPTGEQIPKUGFKPHWNNHQT
this exposure.
L *RYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGVKHOGE\VXEVLGLDULHVbbbbbbb

Rs 000 Rs 000
Year of Maturity
2025 1,265,351
587,267
2027 951,599
2028 2,437,632
2029 1,486,553
2030 1,176,780
2031 563,251
2032 576,965
2033 486,517
2034 198,467
2044 138,036
2045 226,517
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGVVXEVLGLDULHV 10,094,935
M *RYHUQPHQWRI6UL/DQNDWUHDVXU\ELOOVKHOGE\VXEVLGLDULHVbbbbbbbb

Rs 000 Rs 000
Year of Maturity
2022 -
2023 13,645,488
7RWDO*RYHUQPHQWRI6UL/DQNDWUHDVXU\ELOOVVXEVLGLDULHV 13,645,488
FINANCIAL REPORTS
N 6UL/DQNDGHYHORSPHQWERQGVKHOGE\VXEVLGLDULHVbbbbbbbbbbbbbbbbbbbbbb

Rs 000 Rs 000
Year of Maturity
2022 -
7RWDO*RYHUQPHQWRI6UL/DQNDGHYHORSPHQWERQGVVXEVLGLDULHV -
O 4XRWHGGHEHQWXUHVKHOGE\VXEVLGLDULHVbbbbbbb

No of Amortised No of Amortised
Rs 000 Rs 000
Commercial Bank of Ceylon PLC

FGDGPVWTGUTGFGGOCDNGQPPF,WN[ 577,800 60,838

FGDGPVWTGUTGFGGOCDNGQPVJ1EVQDGT 135,700 13,861

FGDGPVWTGUTGFGGOCDNGQPPF,WN[ 1,192,800 125,857

&GDGPVWTGUTGFGGOCDNGQPVJ&GEGODGT 5,000,000 507,288
707,844
Commercial Leasing and Finance PLC

FGDGPVWTGUTGFGGOCDNGQPTF5GRVGODGT 2,700,000 277,612
277,612
DFCC Bank PLC

FGDGPVWTGUTGFGGOCDNGQPVJ/CTEJ 1,400,000 153,435

FGDGPVWTGUTGFGGOCDNGQPVJ,WPG 700,000 71,296


FGDGPVWTGUTGFGGOCDNGQPVJ/CTEJ 500,000 54,951

FGDGPVWTGUTGFGGOCDNGQPTF1EVQDGT 2,700,000 274,594


1,198,566
First Capital Holdings PLC

FGDGPVWTGUTGFGGOCDNGQPVJ(GDTWCT[ 2,903,200 316,250
316,250
Hayleys PLC

FGDGPVWTGUTGFGGOCDNGQPUV,WN[ 3,300,000 347,404

FGDGPVWTGUTGFGGOCDNGQPVJ#WIWUV 282,300 29,517
376,921
LB Finance PLC

FGDGPVWTGUTGFGGOGFQPVJ&GEGODGT - -
-

No of Amortised No of Amortised
Rs 000 Rs 000
LOLC Holdings PLC

731,189
1DWLRQDO'HYHORSPHQW%DQN3/&
FGDGPVWTGUTGFGGOCDNGQPVJ&GEGODGT 187,500 21,416
FGDGPVWTGUTGFGGOCDNGQPTF0QXGODGT 5,000,000 506,031

829,938
Nations Trust Bank PLC
FGDGPVWTGUTGFGGOCDNGQPVJ#RTKN 1,550,000 169,133
FGDGPVWTGUTGFGGOCDNGQPTF&GEGODGT 3,000,000 300,947
FGDGPVWTGUTGFGGOCDNGQPTF&GEGODGT 800,000 80,254

550,334
People’s Leasing and Finance PLC
FGDGPVWTGUTGFGGOCDNGQPVJ#RTKN 653,600 71,274
FGDGPVWTGUTGFGGOCDNGQPVJ#WIWUV 1,205,600 124,960
FGDGPVWTGUTGFGGOCDNGQPVJ#WIWUV 1,076,967 79,075

359,453
Sampath Bank PLC
FGDGPVWTGUTGFGGOGFQPUV&GEGODGT - -

519,790
Seylan Bank PLC
FGDGPVWTGUTGFGGOCDNGQPVJ#RTKN 973,100 104,146

362,419
Siyapatha Finance PLC

16,548
Sri Lanka Telecom PLC
FGDGPVWTGUTGFGGOCDNGQPVJ#RTKN 1,443,800 148,112

148,112
Total quoted debentures - Subsidiaries 6,394,976
FINANCIAL REPORTS
P8QTXRWHGGHEHQWXUHVKHOGE\VXEVLGLDULHVbbbbbb
2022 2021
No of $PRUWLVHGb No of $PRUWLVHGb
Rs 000 Rs 000
DFCC Bank PLC

FGDGPVWTGUTGFGGOCDNGQPVJ,WPG 2,460,000 260,976
260,976
Nations Trust Bank PLC

FGDGPVWTGUTGFGGOCDNGQPVJ,WN[ 4,250,000 443,645
443,645
Peoples Bank

FGDGPVWTGUTGFGGOCDNGQPVJ,WN[ 1,500,000 156,129
156,129
Total unquoted Debentures - Subsidiaries 860,750
Q2WKHUORDQVDQGUHFHLYDEOHVKHOGE\VXEVLGLDULHVbbbbbbbbbb

Amortised Amortised
Cost Cost
Rs 000 Rs 000
Other loans and receivables* 773,091

773,091
6JGUGKPXGUVOGPVUJCXGDGGPECVGIQTKUGFCUUVCIGHQT'ZRGEVGF%TGFKV.QUU
'%.EQORWVCVKQP'%.RTQXKUKQPUJCXGDGGPTGEQIPKUGFKP
full for this exposure.
32 (o) Credit and Market risk


),1$1&,$/$66(760($685('$7)$,59$/8(7+528*+27+(5&2035(+(16,9(,1&20(bb
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGJCUDGGPIKXGPKP0QVG
CPFVQVJGƂPCPEKCNUVCVGOGPVU
(KPCPEKCNCUUGVUCTGENCUUKƂGFCU(CKT8CNWGVJTQWIJ1VJGT%QORTGJGPUKXG+PEQOG
(81%+YJGPDQVJQHVJGHQNNQYKPIEQPFKVKQPUCTGOGV
r 6JGKPUVTWOGPVKUJGNFYKVJKPCDWUKPGUUOQFGNVJGQDLGEVKXGQHYJKEJKUCEJKGXGFD[DQVJEQNNGEVKPIEQPVTCEVWCNECUJƃQYUCPFUGNNKPI
ƂPCPEKCNCUUGVU
r 6JGEQPVTCEVWCNVGTOUQHVJGƂPCPEKCNCUUGVIKXGTKUGQPURGEKƂGFFCVGUVQECUJƃQYUVJCVCTG5QNGN[2C[OGPVUQH2TKPEKRCNCPF+PVGTGUV

522+QPVJGRTKPEKRCNCOQWPVQWVUVCPFKPI
'HEWLQVWUXPHQWVPHDVXUHGDW)92&,b
&GDVKPUVTWOGPVUOGCUWTGFCV(81%+CTGUWDUGSWGPVN[OGCUWTGFCVHCKTXCNWGYKVJICKPUCPFNQUUGUCTKUKPIFWGVQEJCPIGUKPHCKTXCNWG
TGEQIPKUGFKP1%++PVGTGUVKPEQOGCPFHQTGKIPGZEJCPIGICKPUCPFNQUUGUQPCEEQWPVQHUWEJKPXGUVOGPVUCTGTGEQIPKUGFKPRTQƂVQT
NQUU9JGTGVJG)TQWRJQNFUOQTGVJCPQPGKPXGUVOGPVKPVJGUCOGUGEWTKV[VJG[CTGFGGOGFVQDGFKURQUGFQHQPCƂTUVsKPƂTUVsQWV
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6JG'ZRGEVGF%TGFKV.QUUHQTFGDVKPUVTWOGPVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGFQPQVTGFWEGVJGECTT[KPI
COQWPVQHVJGUGCUUGVUKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPYJKEJTGOCKPUCVHCKTXCNWG+PUVGCFCPCOQWPVGSWCNVQVJGCNNQYCPEGVJCV
YQWNFCTKUGKHVJGCUUGVUYGTGOGCUWTGFCVCOQTVKUGFEQUVKUTGEQIPKUGFKPQVJGTEQORTGJGPUKXGKPEQOGCUCPCEEWOWNCVGFKORCKTOGPV
COQWPVYKVJCEQTTGURQPFKPIEJCTIGVQKPEQOGUVCVGOGPV
6JGCEEWOWNCVGFNQUUTGEQIPKUGFKPQVJGTEQORTGJGPUKXGKPEQOGKUTGE[ENGFVQVJGRTQƂVWRQPFGTGEQIPKVKQPQHVJGCUUGVU
(TXLW\LQVWUXPHQWVPHDVXUHGDW)92&,b
7RQPKPKVKCNTGEQIPKVKQPVJG)TQWRQEECUKQPCNN[OCMGUCPKTTGXQECDNGGNGEVKQPVQENCUUKH[UQOGQHKVUGSWKV[KPXGUVOGPVUCUGSWKV[
KPUVTWOGPVUOGCUWTGFCV(81%+YJGPVJQUGOGGVVJGFGƂPKVKQPQHGSWKV[WPFGT5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5p(KPCPEKCN
+PUVTWOGPVU2TGUGPVCVKQPooCPFCTGPQVJGNFHQTVTCFKPI5WEJENCUUKƂECVKQPKUFGVGTOKPGFQPCPKPUVTWOGPVD[KPUVTWOGPVDCUKU
6JG(81%+FGUKIPCVKQPYCUOCFGDGECWUGVJGKPXGUVOGPVUCTGGZRGEVGFVQDGJGNFHQTNQPIVGTOUVTCVGIKERWTRQUGUCPFTGIWNCVQT[
PCVWTGQHKPXGUVOGPVU0QPGQHVJGUGKPXGUVOGPVUYGTGFKURQUGFFWTKPIVJG[GCT
)CKPUCPFNQUUGUQPVJGUGGSWKV[KPUVTWOGPVUCTGPGXGTTGE[ENGFVQRTQƂVQTNQUU&KXKFGPFUCTGTGEQIPKUGFKPRTQƂVQTNQUUCUQVJGT
QRGTCVKPIKPEQOGYJGPVJGTKIJVQHVJGRC[OGPVJCUDGGPGUVCDNKUJGFGZEGRVYJGPVJG)TQWRDGPGƂVUHTQOUWEJRTQEGGFUCUC
TGEQXGT[QHRCTVQHVJGEQUVQHVJGKPUVTWOGPVKPYJKEJECUGUWEJICKPUCTGTGEQTFGFKP1%+'SWKV[KPUVTWOGPVUOGCUWTGFCV(81%+CTG
not subject to an impairment assessment.
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
+ORCKTOGPVQHƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
6JG)TQWRCUUGUUGUKORCKTOGPVHQTƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOGKPNKPGYKVJVJGUCOG
principal used for assessment of impairment of loans and receivables.
FINANCIAL REPORTS
33 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (Contd.)
(CKT8CNWG
Rs 000 Rs 000
3WQVGFUJCTGUJGNFD[$CPM=0QVG
D? 2,134,875
7PSWQVGFUJCTGUJGNFD[$CPM=0QVG
E? 27,839
7PSWQVGFWPKVUJGNFD[$CPM=0QVG
F? 543,946
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFUJGNFD[$CPM=0QVG
G? -
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNUJGNFD[$CPM=0QVG
H? -
)QXGTPOGPVQH5TK.CPMCUQXGTGKIPDQPFUJGNFD[$CPM=0QVG
I? -
7RWDO̍QDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH%DQN>1RWHD@ 2,706,660
)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFUJGNFD[UWDUKFKCTKGU=0QVG
J? 3,352,823
7PSWQVGFUJCTGUJGNFD[UWDUKFKCTKGU=0QVG
K? 2,712
7RWDO̍QDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH6XEVLGLDULHV 3,355,535
7RWDO̍QDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH*URXS>1RWHD@ 6,062,195
D $QDO\VLVbbbbbbbbb
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
By collateralisation
2NGFIGFCUEQNNCVGTCN - -
7PGPEWODGTGF 2,706,660 6,062,195
2,706,660 6,062,195
By Currency
5TK.CPMCP4WRGG 2,706,660 6,062,195
7PKVGF5VCVGU&QNNCT - -
2,706,660 6,062,195

33 (b) Quoted shares held by the Bank

Ordinary ,QYHVWPHQW Value Ordinary ,QYHVWPHQW Value
Shares Rs 000 Rs 000 Shares Rs 000 Rs 000
&(%%$CPM 50,224,072 2,178,579 1,607,170

0CVKQPCN&GXGNQROGPV$CPM2.% 10,536,091 1,247,439 337,155
0CVKQPU6TWUV$CPM2.% 4,124,460 411,857 190,550
Total quoted shares - Bank 3,837,875 2,134,875
33 (c) Unquoted shares held by the Bank

%TGFKV+PHQTOCVKQP$WTGCWQH5TK.CPMC 5,300 530 530 530 530

.CPMC%NGCT
2XV.VF 2,214,521 24,559 24,559
.CPMC(KPCPEKCN5GTXKEGU$WTGCW 500,000 5,000 2,750
.CPMC4CVKPI#IGPE[.KOKVGF 1,379,182 16,550 bbb
/CIRGM'ZRQTVU.VF 359,000 14,360 bbb
59+(6 27 5,196 bbb 27
Total unquoted shares - Bank 66,195 27,839
33 (d) Unquoted units in unit trusts held by the Bank

Units ,QYHVWPHQW Value Units ,QYHVWPHQW Value
Rs 000 Rs 000 Rs 000 Rs 000
,$8CPVCIG8CNWG'SWKV[(WPF 19,455,327 400,000 543,946

Total unquoted units in unit trusts
- Bank 400,000 543,946
33 (e) Government of Sri Lanka treasury bonds held by the Bank

Rs 000 Rs 000 Rs 000 Rs 000
Year of Maturity
2022 - -
2023 - -
2024 - -
2025 - -
2028 - -
2032 - -
7RWDOJRYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGV%DQN - -
FINANCIAL REPORTS
33 FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (Contd.)
33 (f) Government of Sri Lanka treasury bills held by the Bank

Rs 000 Rs 000 Rs 000 Rs 000
Year of Maturity
2022 - -
7RWDOJRYHUQPHQWRI6UL/DQNDWUHDVXU\ELOOV%DQN - -
33 (g) Government of Sri Lanka sovereign bonds held by the Bank

Rs 000 Rs 000 Rs 000 Rs 000
Year of Maturity
2022 - -
2023 - -
2024 - -
7RWDOJRYHUQPHQWRI6UL/DQNDVRYHUHLJQERQGV%DQN - -
33 (h) Government of Sri Lanka treasury bonds held by subsidiaries

Rs 000 Rs 000 Rs 000 Rs 000
Year of Maturity
2022 - -
2023 618,050 562,682
2024 861,921 704,793
2025 809,370 656,352
358,387 286,720
2027 1,183,871 735,200
2028 165,247 144,640
2029 150,301 78,272
2030 - -
2031 231,186 184,164
2033 - -
2034 - -
2044 - -
2045 - -
7RWDOJRYHUQPHQWRI6UL/DQNDWUHDVXU\ERQGV6XEVLGLDULHV 4,378,333 3,352,823

33 (i) Unquoted shares held by subsidiaries

%TGFKV+PHQTOCVKQP$WTGCWQH5TK.CPMC 200 290 2,154 100 234

7$(KPCPEG 1,742,326 12,196 558 558
5VCPFCTF%TGFKV.CPMC
(QTOGTN[
%G[NKPEQKPXGUVOGPVCPF4GCNKV[.VF 38,458,474 38,692 -
Total unquoted shares - Subsidiaries 51,179 2,712
33 (j) Movement in impairment during the year - Government of Sri Lanka sovereign bonds
Fair Value
Rs 000 Rs 000
Stage 1
$CNCPEGCUCVUV,CPWCT[ 295,445
+ORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? (295,445)
Balance as at 31st December -
33 (k) Credit and Market risk

O 5HFODVVĽFDWLRQRǏQDQFLDOLQVWUXPHQWV
6JG$CPMTGENCUUKƂGFKVUFGDVUGEWTKVKGURQTVHQNKQOGCUWTGFCV(CKT8CNWG6JTQWIJ1VJGT%QORTGJGPUKXG+PEQOGECVGIQT[VQ#OQTVKUGF%QUV
ECVGIQT[YKVJGHHGEVHTQOUV#RTKNKPCEEQTFCPEGYKVJp5VCVGOGPVQH#NVGTPCVKXG6TGCVOGPV
5Q#6QP4GENCUUKƂECVKQPQH&GDV2QTVHQNKQq
KUUWGFD[%#5TK.CPMC#EEQTFKPIN[)QXGTPOGPVQH5TK.CPMCVTGCUWT[DKNNU)QXGTPOGPVQH5TK.CPMCVTGCUWT[DQPFUCPFKPVGTPCVKQPCN
UQXGTGKIPDQPFKPXGUVOGPVUYJKEJYGTGRTGXKQWUN[ENCUUKƂGFCUƂPCPEKCNCUUGVUOGCUWTGFCV(CKT8CNWG6JTQWIJ1VJGT%QORTGJGPUKXG+PEQOG

(81%+YGTGTGENCUUKƂGFCUƂPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUV6JGTGYCUPQEJCPIGVQVJGGHHGEVKXGKPVGTGUVTCVGWUGFCPFKPVGTGUV
TGXGPWGTGEQIPKUGFKPTGURGEVQHVJGTGENCUUKƂGFCUUGVUHQTVJG[GCTGPFGFUV&GEGODGT
*CFVJGUGKPXGUVOGPVUEQPVKPWGFVQDGECTTKGFCVHCKTXCNWGVJQWIJQVJGTEQORTGJGPUKXGKPEQOGVJGHCKTXCNWGQHUCOGCUCVUV&GEGODGT
YQWNFJCXGCOQWPVGFVQ4U$PCPFYQWNFJCXGTGUWNVGFKPVJGTGEQIPKVKQPQHCHCKTXCNWGNQUUQH4U$P
PGVQHVCZKPQVJGT
EQORTGJGPUKXGKPEQOGUVCVGOGPVFWTKPIVJGRGTKQF
FINANCIAL REPORTS
,19(670(17,1-2,179(1785(bb b
#%%1706+0)21.+%;
,QKPVXGPVWTGKUCV[RGQHLQKPVCTTCPIGOGPVYJGTGD[VJGRCTVKGUVJCVJCXGLQKPVEQPVTQNQHVJGCTTCPIGOGPVJCXGTKIJVUVQVJGPGVCUUGVU
QHVJGLQKPVXGPVWTG,QKPVEQPVTQNKUVJGEQPVTCEVWCNN[CITGGFUJCTKPIQHEQPVTQNQHCPCTTCPIGOGPVYJKEJGZKUVUQPN[YJGPFGEKUKQPUCDQWV
VJGTGNGXCPVCEVKXKVKGUTGSWKTGWPCPKOQWUEQPUGPVQHVJGRCTVKGUUJCTKPIEQPVTQN
6JG)TQWRFGVGTOKPGULQKPVEQPVTQND[VCMKPIKPVQCEEQWPVUKOKNCTEQPUKFGTCVKQPUPGEGUUCT[VQFGVGTOKPGEQPVTQNQXGTUWDUKFKCTKGU
6JG)TQWRoUKPXGUVOGPVKPCLQKPVXGPVWTGKUCEEQWPVGFHQTWUKPIVJGGSWKV[OGVJQFCPFKUTGEQIPKUGFKPKVKCNN[CVEQUV6JGECTT[KPI
COQWPVQHVJGKPXGUVOGPVKUCFLWUVGFVQTGEQIPKUGEJCPIGUKPVJG)TQWRoUUJCTGQHPGVCUUGVUQHVJGLQKPVXGPVWTGUKPEGVJGCESWKUKVKQP
FCVG)QQFYKNNTGNCVKPIVQCLQKPVXGPVWTGKUKPENWFGFKPVJGECTT[KPICOQWPVQHVJGKPXGUVOGPVCPFKUPQVVGUVGFHQTKORCKTOGPV
individually.
6JGKPEQOGUVCVGOGPVTGƃGEVU)TQWRoUUJCTGQHVJGTGUWNVUQHQRGTCVKQPUQHVJGLQKPVXGPVWTG#P[EJCPIGKPpQVJGTEQORTGJGPUKXG
KPEQOGqQHVJGLQKPVXGPVWTGKURTGUGPVGFCURCTVQHVJG)TQWRoUpQVJGTEQORTGJGPUKXGKPEQOGq+PCFFKVKQPYJGPVJGTGJCUDGGPC
EJCPIGTGEQIPKUGFFKTGEVN[KPVJGGSWKV[QHVJGLQKPVXGPVWTGVJG)TQWRTGEQIPKUGUKVUUJCTGQHCP[UWEJEJCPIGYJGPCRRNKECDNGKPVJG
UVCVGOGPVQHEJCPIGUKPGSWKV[7PTGCNKUGFICKPUCPFNQUUGUTGUWNVKPIHTQOVTCPUCEVKQPUDGVYGGPVJG)TQWRCPFVJGLQKPVXGPVWTGCTG
eliminated to the extent of the interest in the joint venture.
6JGCIITGICVGQHVJG)TQWRoUUJCTGQHRTQƂVQTNQUUQHCLQKPVXGPVWTGKUUJQYPQPVJGHCEGQHVJGKPEQOGUVCVGOGPVQWVUKFGQRGTCVKPI
RTQƂV
6JGƂPCPEKCNUVCVGOGPVUQHVJGLQKPVXGPVWTGCTGRTGRCTGFHQTVJGUCOGTGRQTVKPIRGTKQFCUVJG)TQWR9JGPPGEGUUCT[CFLWUVOGPVUCTG
OCFGVQDTKPIVJGCEEQWPVKPIRQNKEKGUKPNKPGYKVJVJQUGQHVJG)TQWR
#VGCEJTGRQTVKPIFCVGVJG)TQWRFGVGTOKPGUYJGVJGTVJGTGKUCPQDLGEVKXGGXKFGPEGVJCVVJGKPXGUVOGPVKPLQKPVXGPVWTGKUKORCKTGF+H
VJGTGKUUWEJGXKFGPEGVJG)TQWRECNEWNCVGUVJGCOQWPVQHKORCKTOGPVCUVJGFKHHGTGPEGDGVYGGPVJGTGEQXGTCDNGCOQWPVQHVJGLQKPV
XGPVWTGCPFKVUECTT[KPIXCNWGCPFVJGPTGEQIPKUGUVJGNQUUKPKORCKTOGPVHQTNQCPUCPFQVJGTNQUUGUKPVJGKPEQOGUVCVGOGPV
6JG)TQWRFKUEQPVKPWGUVJGWUGQHGSWKV[OGVJQFHTQOVJGFCVGVJCVKVEGCUGUVQJCXGLQKPVEQPVTQNQXGTVJGLQKPVXGPVWTGCPFCEEQWPVU
HQTVJGKPXGUVOGPVKPCEEQTFCPEGYKVJVJG)TQWRoUCEEQWPVKPIRQNKE[HQTƂPCPEKCNKPUVTWOGPVU#P[FKHHGTGPEGDGVYGGPVJGECTT[KPI
COQWPVQHVJGLQKPVXGPVWTGWRQPNQUUQHLQKPVEQPVTQNCPFVJGHCKTXCNWGQHVJGTGVCKPGFKPXGUVOGPVCPFRTQEGGFUHTQOFKURQUCNKU
TGEQIPKUGFKPKPEQOGUVCVGOGPV6JG$CPMoUKPXGUVOGPVKPLQKPVXGPVWTGKUECTTKGFCVEQUV
34 (a) Investment in unquoted joint venture - Bank

% Cost of Fair Value/ % Cost of Fair Value/
Holding ,QYHVWPHQW 'LUHFWRUVʹb Holding ,QYHVWPHQW 'LUHFWRUVʹb
Value YDOXDWLRQ Value YDOXDWLRQ
Rs 000 Rs 000 Rs 000 Rs 000
#EWKV[2CTVPGTU
2XV.VF 50 755,000 3,669,272 50
755,000
$CPMFKFPQVTGEGKXGCP[FKXKFGPFKPEQOGHTQO#EWKV[2CTVPGTU
2XV.VFHQTVJG[GCTGPFGFUV&GEGODGT
4U0KN/P

Eb ,QYHVWPHQWLQ8QTXRWHG-RLQW9HQWXUH*URXSbbbbbbbbbbbb
2022 2021
Rs 000 Rs 000
+PXGUVOGPVKPLQKPVXGPVWTG
CVEQUVCUCVUV,CPWCT[ 755,000
)TQWRoUUJCTGQHLQKPVXGPVWTGRTQƂVCUCVUV,CPWCT[ 2,234,558
*URXSʹVVKDUHRIQHWDVVHWVRIMRLQWYHQWXUHFRPSDQ\DVDWVW-DQXDU\ 2,989,558
5JCTGQHWPTGCNKUGFRTQƂVQPFKURQUCNQHKPXGUVOGPVU (112,138)

*URXSʹVVKDUHRIQHWDVVHWVRIMRLQWYHQWXUHFRPSDQ\DVDWVW-DQXDU\QHWRIXQUHDOLVHGSUR̍W 2,877,420
PGVQHKPEQOGVCZ=0QVG? 331,973
5JCTGQHQVJGTEQORTGJGPUKXGKPEQOGQHGSWKV[CEEQWPVGFLQKPVXGPVWTG 440,961
&KXKFGPFTGEGKXGFFWTKPIVJG[GCT -
*URXSʹVVKDUHRIQHWDVVHWVRIMRLQWYHQWXUHFRPSDQ\DVDWVW'HFHPEHU 3,650,354
F 6XPPDULVHG)LQDQFLDO3RVLWLRQRI-RLQW9HQWXUH$FXLW\3DUWQHUV3YW/WGDQGLWV6XEVLGLDULHVbbbbbbbbbbb

Rs 000 Rs 000
%CUJCPFECUJGSWKXCNGPVU 835,375

Trade and other receivables 2,598,098
Other current assets 10,807,208
0QPEWTTGPVCUUGVU 14,351,970
Trade and other payables (605,712)

Other current liabilities (13,109,095)

0QPEWTTGPVNKCDKNKVKGU (3,003,876)

0QPEQPVTQNNKPIKPVGTGUV (4,348,985)

5JCTGJQNFGT UGSWKV[QH,QKPV8GPVWTG 7,524,983
)TQWR UECTT[KPICOQWPVQHVJGKPXGUVOGPV 3,762,492
5JCTGQHWPTGCNKUGFRTQƂVQPFKURQUCNQHKPXGUVOGPVU (112,138)

*URXS
VFDUU\LQJDPRXQWRIWKHLQYHVWPHQW1HW 3,650,354
FINANCIAL REPORTS
34 INVESTMENT IN JOINT VENTURE (Contd.)

G 6XPPDULVHG6WDWHPHQWRI3UŘWRU/RVVRI-RLQW9HQWXUH$FXLW\3DUWQHUV3YW/WGDQGLWV6XEVLGLDULHVbbbbbbbbbbb

Rs 000 Rs 000
Interest income 2,410,130

Other Income 173,120
Revenue 2,583,250
Depreciation and amortisation expenses (130,875)

Administration and distribution expenses (473,586)

Finance cost (802,778)

2TQƂVHTQOQRGTCVKQPU 1,176,011
8#6QPƂPCPEKCNUGTXKEGU (18,418)
2TQƂVDGHQTGVCZ 1,157,593
Income tax expenses (344,665)

2TQƂVHQTVJG[GCT 812,928
Other comprehensive income 1,961,384
Total comprehensive income for the year 2,774,312
0QPEQPVTQNNKPIKPVGTGUV (1,228,448)

7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU 1,545,864
*URXS
VVKDUHRI
2TQƂVQTNQUUHQTVJG[GCT 331,973
Other comprehensive income for the year 440,961
Comprehensive income for the year 772,934
6JGTGCTGPQTGUVTKEVKQPUQPVJGCDKNKV[QHVJGLQKPVXGPVWTGEQORCP[VQVTCPUHGTHWPFUVQVJGKPXGUVQTKPVJGHQTOQHECUJFKXKFGPFUQT
repayment of loans or advances.
6JG$CPMJCUPGKVJGTEQPVKPIGPVNKCDKNKVKGUPQTECRKVCNCPFQVJGTEQOOKVOGPVUVQYCTFUKVULQKPVXGPVWTGEQORCP[

,19(670(17,168%6,',$5,(6bbbb b
#%%1706+0)21.+%;
5WDUKFKCTKGUCTGGPVKVKGUVJCVCTGEQPVTQNNGFD[VJG)TQWR%QPVTQNKUCEJKGXGFYJGPVJG)TQWRKUGZRQUGFQTJCUTKIJVUVQXCTKCDNG
TGVWTPUHTQOKVUKPXQNXGOGPVYKVJVJGKPXGUVGGCPFJCUVJGCDKNKV[VQCHHGEVVJGTGVWTPUQHVJQUGKPXGUVGGUVJTQWIJKVURQYGTQXGTVJG
KPXGUVGG5RGEKƂECNN[VJG)TQWREQPVTQNUCPKPXGUVGGKHCPFQPN[KHVJG)TQWRJCU
• power over the investee
r GZRQUWTGQTTKIJVUVQXCTKCDNGTGVWTPUHTQOKVUKPXQNXGOGPVYKVJVJGKPXGUVGG
• the ability to use its power over the investee to affect its returns
)GPGTCNN[VJGTGKUCRTGUWORVKQPVJCVCOCLQTKV[QHXQVKPITKIJVUTGUWNVUKPEQPVTQN6QUWRRQTVVJKURTGUWORVKQPYJGPVJG)TQWRJCUNGUU
VJCPCOCLQTKV[QHVJGXQVKPIQTUKOKNCTTKIJVUQHCPKPXGUVGGVJG)TQWREQPUKFGTUCNNTGNGXCPVHCEVUCPFEKTEWOUVCPEGUKPCUUGUUKPIYJGVJGT
KVJCURQYGTQXGTCPKPXGUVGGKPENWFKPI
r VJGEQPVTCEVWCNCTTCPIGOGPVYKVJQVJGTXQVGJQNFGTUQHVJGKPXGUVGG
r TKIJVUCTKUKPIHTQOQVJGTEQPVTCEVWCNCTTCPIGOGPVU
r VJG)TQWRoUXQVKPITKIJVUCPFRQVGPVKCNXQVKPITKIJVU
6JG)TQWRTGCUUGUUGUYJGVJGTQTPQVKVEQPVTQNUCPKPXGUVGGKHHCEVUCPFEKTEWOUVCPEGUKPFKECVGVJCVVJGTGCTGEJCPIGUVQQPGQTOQTGQH
the above.
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VJGUCKFUWDUKFKCT[CTGKPENWFGFKPVJGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUHTQOVJGFCVGVJG)TQWRICKPUEQPVTQNWPVKNVJGFCVGVJG)TQWR
ceases to control the subsidiary.
9JGPPGEGUUCT[CFLWUVOGPVUCTGOCFGVQVJGƂPCPEKCNUVCVGOGPVUQHUWDUKFKCTKGUVQDTKPIVJGKTCEEQWPVKPIRQNKEKGUKPNKPGYKVJVJG
)TQWRoUCEEQWPVKPIRQNKEKGU#NNKPVTCITQWRCUUGVUCPFNKCDKNKVKGUGSWKV[KPEQOGGZRGPUGUCPFECUJƃQYUTGNCVKPIVQVTCPUCEVKQPU
between members of Group are eliminated in full on consolidation.
0QPEQPVTQNNKPIKPVGTGUVUTGRTGUGPVVJGRQTVKQPQHRTQƂVQTNQUUCPFPGVCUUGVUQHVJGUWDUKFKCTKGUPQVQYPGFFKTGEVN[QTKPFKTGEVN[D[
VJG$CPM6JGPQPEQPVTQNNKPIKPVGTGUVKURTGUGPVGFKPVJGEQPUQNKFCVGFUVCVGOGPVQHƂPCPEKCNRQUKVKQPYKVJKPGSWKV[UGRCTCVGN[HTQOVJG
GSWKV[CVVTKDWVCDNGVQVJGGSWKV[JQNFGTUQHVJG$CPM0QPEQPVTQNNKPIKPVGTGUVUKPVJGRTQƂVQTNQUUQHVJG)TQWRKUFKUENQUGFUGRCTCVGN[KP
the consolidated income statement.
#EJCPIGKPVJGQYPGTUJKRKPVGTGUVQHCUWDUKFKCT[YKVJQWVCNQUUQHEQPVTQNKUCEEQWPVGFHQTCUCPGSWKV[VTCPUCEVKQP7RQPVJGNQUUQH
EQPVTQNVJG)TQWRFGTGEQIPKUGUVJGCUUGVU
KPENWFKPIIQQFYKNNCPFNKCDKNKVKGUQHVJGUWDUKFKCT[CP[PQPEQPVTQNNKPIKPVGTGUVUCPFVJG
QVJGTEQORQPGPVUQHGSWKV[TGNCVGFVQVJGUWDUKFKCT[#P[UWTRNWUQTFGƂEKVCTKUKPIQPVJGNQUUQHEQPVTQNKUTGEQIPKUGFKPVJGUVCVGOGPV
QHEJCPIGUKPGSWKV[+HVJG)TQWRTGVCKPUCP[KPVGTGUVKPVJGRTGXKQWUUWDUKFKCT[VJGPUWEJKPVGTGUVKUOGCUWTGFCVHCKTXCNWGCVVJGFCVG
VJCVEQPVTQNKUNQUV5WDUGSWGPVN[KVKUCEEQWPVGFHQTCUCPGSWKV[CEEQWPVGFKPXGUVGGQTKPCEEQTFCPEGYKVJVJG)TQWRoUCEEQWPVKPIRQNKE[
HQTƂPCPEKCNKPUVTWOGPVUFGRGPFKPIQPVJGNGXGNQHKPƃWGPEGTGVCKPGF
6JGTGCTGPQUKIPKƂECPVTGUVTKEVKQPUQPVJGCDKNKV[QHVJGUWDUKFKCTKGUVQVTCPUHGTHWPFUVQVJG$CPMKPVJGHQTOQHECUJFKXKFGPFUQT
TGRC[OGPVQHNQCPUCPFCFXCPEGU#NNUWDUKFKCTKGUQHVJG$CPMCUCVVJGTGRQTVKPIFCVGJCXGDGGPKPEQTRQTCVGFKP5TK.CPMC
6JG$CPMoUKPXGUVOGPVUKPUWDUKFKCTKGUCTGECTTKGFCVEQUV
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
,PSDLUPHQWRI,QYHVWPHQWVLQ6XEVLGLDULHV
6JG$CPMHQNNQYUVJGIWKFCPEGQH5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5p+ORCKTOGPVQH#UUGVUqKPFGVGTOKPKPIYJGVJGTCP
KPXGUVOGPVKPUWDUKFKCT[KUKORCKTGF6JKUFGVGTOKPCVKQPTGSWKTGUUKIPKƂECPVLWFIGOGPV6JG$CPMGXCNWCVGUCOQPIQVJGTHCEVQTUVJG
FWTCVKQPCPFGZVGPVVQYJKEJVJGHCKTXCNWGQHCUWDUKFKCT[KUNGUUVJCPKVUEQUVCPFVJGƂPCPEKCNJGCNVJQHVJGPGCTVGTODWUKPGUUQWVNQQMQH
VJGKPXGUVOGPVQTVJGƂPCPEKCNCUUGVKPENWFKPIHCEVQTUUWEJCUKPFWUVT[CPFUGEVQTRGTHQTOCPEGEJCPIGUKPVGEJPQNQI[CPFQRGTCVKQPCN
CPFƂPCPEKPIECUJƃQYU
FINANCIAL REPORTS
,19(670(17,168%6,',$5,(6bContd.)

35 (a) Investment in Subsidiaries - Quoted

YDOXDWLRQ YDOXDWLRQ
Rs 000 Rs 000 Rs 000 Rs 000
*0$#UUWTCPEG2.%

QTFKPCT[UJCTGU 60.00 384,285 3,860,099
*0$(KPCPEG2.%=0QVG
DK?

QTFKPCT[UJCTGU 42.16 660,000 3,117,088
7RWDO,QYHVWPHQWVLQTXRWHGVXEVLGLDULHV 1,044,285
Eb,QYHVWPHQWLQ6XEVLGLDU\8QTXRWHG

YDOXDWLRQ YDOXDWLRQ
Rs 000 Rs 000 Rs 000 Rs 000
5KVJOC&GXGNQROGPV
2XV.VF

QTFKPCT[UJCTGU 100 1,973,000 8,724,357 100
7RWDO,QYHVWPHQWVLQTXRWHGVXEVLGLDULHV 1,973,000
Total for the Bank [35 (a) and 35 (b)] 3,017,285
35 (b) i HNB Finance PLC

$CPMJQNFUCUVCMGQHKPVJGXQVKPITKIJVUQH*0$(KPCPEG2.%#EEQTFKPIN[VJGUCKFKPXGUVOGPVKUCEEQWPVGFHQTCUCPKPXGUVOGPVKP
UWDUKFKCT[5KPEGVJG$CPMFQGUPQVJQNFPQPXQVKPIUJCTGUQH*0$(KPCPEG2.%$CPMoUJQNFKPIKPVJGUCKFEQORCP[KU
Fb6XEVLGLDU\+HOGWKURXJK+1%$VVXUDQFH3/&bb

% Cost of % Cost of
Holding ,QYHVWPHQW Holding ,QYHVWPHQW
Rs 000 Rs 000
*0$)GPGTCN+PUWTCPEG2.%

QTFKPCT[UJCTGU 100 1,150,000 100
1,150,000

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% Cost of Fair % Cost of Fair
Holding ,QYHVWPHQW Value Holding ,QYHVWPHQW Value
Rs 000 Rs 000 Rs 000 Rs 000
2TKOG(KPCPEG2.%

QTFKPCT[UJCTGU - - - 87.27 2,122,605 2,122,605
- - 2,122,605 2,122,605
*0$(KPCPEG2.%UWDUKFKCT[QHVJG$CPMCESWKTGFQHVJGQTFKPCT[UJCTGUQH2TKOG(KPCPEG2.%QPTF&GEGODGTD[YC[QHC
ETQUUKPIVTCPUCEVKQPQPVJG%QNQODQ5VQEM'ZEJCPIGEQPUGSWGPVVJGTGVQCOCPFCVQT[QHHGTCVCRTKEGQH.-4RGTUJCTGYCUOCFGD[
VJGEQORCP[VQVJGTGOCKPKPIUJCTGJQNFGTUQH2TKOG(KPCPEG2.%KPVGTOUQH4WNG

CQHVJG%QORCP[6CMGQXGTUCPF/GTIGTUEQFG
CUCOGPFGFKPVQCESWKTGVJGQTFKPCT[UJCTGUJGNFD[UWEJUJCTGJQNFGTUKP2TKOG(KPCPEG2.%6JGCDQXGPQVGFOCPFCVQT[QHHGTYCU
ENQUGFQPVJ(GDTWCT[CPFVJGJQNFKPIQH*0$(KPCPEG2.%QP2TKOG(KPCPEG2.%COQWPVGFVQCUCVVJCVFCVG
9JGPRTGRCTKPIVJGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVUHQTVJGGHHGEVKXGFCVGQHCESWKUKVKQPQH2TKOG(KPCPEG2.%YCUEQPUKFGTGFCUUV
December 2021.
#OCNICOCVKQPQH*0$(KPCPEG2.%CPF2TKOG(KPCPEG2.%WPFGT5GEVKQPQHVJG%QORCPKGU#EV0QQHYCUFWN[EQORNGVGFFWTKPI
VJG[GCTCPFVJGGHHGEVKXGFCVGQHVJGCOCNICOCVKQPYCUVJ/C[#EEQTFKPIN[VJGCHQTGOGPVKQPGFCOCNICOCVKPIEQORCPKGU
EQPVKPWGCU*0$(KPCPEG2.%YKVJGHHGEVHTQOUWEJFCVG
1PCOCNICOCVKQP*0$(KPCPEG2.%RCKF4U/PCUVJGRWTEJCUGEQPUKFGTCVKQPHQTVJGGSWKV[EQORQPGPVQHPQPEQPVTQNNKPIKPVGTGUVKP
2TKOG(KPCPEG2.%COQWPVKPIVQ4U/PD[VJGCOCNICOCVKQPFCVG#EEQTFKPIN[4U/PYCUTGEQIPK\GFCUVJGOGTIGTTGUGTXGQP
VJGCOCNICOCVKQPFCVGCPFUCOGYCUCEEQWPVGFVJTQWIJTGVCKPGFGCTPKPIUUKPEGVJGCOQWPVEQPEGTPGFKUPQVOCVGTKCNVQVJGEQPUQNKFCVGF
ƂPCPEKCNUVCVGOGPVU)QQFYKNNCOQWPVKPIVQ4U/PTGEQIPKUGFQPCOCNICOCVKQPYKNNDGCOQTVKUGFQXGTCyear period.
35 (e) Summarised Financial Position of Subsidiaries
HNB Assurance PLC 6LWKPD'HYHORSPHQW3YW/WGb HNB Finance PLC

As at 31st December 2022 2021 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Assets 41,698,294 10,970,479 52,961,257
.KCDKNKVKGU 33,306,924 2,505,891 48,103,075
'SWKV[ 8,391,370 8,464,588 4,858,182
Ib 6XPPDULVHG)LQDQFLDO3HUIRUPDQFHRI6XEVLGLDULHVbbb

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Revenue 18,247,007 1,257,486 11,097,674
2TQƂVCHVGTVCZ 1,810,134 510,136 (526,263)
Total comprehensive income 2,217,832 124,548 (366,083)

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
%CUJƃQYUHTQOQRGTCVKPICEVKXKVKGU 2,156,635 34,081 3,077,563
%CUJƃQYUHTQO+PXGUVKPICEVKXKVKGU (715,210)
991,563
(3,201,534)

%CUJƃQYUHTQOƂPCPEKPICEVKXKVKGU (642,654)
- (359,941)

$VVHVVPHQWRI,PSDLUPHQWb
6JG$QCTFQH&KTGEVQTUJCUCUUGUUGFVJGRQVGPVKCNKORCKTOGPVNQUUQPKPXGUVOGPVUKPUWDUKFKCTKGUCUCVUV&GEGODGT$CUGFQPVJG
CUUGUUOGPVPQKORCKTOGPVRTQXKUKQPKUTGSWKTGFVQDGOCFGKPVJGƂPCPEKCNUVCVGOGPVUCUCVVJGTGRQTVKPIFCVG
FINANCIAL REPORTS
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ƃQYVQVJG)TQWRCPFEQUVQHVJGKPXGUVOGPVRTQRGTV[ECPDGTGNKCDN[OGCUWTGF
9JGPCRQTVKQPQHVJGRTQRGTV[KUJGNFVQGCTPTGPVCNUQTHQTECRKVCNCRRTGEKCVKQPCPFCPQVJGTRQTVKQPKUJGNFHQTWUGKPVJGRTQFWEVKQP
QTUWRRN[QHIQQFUQTUGTXKEGUQTHQTCFOKPKUVTCVKXGRWTRQUGUVJG)TQWRCEEQWPVUHQTVJGRQTVKQPUUGRCTCVGN[KHVJGUGRQTVKQPUEQWNFDG
UQNFUGRCTCVGN[
QTNGCUGFQWVUGRCTCVGN[WPFGTCƂPCPEGNGCUG+HVJGRQTVKQPUEQWNFPQVDGUQNFUGRCTCVGN[VJGRTQRGTV[KUVTGCVGFCU
KPXGUVOGPVRTQRGTV[QPN[KHCPKPUKIPKƂECPVRQTVKQPKUJGNFHQTWUGKPVJGRTQFWEVKQPQTUWRRN[QHIQQFUQTUGTXKEGUQTHQTCFOKPKUVTCVKXG
purposes.
9JGTGVJG)TQWRRTQXKFGUCPEKNNCT[UGTXKEGUVQVJGQEEWRCPVUQHCRTQRGTV[KVJQNFUVJG)TQWRVTGCVUUWEJCRTQRGTV[CUKPXGUVOGPV
RTQRGTV[KHVJGUGTXKEGUCTGKPUKIPKƂECPVVQVJGCTTCPIGOGPVCUCYJQNG
Measurement
An investment property is measured initially at its cost. The cost of a purchased investment property comprises of its purchase price and
CP[FKTGEVN[CVVTKDWVCDNGGZRGPFKVWTG6JGEQUVQHCUGNHEQPUVTWEVGFKPXGUVOGPVRTQRGTV[KUKVUEQUVCVVJGFCVGYJGPVJGEQPUVTWEVKQPQT
development is completed.
6JG)TQWRCRRNKGUVJGEQUVOQFGNHQTKPXGUVOGPVRTQRGTVKGUKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp+PXGUVOGPV
2TQRGTV[q#EEQTFKPIN[NCPFENCUUKƂGFCUKPXGUVOGPVRTQRGTVKGUCTGUVCVGFCVEQUVNGUUCP[CEEWOWNCVGFKORCKTOGPVNQUUGUCPFDWKNFKPIU
ENCUUKƂGFCUKPXGUVOGPVRTQRGTVKGUCTGUVCVGFCVEQUVNGUUCP[CEEWOWNCVGFFGRTGEKCVKQPCPFCP[CEEWOWNCVGFKORCKTOGPVNQUU
6JG)TQWRQDVCKPUVJGUGTXKEGUQHKPFGRGPFGPVXCNWGTUYJQCTGPQVEQPPGEVGFYKVJVJG$CPMKPQTFGTVQFGVGTOKPGVJGHCKTXCNWGQHKVU
KPXGUVOGPVRTQRGTVKGUCPPWCNN[HQTFKUENQUWTGRWTRQUGUCPFUWEJHCKTXCNWGUJCXGDGGPFKUENQUGFCUTGSWKTGFD[5TK.CPMC#EEQWPVKPI
5VCPFCTF.-#5QPp+PXGUVOGPV2TQRGTV[q
Depreciation
&GRTGEKCVKQPKURTQXKFGFQPCUVTCKIJVNKPGDCUKUQXGTVJGGUVKOCVGFNKHGQHVJGENCUUQHCUUGVHTQOVJGFCVGQHRWTEJCUGWRVQVJGFCVGQH
disposal. .
Classes of Assets RGTCPPWO
(TGGJQNFDWKNFKPIU
4GHGT0QVG
C 2.50
5KVJOC&GXGNQROGPV
2XV.VF
(TGGJQNFDWKNFKPIU
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Others 2.50
2NCPV/CEJKPGT[CPFGSWKROGPVKPVGITCNVQHTGGJQNF 20.00
DWKNFKPIUTGHGTTGFVQCDQXG
De-recognition
+PXGUVOGPVRTQRGTVKGUCTGFGTGEQIPKUGFYJGPFKURQUGFQHQTRGTOCPGPVN[YKVJFTCYPHTQOWUGUKPEGPQHWVWTGGEQPQOKEDGPGƂVUCTG
GZRGEVGF)CKPUQTNQUUGUCTKUKPIHTQOFGTGEQIPKVKQPQHCPKPXGUVOGPVRTQRGTV[CTGOGCUWTGFCUVJGFKHHGTGPEGDGVYGGPVJGPGVFKURQUCN
RTQEGGFUCPFVJGECTT[KPICOQWPVQHVJGCUUGVCPFCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPV
6TCPUHGTUCTGOCFGVQCPFHTQOKPXGUVOGPVRTQRGTVKGUQPN[YJGPVJGTGKUCEJCPIGKPWUG
,QYHVWPHQW3URSHUW\/HDVHGZLWKLQWKH*URXSbbb
#P[RTQRGTV[NGCUGFQWVVQVJGRCTGPVQTCUWDUKFKCT[KPHWNNQTYJGTGVJGRCTGPVQTUWDUKFKCT[QEEWRKGUCUKIPKƂECPVRQTVKQPQHUWEJC
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QTKPVJGRTQEGUUQHRTQXKFKPIUGTXKEGUQTHQTCFOKPKUVTCVKXGRWTRQUGUCPFYJKEJFQPQVFKTGEVN[IGPGTCVGECUJƃQYUCUCUVCPFCNQPG
CUUGVCTGCEEQWPVGFHQTCURTQRGTV[RNCPVCPFGSWKROGPV6JG)TQWRCUUGUUGUQPCPCPPWCNDCUKUVJGCEEQWPVKPIENCUUKƂECVKQPQHKVU
RTQRGTVKGUVCMKPIKPVQEQPUKFGTCVKQPVJGEWTTGPVWUGQHUWEJRTQRGTVKGU
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6JG)TQWRTGXKGYUVJGTGUKFWCNXCNWGUWUGHWNNKXGUCPFOGVJQFUQHFGRTGEKCVKQPQHKPXGUVOGPVRTQRGTVKGUCVGCEJTGRQTVKPIFCVG
/CPCIGOGPVGZGTEKUGULWFIGOGPVKPVJGGUVKOCVKQPQHVJGUGXCNWGUTCVGUOGVJQFUCPFJGPEGVJQUGCTGUWDLGEVVQWPEGTVCKPV[
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Cost
6TCPUHGTTGFVQRTQRGTV[RNCPVCPFGSWKROGPV - -

Additions and improvements - - 343
Balance as at 31st December 507,684 1,209,059
Accumulated depreciation
%JCTIGHQTVJG[GCT=0QVG
D? 5,335 29,305
&DUU\LQJYDOXHDVDWVW'HFHPEHU 464,439 935,549
FINANCIAL REPORTS
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Cost/Carrying Amount Fair Value Fair Value

As at 31st December 2022 As at 31st December 2022 As at 31st
Building Land Land Building Total Land Building Total December
sq.ft Perches (Cost) (Net Book 2021
Value) Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
+PFGRGPFGPEG#XGPWG
%QNQODQ=0QVG
DK? 10,645 105.10 37,081 37,385 74,466 - - 1,045,000
6$,C[CJ/CYCVJC%QNQODQ
=0QVG
DKK? Land 112.96 126,480 - 126,480 2,541,600 - 2,541,600
#,CPCFJKRCVJK
/CYCVJC%QNQODQ=0QVG
DKK? Land 26.62 34,889 - 34,889 732,050 - 732,050
-CPF[4QCF-GICNNG=0QVG
DKK? Land 61.70 83,400 - 83,400 204,088 - 204,088
*KIJ.GXGN4QCF0WIGIQFC 11,096 16.50 82,500 62,704 145,204 193,875 102,325 296,200
364,350 100,089 464,439 3,671,613 102,325 4,818,938
E 9DOXDWLRQRI,QYHVWPHQW3URSHUWLHV*URXSbb
Cost/Carrying Amount Fair Value Fair Value

As at 31st December 2022 As at 31st December 2022 As at 31st
Building Land Land Building Total Land Building Total December
sq.ft Perches (Cost) (Net Book 2021
Value) Total
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Through the Bank

+PFGRGPFGPEG#XGPWG
%QNQODQ=0QVG
DK? 10,645 105.10 37,081 37,385 74,466 - - 1,045,000
*KIJNGXGN4QCF0WIGIQFC 11,096 16.50 82,500 62,704 145,204 193,875 102,325 296,200
7KURXJKWKH6XEVLGLDU\b6LWKPD
'HYHORSPHQW3YW/WG
#,CPCFJKRCVJK
/CYCVJC%QNQODQ=0QVG
DKK? 41,688 - - 54,846 54,846 - 468,900 468,900
-CPF[4QCF-GICNNG=0QVG
DKK? 16,000 - - 97,478 97,478 - 197,111 197,111
7KURXJKWKH6XEVLGLDU\b+1%)LQDQFH
PLC [Note 36 (b) iii]
5VCPNG[6JKNGMCTCVPG
/CYCVJC2CIQFC0WIGIQFC 21,930 39.60 151,063 289,152 440,215 352,800 547,200 900,000
8KJCTC4QCF4CPMGYCVVG/CVCNG - 15.00 9,000 - 9,000 15,000 - 15,000
1NF2QNKEG5VCVKQP
4QCF-CJCVJWFWYC2QNICUQYKVC 3,967 182.59 49,008 51,332 100,340 110,695 81,305 192,000
#FCORQFCKXC[CN
#FCORQFCKOCNCKMCFW6TKPEQOCNGG - 724.00 14,000 - 14,000 29,000 - 29,000
342,652 592,897 935,549 701,370 1,396,841 3,143,211

36 (b) i Valued as a condominium property
36 (b) ii .CPFUUKVWCVGFCV0Q6$,C[CJ/Y%QNQODQQPYJKEJ*0$6QYGTUKUDWKNV0Q#CPF,CPCFJKRCVJK/CYCVJC%QNQODQ
CPF0Q-CPF[4QCF-GICNNGCTGNGCUGFQWVVQ5KVJOC&GXGNQROGPV
2XV.VFD[VJG$CPMCPFVJG$CPMTGEGKXGUITQWPFTGPV
CPFUWDUVCPVKCNRQTVKQPQHVJGDWKNFKPIKUQEEWRKGFD[VJGVJKTFRCTV[VGPCPVU#EEQTFKPIN[VJGUGNCPFUJCXGDGGPENCUUKƂGFCUKPXGUVOGPV
RTQRGTVKGUKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPQHVJG$CPM
36 (b) iii 6JGUGRTQRGTVKGUCTGJGNFD[VJGUWDUKFKCT[QHVJG$CPM*0$(KPCPEG2.%CPFXCNWCVKQPUQHVJGUCKFRTQRGTVKGUYGTGECTTKGFQWVD[/GUUGToU

459KLGUWTK[C&+8(+8
5TK.CPMCCRTQHGUUKQPCNKPFGRGPFGPVXCNWGT#NNVJGUGRTQRGTVKGUQVJGTVJCPVJGRTQRGTV[UKVWCVGFKP6TKPEQOCNGG
JCXGDGGPOQTVICIGFVQ5G[NCP$CPM2.%D[*0$(KPCPEG2.%HQTVJGƂPCPEKCNHCEKNKVKGUQDVCKPGFD[VJGEQORCP[6JGCIITGICVGOQTVICIG
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DKKKVQVJGƂPCPEKCN
statements.
36 (b) iv .CPFUUKVWCVGFCV0Q5GTXKEG4QCF2WVVCNCOCPF0Q#DC[C2NCEGVJ.CPG#PWTCFJCRWTCJGNFD[*0$(KPCPEG2.%JCXGDGGP
VTCPUHGTTGFHTQO+PXGUVOGPVRTQRGTV[VQ2TQRGTV[2NCPVCPF'SWKROGPVFWTKPIVJG[GCTGPFGFUV&GEGODGTUKPEGVJGDWKNFKPI
EQPUVTWEVGFKPVJGUCKFNQECVKQPCTGDGKPIWUGFD[%QORCP[
36 (c) Valuation details of Investment Properties

+PFGVGTOKPKPIHCKTXCNWGVJGEWTTGPVEQPFKVKQPQHVJGRTQRGTVKGUHWVWTGWUCDKNKV[CPFCUUQEKCVGFFGXGNQROGPVTGSWKTGOGPVUJCXGDGGP
EQPUKFGTGF(WTVJGTVJGXCNWGTUJCXGOCFGTGHGTGPEGVQOCTMGVGXKFGPEGQHVTCPUCEVKQPRTKEGUHQTUKOKNCTRTQRGTVKGUYKVJCRRTQRTKCVG
CFLWUVOGPVUHQTUK\GCPFNQECVKQPU
36 (c) i Bank
Property Name of professional Valuer /GVJQFQHXCNWCVKQPCPFUKIPKƂECPV 4CPIGQHGUVKOCVGUHQT

unobservable inputs unobservable inputs
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;GCTUUKPEGRWTEJCUG 22.22
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6$,C[CJ/CYCVJC /T)9)#DG[IWPCYCTFGPG /CTMGVEQORCTCDNGOGVJQF
Colombo 10
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0WIGIQFC income approach
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FINANCIAL REPORTS
,19(670(173523(57,(6bContd.)

36 (c) ii Group
Property Name of professional Valuer /GVJQFQHXCNWCVKQPCPFUKIPKƂECPV 4CPIGQHGUVKOCVGUHQT

unobservable inputs unobservable inputs
Through the Bank -

+PFGRGPFGPEG /T)9)#DG[CIWPCYCTFGPG Income approach
#XGPWG 'UVKOCVGFTGPVRGTOQPVJ 4U
Colombo 07 ;GCTUUKPEGRWTEJCUG 22.22
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Through the subsidiary -
6LWKPD'HYHORSPHQW
3YW/WG
# /T)9)#DG[CIWPCYCTFGPG Depreciated replacement cost basis
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Colombo 01 4CVGRGT5SHVHQTDWKNFKPI 4U4U
-CPF[4QCF-GICNNG /T9/5-9CNKUWPFCTC Depreciated replacement cost basis
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Through the subsidiary -
HNB Finance PLC
0Q5VCPNG[6JKNGMGTCVJPC /T459KLGUWTK[C Income approach
/CYCVJC2CIQFC0WIGIQFC
'UVKOCVGFTGPVRGTOQPVJ 4U
&KUEQWPV4CVG
8KJCTC4QCF4CMGYCVVC/CVCNG /T459KLGUWTK[C /CTMGVEQORCTCDNGOGVJQF
0Q1NF2QNKEG5VCVKQP /T459KLGUWTK[C Income approach
4QCF-CJCVJFWYC
2QNICUQYKVC 'UVKOCVGFTGPVRGTOQPVJ 4U
&KUEQWPVTCVG
#FCORQFCKXC[CN /T459KLGUWTK[C /CTMGVEQORCTCDNGOGVJQF
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Trincomalee 4CVGRGTRGTEJHQTNCPF 4U

36 (c) iii Fair Valuation of Investment properties
(CKTXCNWCVKQPQHKPXGUVOGPVRTQRGTVKGUJGNFVJTQWIJVJG$CPMCPFVJTQWIJVJGUWDUKFKCT[5KVJOC&GXGNQROGPV
2XV.VFYCUECTTKGFQWVKP
YJKNGVJGHCKTXCNWCVKQPQHKPXGUVOGPVRTQRGTVKGUJGNFVJTQWIJVJGUWDUKFKCT[*0$(KPCPEG2.%YCUECTTKGFQWVKP
(CKTXCNWGQHVJGKPXGUVOGPVRTQRGTVKGUKUFGVGTOKPGFWUKPIVJGKPEQOGCRRTQCEJOCTMGVEQORCTCDNGOGVJQFCPFFGRTGEKCVGFTGRNCEGOGPV
cost basis.
8QREVHUYDEOHLQSXWVXVHGLQPHDVXULQJIDLUYDOXH
- Depreciated replacement cost basis/Market comparable method
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fair value.
- Income approach
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G 6WDWHPHQWRI,QFRPHDQG([SHQGLWXUHRILQYHVWPHQWSURSHUWLHVbbbbbbbbbbb
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Rental income derived from the investment properties 103,737 197,160
&KTGEVQRGTCVKPIGZRGPUGU
KPENWFKPITGRCKTCPFOCKPVGPCPEG
IGPGTCVKPITGPVCNKPEQOG - 19,400
FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bb
#%%1706+0)21.+%;
Basis of Recognition
2TQRGTV[RNCPVCPFGSWKROGPVCTGTGEQIPKUGFKHKVKURTQDCDNGVJCVHWVWTGGEQPQOKEDGPGƂVUCUUQEKCVGFYKVJVJGCUUGVUYKNNƃQYVQVJG
Group and cost of the asset can be reliably measured.
Measurement
#PKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVVJCVSWCNKƂGUHQTTGEQIPKVKQPCUCPCUUGVKUKPKVKCNN[OGCUWTGFCVKVUEQUV%QUVKPENWFGU
GZRGPFKVWTGVJCVKUFKTGEVN[CVVTKDWVCDNGVQVJGCESWKUKVKQPQHVJGCUUGVCPFEQUVKPEWTTGFUWDUGSWGPVN[VQCFFVQTGRNCEGRCTVQHQT
UGTXKEGKV6JGEQUVQHUGNHEQPUVTWEVGFCUUGVUKPENWFGUVJGEQUVQHOCVGTKCNUCPFFKTGEVNCDQWTCP[QVJGTEQUVUFKTGEVN[CVVTKDWVCDNGVQ
DTKPIKPIVJGCUUGVVQCYQTMKPIEQPFKVKQPHQTKVUKPVGPFGFWUGCPFVJGEQUVUQHFKUOCPVNKPICPFTGOQXKPIVJGKVGOUCPFTGUVQTKPIVJG
UKVGQPYJKEJVJQUGCTGNQECVGF2WTEJCUGFUQHVYCTGVJCVKUKPVGITCNVQVJGHWPEVKQPCNKV[QHVJGTGNCVGFGSWKROGPVKUECRKVCNKUGFCURCTVQH
EQORWVGTGSWKROGPV
9JGPRCTVUQHCPKVGOQHRTQRGTV[QTGSWKROGPVJCXGFKHHGTGPVWUGHWNNKXGUVJQUGCTGCEEQWPVGFHQTCUUGRCTCVGKVGOU
OCLQT
EQORQPGPVUQHRTQRGTV[RNCPVCPFGSWKROGPV
Cost Model
6JG)TQWRCRRNKGUEQUVOQFGNVQRTQRGTV[RNCPVCPFGSWKROGPVGZEGRVHQTHTGGJQNFNCPFCPFDWKNFKPIUCPFTGEQTFUCVEQUVQHRWTEJCUG
QTEQPUVTWEVKQPVQIGVJGTYKVJCP[KPEKFGPVCNGZRGPUGUVJGTGQPNGUUCEEWOWNCVGFFGRTGEKCVKQPCPFCP[CEEWOWNCVGFKORCKTOGPVNQUUGU
5HYDOXDWLRQ0RGHO
6JG)TQWRCRRNKGUVJGTGXCNWCVKQPOQFGNVQVJGGPVKTGENCUUQHHTGGJQNFNCPFCPFDWKNFKPIU5WEJRTQRGTVKGUCTGECTTKGFCVCTGXCNWGF
COQWPVDGKPIVJGKTHCKTXCNWGCVVJGFCVGQHTGXCNWCVKQPNGUUCP[UWDUGSWGPVCEEWOWNCVGFFGRTGEKCVKQPCPFUWDUGSWGPVCEEWOWNCVGF
KORCKTOGPVNQUU(TGGJQNFNCPFCPFDWKNFKPIUQHVJG)TQWRCTGTGXCNWGFCVNGCUVQPEGKPGXGT[VJTGG[GCTUQPCTQNNQXGTDCUKUVQGPUWTG
VJCVVJGECTT[KPICOQWPVUFQPQVFKHHGTOCVGTKCNN[HTQOVJGHCKTXCNWGUCVVJGTGRQTVKPIFCVG1PTGXCNWCVKQPQHCPCUUGVCP[KPETGCUGKP
VJGECTT[KPICOQWPVKUTGEQIPKUGFKPQVJGTEQORTGJGPUKXGKPEQOGCPFCEEWOWNCVGFKPGSWKV[WPFGTECRKVCNTGUGTXGQTWUGFVQTGXGTUGC
RTGXKQWUTGXCNWCVKQPFGETGCUGTGNCVKPIVQVJGUCOGCUUGVYJKEJYCUEJCTIGFVQVJGKPEQOGUVCVGOGPV+PVJKUEKTEWOUVCPEGVJGKPETGCUG
KUTGEQIPKUGFCUKPEQOGVQVJGGZVGPVQHVJGRTGXKQWUYTKVGFQYP#P[FGETGCUGKPVJGECTT[KPICOQWPVKUTGEQIPKUGFCUCPGZRGPUGKP
VJGKPEQOGUVCVGOGPVQTFGDKVGFKPVJGQVJGTEQORTGJGPUKXGKPEQOGVQVJGGZVGPVQHCP[ETGFKVDCNCPEGGZKUVKPIKPVJGECRKVCNTGUGTXGKP
TGURGEVQHVJCVCUUGV6JGFGETGCUGTGEQIPKUGFKPQVJGTEQORTGJGPUKXGKPEQOGTGFWEGUVJGCOQWPVCEEWOWNCVGFKPGSWKV[WPFGTECRKVCN
TGUGTXGU#P[DCNCPEGTGOCKPKPIKPVJGTGXCNWCVKQPTGUGTXGKPTGURGEVQHCPCUUGVKUVTCPUHGTTGFFKTGEVN[VQTGVCKPGFGCTPKPIUQPTGVKTGOGPV
or disposal of the asset.
5HFODVVL̍FDWLRQDV,QYHVWPHQW3URSHUW\b
9JGPVJGWUGQHCRTQRGTV[EJCPIGUHTQOQYPGTQEEWRKGFVQKPXGUVOGPVRTQRGTV[VJGRTQRGTV[KUTGOGCUWTGFVQHCKTXCNWGCPF
TGENCUUKƂGFCUCPKPXGUVOGPVRTQRGTV[#P[ICKPCTKUKPIQPTGOGCUWTGOGPVKUTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVVQVJGGZVGPVVJCVKV
TGXGTUGUCRTGXKQWUKORCKTOGPVNQUUQPVJGURGEKƂERTQRGTV[YKVJCP[TGOCKPKPIICKPTGEQIPKUGFKPQVJGTEQORTGJGPUKXGKPEQOGCPF
RTGUGPVGFKPTGXCNWCVKQPTGUGTXGKPGSWKV[#P[NQUUKUTGEQIPKUGFKOOGFKCVGN[KPVJGKPEQOGUVCVGOGPV
6XEVHTXHQW&RVWVbbb
6JGUWDUGSWGPVEQUVQHTGRNCEKPICEQORQPGPVQHCPKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVKUTGEQIPKUGFKPVJGECTT[KPICOQWPVQH
VJGKVGOKHKVKURTQDCDNGVJCVVJGHWVWTGGEQPQOKEDGPGƂVUGODQFKGFYKVJKPVJCVRCTVYKNNƃQYVQVJG)TQWRCPFKVUEQUVECPDGTGNKCDN[
OGCUWTGF6JGEQUVUQHFC[VQFC[UGTXKEKPIQHRTQRGTV[RNCPVCPFGSWKROGPVCTGEJCTIGFVQVJGKPEQOGUVCVGOGPVCUKPEWTTGF%QUVU
KPEWTTGFKPWUKPIQTTGFGRNQ[KPICPKVGOKUPQVKPENWFGFWPFGTECTT[KPICOQWPVQHCPKVGO
De-recognition
6JGECTT[KPICOQWPVQHCPKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVKUFGTGEQIPKUGFQPFKURQUCNQTYJGPPQHWVWTGGEQPQOKEDGPGƂVUCTG
GZRGEVGFHTQOKVUWUGQTFKURQUCN6JGICKPQTNQUUCTKUKPIHTQOVJGFGTGEQIPKVKQPQHCPKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVYJKEJKU
ECNEWNCVGFCUVJGFKHHGTGPEGDGVYGGPVJGECTT[KPICOQWPVCPFVJGPGVFKURQUCNRTQEGGFUKUKPENWFGFKPVJGKPEQOGUVCVGOGPVYJGPVJG
KVGOKUFGTGEQIPKUGF
9JGPTGRNCEGOGPVEQUVUCTGTGEQIPKUGFKPVJGECTT[KPICOQWPVQHCPKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVVJGTGOCKPKPIECTT[KPI
COQWPVQHVJGTGRNCEGFRCTVKUFGTGEQIPKUGF/CLQTKPURGEVKQPEQUVUCTGECRKVCNKUGF#VGCEJUWEJECRKVCNKUCVKQPVJGTGOCKPKPIECTT[KPI
COQWPVQHVJGRTGXKQWUEQUVQHKPURGEVKQPUKUFGTGEQIPKUGF

'HSUHFLDWLRQbbb
The Group provides depreciation from the date the assets are available for use up to the date of disposal. The assets are depreciated at
VJGHQNNQYKPITCVGUQPCUVTCKIJVNKPGDCUKUQXGTVJGRGTKQFUCRRTQRTKCVGVQVJGGUVKOCVGFWUGHWNNKXGUDCUGFQPVJGRCVVGTPKPYJKEJVJG
CUUGVoUHWVWTGGEQPQOKEDGPGƂVUCTGGZRGEVGFVQDGEQPUWOGFD[VJG)TQWRQVJGTVJCPFKUENQUGFUGRCTCVGN[&GRTGEKCVKQPQHCPCUUGV
EGCUGUCVVJGGCTNKGTQHVJGFCVGVJCVVJGCUUGVKUENCUUKƂGFCUJGNFHQTUCNGQTVJGFCVGVJCVVJGCUUGVKUFGTGEQIPKUGF&GRTGEKCVKQPFQGU
not cease when the assets become idle or is retired from active use unless the asset is fully depreciated.
+DWWRQ1DWLRQDO%DQN3/&DQGLWV6XEVLGLDU\&RPSDQLHVH[FHSWIRU6LWKPD'HYHORSPHQW3YW/WG
Class of Asset RGTCPPWO
(TGGJQNFDWKNFKPIU 2.50
Motor vehicles 25.00
%QORWVGTGSWKROGPV
1HƂEGGSWKROGPV 20.00
(WTPKVWTGCPFƂVVKPIU 10.00
Fixtures 10.00
6LWKPD'HYHORSPHQW3YW/WG
)GPGTCVQTUIGPGTCVQTRCPGNUCPFCUUQEKCVGFRQYGTECDNGU 2.00
%JKNNGTUEQQNKPIVQYGTUCPFCUUQEKCVGFGSWKROGPV 4.00
.KHVUCPFGUECNCVQTU 4.00
$WKNFKPIOCPCIGOGPVU[UVGOU 4.00
Plant and machinery 20.00
'SWKROGPV 20.00
(WTPKVWTGCPFƂVVKPIU 10.00
&DSLWDO:RUNLQ3URJUHVVbb
6JGUGCTGGZRGPUGUQHCECRKVCNPCVWTGFKTGEVN[KPEWTTGFKPVJGEQPUVTWEVKQPQHDWKNFKPIUCPFOCLQTRNCPVCPFOCEJKPGT[CYCKVKPI
ECRKVCNKUCVKQP%CRKVCNYQTMKPRTQITGUUYQWNFDGVTCPUHGTTGFVQVJGTGNGXCPVCUUGVYJGPKVKUCXCKNCDNGHQTWUGKGYJGPKVKUKPVJGNQECVKQP
CPFEQPFKVKQPPGEGUUCT[HQTKVVQDGECRCDNGQHQRGTCVKPIKPVJGOCPPGTKPVGPFGFD[OCPCIGOGPV%CRKVCNYQTMKPRTQITGUUKUUVCVGFCV
cost less any accumulated impairment losses.
%RUURZLQJ&RVWV
$QTTQYKPIEQUVUVJCVCTGFKTGEVN[CVVTKDWVCDNGVQVJGCESWKUKVKQPEQPUVTWEVKQPQTRTQFWEVKQPQHCSWCNKH[KPICUUGVJCXGDGGPECRKVCNKUGF
CURCTVQHVJGEQUVQHVJGCUUGVKPCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp$QTTQYKPI%QUVUq#SWCNKH[KPICUUGVKU
CPCUUGVYJKEJVCMGUUWDUVCPVKCNRGTKQFQHVKOGVQIGVTGCF[HQTKVUKPVGPFGFWUGQTUCNG%CRKVCNKUCVKQPQHDQTTQYKPIEQUVUEGCUGUYJGP
UWDUVCPVKCNN[CNNVJGCEVKXKVKGUPGEGUUCT[VQRTGRCTGVJGSWCNKH[KPICUUGVHQTKVUKPVGPFGFWUGCTGEQORNGVGF1VJGTDQTTQYKPIEQUVUCTG
TGEQIPKUGFKPVJGKPEQOGUVCVGOGPVKPVJGRGTKQFKPYJKEJVJG[KPEWT
FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bContd.)
#557/26+105#0&'56+/#6+1070%'46#+06+'5
)DLUYDOXHRIIUHHKROGODQGDQGEXLOGLQJV
6JGHTGGJQNFNCPFCPFDWKNFKPIUQHVJG)TQWRCTGTGƃGEVGFCVHCKTXCNWG6JG)TQWRGPICIGUKPFGRGPFGPVXCNWGTUVQFGVGTOKPGVJGHCKT
XCNWGQHHTGGJQNFNCPFCPFDWKNFKPIUKPVGTOUQH5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45QPp(CKT8CNWG/GCUWTGOGPVq
6JGOGVJQFUWUGFVQFGVGTOKPGVJGHCKTXCNWGQHVJGHTGGJQNFNCPFCPFDWKNFKPIUCTGHWTVJGTGZRNCKPGFKP0QVG
FVQVJGƂPCPEKCN
statements. .
Useful Life Time of Property, Plant and Equipment

6JG)TQWRTGXKGYUVJGTGUKFWCNXCNWGUWUGHWNNKXGUCPFOGVJQFUQHFGRTGEKCVKQPQHRTQRGTV[RNCPVCPFGSWKROGPVCVGCEJTGRQTVKPIFCVG
/CPCIGOGPVGZGTEKUGULWFIGOGPVKPVJGGUVKOCVKQPQHVJGUGXCNWGUTCVGUOGVJQFUCPFJGPEGVJQUGCTGUWDLGEVVQWPEGTVCKPV[
Bank ,PSURYHPHQWV Freehold Computer Equipment Motor Capital 2022 2021

to Land and Equipment Furniture Vehicles Work-in Total Total
Leasehold Buildings and Progress
Buildings Fixtures
Note 37 (b) Note 37 (a)
&RVWYDOXDWLRQDVDWVW-DQXDU\ 36,466,698

Accumulated depreciation adjustment on
revaluation -

Revaluation surplus -
Additions and improvements 1,173,458
&KURQUCNUFWTKPIVJG[GCT

(69,125)

0GVKORCKTOGPVEJCTIG -

6TCPUHGTTGFHTQOECRKVCNYQTMKPRTQITGUU 912
-
&RVWYDOXDWLRQDVDWVW'HFHPEHU 37,571,031
Accumulated depreciation as at 1st January 11,512,960
revaluation -

D? 1,287,867

(65,525)

Accumulated depreciation as at 31st December 12,735,302
&DUU\LQJYDOXHDVDWVW'HFHPEHU 24,835,729
&DUU\LQJYDOXHDVDWVW'HFHPEHU

Group ,PSURYHPHQWV Freehold Computer Equipment Motor Capital 2022 2021
to Land and Equipment Furniture Vehicles Work-in Total Total
Leasehold Buildings and Progress
Buildings Fixtures
Note 37 (b) Note 37 (a)
&RVWYDOXDWLRQDVDWVW-DQXDU\ 64,035,160

revaluation
(69,539)

Revaluation surplus 200,070
#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.% -
Additions and improvements 555 1,471,498
0GV+ORCKTOGPVEJCTIG -


(121,727)

Transferred from investment properties -
6TCPUHGTTGFHTQOECRKVCNYQTMKPRTQITGUU 912
-
&RVWYDOXDWLRQDVDWVW'HFHPEHU 65,515,462
Accumulated depreciation as at 1st January 14,310,687
revaluation
(69,539)

#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.% -
D? 1,782,933

(124,957)

Accumulated depreciation as at 31st December 15,899,124
&DUU\LQJYDOXHDVDWVW'HFHPEHU 49,616,338
&DUU\LQJYDOXHDVDWVW'HFHPEHU
FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bContd.)

37 (a) Information on Freehold Land and Buildings of the Bank - Extents and Locations
$VUHTXLUHGE\WKH5XOHYLLLRIWKH/LVWLQJ5XOHVRIWKH&RORPER6WRFN([FKDQJH bb
Bank Land Buildings Cost/ Cost/ Total Accumulated As at 31st As at 31st

Perches Sq.ft. Valuation Valuation Value Depreciation December December
of of 2022 2021
Land Buildings Carrying Carrying
Value Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Akkaraipattu Branch
/CKP5VTGGV#MMCTCKRCVVW 19.32 170,585
Ambalangoda Branch
0GY)CNNG4QCF#ODCNCPIQFC 29.90 174,554
Anuradhapura Branch
/CKVJTKRCNC5GPCPC[CMG/CYCVJC
Anuradhapura. 57.01 212,925
Badulla Branch
7FC[CTCLC/CYCVJC$CFWNNC 28.44 146,872
Bambalapitiya Branch
)CNNG4QCF%QNQODQ 20.00 547,117
%RUDOHVJDPXZD%UDQFK
/CJCTCICOC4QCF$QTCNGUICOWYC 30.34 212,340
Borella Branch
&55GPCPC[CMG/CYCVJC%QNQODQ 28.00 508,356
Centre of Aspirations
8KPC[CNCPMCTC/CYCVJC%QNQODQ 249.00 4,314,215
Centralised Operations
5TK7VVCTCPCPFC/CYCVJC%QNQODQ 40.00 1,626,488
&LW\2I̍FH
,CPCFJKRCVJK/CYCVJC%QNQODQ 84.00 2,456,574
&KDYDNDFKFKHUL%UDQFK
-CPF[4QCF%JCXCMCEJEJGTK 35.31 71,682
Dambulla Branch
$#PWTCFJCRWTC4QCF&CODWNNC 87.00 275,223
)UXLWKLOO%XQJDORZ
0Q&KODWNC4QCF*CVVQP 53.08 45,872
Galle Branch
9CMYGNNC4QCF)CNNG 13.28 166,572
Gampaha Branch
%QNQODQ4QCF)CORCJC 25.00 273,005
Gampola Branch
-CPF[4QCF)CORQNC 17.05 208,689
Grandpass Branch
5V,QUGRJ5VTGGV%QNQODQ 24.00 334,184

of of 2022 2021
Value Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Gunasinghapura Stores
/QJCPFKTCOoU4QCF%QNQODQ 48.30 489,105
Ja-Ela Branch
1NF0GIQODQ4QCF-CPWYCPC,C'NC 19.00 62,000
Jaffna Metro Branch
2QPPCORCNCO4QCF,CHHPC 660,536
.DKDZDWWH%UDQFK
#/CKP5VTGGV-CJCYCVVG 83,213
Kalmunai Branch
#$CVVKECNQC4QCF-CNOWPCK 25.10 950 142,962
Kandy Branch
&CNCFC8GGFK[C-CPF[ 1,403,067
Kuliyapitiya Branch
/CKP5VTGGV-WNK[CRKVK[C 25.30 71,247
Kurunegala Branch
5V#PPGoU5VTGGV-WTWPGICNC 305,789
0RXQW%XQJDORZ
/QWPV4QCF*CVVQP 68,852
Mannar Branch
/CKP5VTGGV/CPPCT 23.00 61,507
0DUDZLOD%UDQFK
%QNQODQ4QCF/CTCYKNC 42.00 108,072
Maskeliya Branch
0GY6QYP/CUMGNK[C 20.32 93,122
Matara Branch
&'URNCPCFG4QCF/CVCTC 22.50 145,690
0LQXZDQJRGD%UDQFK
5COCTCMMQF[4QCF/KPWYCPIQFC 20.51 83,108
0DQDJHUVʹ%XQJDORZ
&KODWNC4QCF*CVVQP 42.20 413 26,987
0RXQW/DYLQLD%UDQFK
)CNNG4QCF/QWPV.CXKPKC 284,676
Negombo Branch
4CLCRCMUG$TQCFYC[0GIQODQ 8.88 60,317
Negombo Metro
%QNQODQ4QCF0GIQODQ 51.98 396,585
1LWWDPEXZD%UDQFK
-CPF[4QCF0KVVCODWYC 318,461
Nochchiyagama Branch *
2WVVCNCO4QCF0QEJEJK[CICOC 47,830
FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bContd.)

of of 2022 2021
Value Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
1XZDUD(OL\D%UDQFK%XQJDORZ
3WGGP'NK\CDGVJ&TKXG0WYCTC'NK[C 149.03 916,448
Nugegoda Branch
*KIJNGXGN4QCF
0GY0WIGIQFC 39.70 636,424
3DQFKLNDZDWWH%UDQFK
2CPEJKMCYCVVC4QCF%QNQODQ 22.55 410,706
Pettah Branch
/CKP5VTGGV%QNQODQ 13.03 506,281
Pettah Metro **
/CKP5VTGGV%QNQODQ 120,792
3RORQQDUXZD%UDQFK
/CKP5VTGGV-CFWTWYGNC2QNQPPCTWYC 75,783
3XVVHOODZD%UDQFK
0WYCTC'NK[C4QCF2WUUGNNCYC 14.30 95,226
Ratnapura Branch
5GPCPC[CMG/CYCVJC4CVPCRWTC 43.40 282,926
Sea Street Branch
5GC5VTGGV%QNQODQ 253,675
Trincomalee Branch
'JCORCTCO4QCF6TKPEQOCNGG 31.75 146,977
9DYXQL\D%UDQFK
+PPGT%KTEWNCT4QCF8CXWPK[C 34,964
Wattala Branch
0GIQODQ4QCF9CVVCNC 53.00 372,032
Welimada Branch
0WYCTC'NK[C4QCF9GNKOCFC 14.37 118,831
:HOODZD\D%UDQFK
-WOCTCFCUC/CYCVJC9GNNCYC[C 25.50 70,781
:HOODZDWWH%UDQFK
)CNNG4QCF%QNQODQ 913,170
Total freehold land and buildings - Bank 21,613,395
$WKNFKPIUEQPUVTWEVGFQPUVCVGNCPFIKXGPQPNGCUG
** Condominium property
$CPMJCUHTGGJQNFDWKNFKPIUCUCVUV&GEGODGT

D ,QIRUPDWLRQRQ)UHHKROG/DQGDQG%XLOGLQJVRIWKH*URXSb([WHQWVDQG/RFDWLRQV
Group Land Buildings Cost/ Cost/ Total Accumulated As at 31st As at 31st

of of 2022 2021
Land Buildings Net Book Net Book
Value Value
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Through the subisdiary - Sithma

'HYHORSPHQW3YW/WG
6$,C[CJ/CYCVJC%QNQODQ
=0QVG
DKK? 113.00 20,499,179
,CPCFJKRCVJK/CYCVJC%QNQODQ
=0QVG
DKK? 718,700
-CPF[4QCF-GICNNG 202,680
Through the subsidiary - HNB Finance PLC
-CPF[4QCF-WTWPCIGNC 7.05 109,490
#6CPICNNG4QCF*CODCPVJQVC 14.20 318 21,682
9KNNKCO)QRCNNCYC/CYCVJC-CPF[ 93,235
0CYCNC4QCF0WIGIQFC 25.90 920,116
0Q/CJKPFC2NCEG-KTWNCRQPG%QNQODQ 8.00 147,690
0Q)CNNG4QCF-CVWDGFFC/QTCVWYC 23.00 57,500
0Q2WVVCNCO5GTXKEG/CYCVJC2WVVCNCO 97,982
0Q#DC[C2NCEGVJ.CPG#PWTCFCRWTC 13.52 141,326
Total freehold land and buildings -Subsidiaries 23,009,580
7RWDOIUHHKROGODQGDQGEXLOGLQJV*URXSb 44,622,975
37 (b) Improvements to Leasehold Buildings
Bank Group
As at 31st December 2022 2021 2022 2021
Cost of Accumulated Net Net Cost of Accumulated Net Net
Buildings Depreciation Book Value Book Value Buildings Depreciation Book Value Book Value
[GCTU 987,711 917,231 70,480 987,711 917,231 70,480

[GCTU 970,100 833,185 136,915 970,100 833,185 136,915
[GCTU 48,460 39,127 9,333 48,460 39,127 9,333
[GCTU 46,454 30,192 16,262 46,454 30,192 16,262
2,052,725 1,819,735 232,990 2,052,725 1,819,735 232,990
FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bContd.)

Fb7KH'HWDLOVRI)UHHKROG/DQGDQG%XLOGLQJV:KLFKDUH6WDWHGDW9DOXDWLRQ%DQN
#UTGSWKTGFD[4WNG
XKKKQH.KUVKPI4WNGUQH%QNQODQ5VQEM'ZEJCPIG
&CVGQHXCNWCVKQPUV&GEGODGT
$CPM Name of 4CPIGQH'UVKOCVGUHQT %CTT[KPI8CNWGDGHQTG Revalued Amount of 4GXCNWCVKQP)CKP

Professional Valuer 7PQDUGTXCDNG+PRWVU Revaluation of
.QUUTGEQIPKUGFQP
.CPF $WKNFKPIU .CPF $WKNFKPIU .CPF $WKNFKPIU

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
#MMCTCKRCVVW$TCPEJ Mr. S. Suresh 4URR4URUSHV

#ODCNCPIQFC$TCPEJ /T)-&-#DC[CVJWPIC 4URR4URUSHV

#PWTCFJCRWTC$TCPEJ /T9/5-9CNKUWPFCTC 4UVQ4URR
4UVQ4URUSHV
$CFWNNC$TCPEJ /T'22,C[CTCVPG 4URR4UVQ
4URUSHV

$CODCNCRKVK[C$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4URUSHV
VQ4URUSHV
$QTCNGUICOWYC$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
$QTGNNC$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
Centre of Aspiration /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV

%JCXCMCEJEJGTK$TCPEJ Mr. S. Suresh 4URR4URUSHV

%KV[1HƂEG /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
&CODWNNC$TCPEJ /T9/5-9CNKUWPFCTC 4UVQ4URR
4UVQ4URUSHV
(TWKVJKNN$WPICNQY Mr. A. Senevirathne 4URR4URUSHV
)CNNG$TCPEJ /T)-&-#DC[CVJWPIC 4URR4U
RUSHV
)CORCJC$TCPEJ Mr. D.C. Sosa 4URR4U
VQ4URUSHV
)CORQNC$TCPEJ Mr. A. Senevirathne 4URR4U
RUSHV
)TCPFRCUU$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
)WPCUKPIJGRWTC5VQTGU /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
,C'NC$TCPEJ Mr. D.C. Sosa 4URR
,CHHPC/GVTQ$TCPEJ Mr. S. Suresh 4URR4URUSHV

-CJCYCVVG$TCPEJ /T'22,C[CTCVPG 4URR4U
VQ4URUSHV
-CNOWPCK$TCPEJ Mr. S. Suresh 4URR4URUSHV

-CPF[$TCPEJ Mr. A. Senevirathne 4URR4U
VQ4URUSHV
-WNK[CRKVK[C$TCPEJ /T9/5-9CNKUWPFCTC 4U4URUSHV
VQ4URUSHV

.QUUTGEQIPKUGFQP

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
-WTWPGICNC$TCPEJ /T9/5-9CNKUWPFCTC 4URR4U

VQ4URUSHV

/QWPV$WPICNQY Mr. A. Senevirathne 4URR4URUSHV 775
/CPPCT$TCPEJ Mr. S. Suresh 4URR4U
VQRUSHV
/CTCYKNC$TCPEJ /T9/5-9CNKUWPFCTC 4URR4U
VQ4URUSHV
/CUMGNK[C$TCPEJ Mr. A. Senevirathne 4URR4U
VQ4URUSHV
/CVCTC$TCPEJ /T)-&-#DC[CVJWPIC 4URR4URUSHV
/KPWYCPIQFC$TCPEJ Mr. D.C. Sosa 4URR4URUSHV
/CPCIGT$WPICNQY Mr. A. Senevirathne 4URR4URUSHV

/QWPV.CXKPKC$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
0GIQODQ$TCPEJ Mr. D.C. Sosa 4URR4U
VQ4URUSHV
0GIQODQ/GVTQ Mr. D.C. Sosa 4URR4U
$WKNFKPI VQ4URUSHV
0KVVCODWYC$TCPEJ Mr. D.C. Sosa 4URR4U
VQ4URUSHV
0QEJEJK[CICOC /T9/5-9CNKUWPFCTC 4UVQ4URUSHV
$TCPEJ
0WIGIQFC$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
0WYCTC'NK[C$TCPEJ Mr. A. Senevirathne 4UVQ4URR
$WPICNQY 4UVQ4URUSHV

2CPEJKMCYCVVC$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4URUSHV
VQ4URUSHV
2GVVCJ$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4URUSHV
VQ4URUSHV
Pettah Metro** /T)9)#DG[IWPCYCTFGPG 4URUSHVVQ4URUSHV
2QNQPPCTWYC$TCPEJ /T9/5-9CNKUWPFCTC 4UVQ4URUSHV
2WUUGNNCYC$TCPEJ Mr. A. Senevirathne 4URR4URUSHV
4CVPCRWTC$TCPEJ /T'22,C[CTCVPG 4URR4U
VQ4URUSHV

5GC5VTGGV$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4URUSHV
VQ4URUSHV
6TKPEQOCNGG$TCPEJ Mr. S. Suresh 4URR4URUSHV

8CXWPK[C$TCPEJ Mr. S. Suresh 4URUSHV
9CVVCNC$TCPEJ Mr. D.C. Sosa 4URR4URUSHV

9GNKOCFC$TCPEJ /T'22,C[CTCVPG 4URR4U
VQ4URUSHV

FINANCIAL REPORTS
3523(57<3/$17$1'(48,30(17bContd.)

.QUUTGEQIPKUGFQP

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
9GNNCYC[C$TCPEJ /T'22,C[CTCVPG 4URRVQ4U

RR4UVQ4URUSHV
9GNNCYCVVG$TCPEJ /T)9)#DG[IWPCYCTFGPG 4URR4U
VQ4URUSHV
Centralised Operations /T)9)#DG[IWPCYCTFGPG 4URR4URUSHV
$WKNFKPI VQ4URUSHV

$WKNFKPIUEQPUVTWEVGFQPVJGUVCVGNCPFIKXGPQPNGCUG
** Condominium property
37 (d) Fair value measurement of Freehold land and buildings

)KXGPDGNQYCTGVJGXCNWCVKQPVGEJPKSWGUWUGFKPOGCUWTKPIHTGGJQNFNCPFCPFDWKNFKPIU
Type 8CNWCVKQPVGEJPKSWG +PVGTTGNCVKQPUJKRDGVYGGPUKIPKƂECPVWPQDUGTXCDNGKPRWVUCPFHCKTXCNWG

measurement
(TGGJQNFNCPFCPFDWKNFKPIU Depreciated replacement cost basis This method involves the capitalisation of expected cost of
EQPUVTWEVKQPCVCRRTQRTKCVGTGOCKPKPINKHGVKOGQHVJGDWKNFKPI
5KIPKƂECPVKPETGCUG
FGETGCUGKPGUVKOCVGFRTKEGRGTRGTEJRTKEGRGT
USHVCPFFGRTGEKCVKQPTCVGYQWNFTGUWNVKPCUKIPKƂECPVN[JKIJGT
NQYGT
fair value.
/CTMGVEQORCTCDNGOGVJQF /CTMGVEQORCTCDNGOGVJQFEQPUKFGTUVJGUGNNKPIRTKEGQHCUKOKNCT
RTQRGTV[YKVJKPCTGCUQPCDNGRGTKQFQHVKOGKPFGVGTOKPKPIVJGHCKT
XCNWGQHVJGRTQRGTV[DGKPITGXCNWGF6JKUKPXQNXGUGXCNWCVKQPQHTGEGPV
CEVKXGOCTMGVRTKEGUQHUKOKNCTCUUGVUOCMKPICRRTQRTKCVGCFLWUVOGPVHQT
FKHHGTGPEGUKPUK\GPCVWTGNQECVKQPCPFEQPFKVKQPQHVJGURGEKƂERTQRGTV[
+PVJKURTQEGUUQWVNKGTVTCPUCEVKQPUKPFKECVKXGQHRCTVKEWNCTN[OQVKXCVGF
DW[GTUQTUGNNGTUCTGEQORGPUCVGFHQTUKPEGVJGRTKEGOC[PQVCFGSWCVGN[
TGƃGEVVJGHCKTOCTMGVXCNWG
Investment method This method involves the capitalisation of the expected rental income
at an appropriate rate of years purchased currently characterised by
VJGTGCNGUVCVGOCTMGV5KIPKƂECPVKPETGCUG
FGETGCUGKPTGPVRGTUSHV
QWVIQKPIGZRGPUGUCPFPWODGTQH[GCTUUKPEGRWTEJCUGYQWNFTGUWNVKPC
UKIPKƂECPVN[JKIJGT
NQYGTHCKTXCNWG
6JGHCKTXCNWGUQHVJG)TQWRoUHTGGJQNFNCPFCPFDWKNFKPIUCTGFGVGTOKPGFD[KPFGRGPFGPVXCNWGTUCVNGCUVQPEGKPGXGT[VJTGG[GCTUCEEQTFKPI
VQVJG)TQWRoURQNKE[&WTKPIVJG[GCTVJGHCKTXCNWGUQHVJG)TQWRoUHTGGJQNFNCPFCPFDWKNFKPIUYGTGFGVGTOKPGFD[KPFGRGPFGPVXCNWGTU
CURGTVJG)TQWRoURQNKE[VQTGXCNWGVJGHTGGJQNFNCPFCPFDWKNFKPIUCVNGCUVQPEGKPGXGT[VJTGG[GCTU

37 (e) Temporarily Idle Property, Plant and Equipment - Bank
6JGTGYCUPQVGORQTCTKN[KFNGRTQRGTV[RNCPVCPFGSWKROGPVCUCVUV&GEGODGT
37 (f) Compensation from Third Parties for Property, Plant and Equipment - Bank
0QEQORGPUCVKQPYCUTGEGKXGFHTQOVJKTFRCTVKGUHQTKVGOUQHRTQRGTV[RNCPVCPFGSWKROGPVVJCVYGTGKORCKTGFNQUVQTIKXGPWR
37 (g) Capitalisation of Borrowing Costs

$QTTQYKPIEQUVUYGTGPQVECRKVCNK\GFKPVJGCESWKUKVKQPQHRTQRGTV[RNCPVCPFGSWKROGPVFWTKPIVJG[GCT
0KN
37 (h) Title restriction on property plant and equipment

6JGTGYGTGPQTGUVTKEVKQPUQPVJGVKVNGQHVJGRTQRGTV[RNCPVCPFGSWKROGPVQHVJG)TQWR$CPMCUCVVJGTGRQTVKPIFCVG
37 (i) Property plant and equipment pledged as security for liabilities - Bank
6JGTGYGTGPQKVGOQHRTQRGTV[RNCPVCPFGSWKROGPVRNGFIGFCUUGEWTKVKGUHQTNKCDKNKVKGUCUCVVJGTGRQTVKPIFCVGKPVJG$CPM
37 (j) Fully Depreciated Property, Plant and Equipment

6JGKPKVKCNEQUVQHHWNN[FGRTGEKCVGFRTQRGTV[RNCPVCPFGSWKROGPVYJKEJCTGUVKNNKPWUGCUCVVJGTGRQTVKPIFCVGKUCUHQNNQYU
Bank
Rs 000 Rs 000
.GCUGJQNFDWKNFKPI 1,546,463

%QORWVGTGSWKROGPV 3,246,804
1HƂEGGSWKROGPVHWTPKVWTGCPFƂZVWTGU 4,097,515
Motor Vehicle 120,377
9,011,159
37(k) Assessment of Impairment

6JG$QCTFQH&KTGEVQTUJCUCUUGUUGFVJGRQVGPVKCNKORCKTOGPVNQUUQPRTQRGTV[RNCPVCPFGSWKROGPVCUCVUV&GEGODGT$CUGFQPVJG
CUUGUUOGPVPQKORCKTOGPVRTQXKUKQPKUTGSWKTGFVQDGOCFGKPVJGƂPCPEKCNUVCVGOGPVUCUCVTGRQTVKPIFCVG
O &KDQJHLQ&ODVVĽFDWLRQIURPWR,QYHVWPHQW3URSHUWLHV
)TQWRFKFPQVTGENCUUKH[CP[RTQRGTV[RNCPVCPFGSWKROGPVCUKPXGUVOGPVRTQRGTVKGUFWTKPIVJG[GCT&GVCKNUQHKPXGUVOGPVRTQRGTVKGU
TGENCUUKƂGFCURTQRGTV[RNCPVCPFGSWKROGPVJCXGDGGPRTQXKFGFKP
DKX
FINANCIAL REPORTS
38 RIGHT-OF-USE ASSETS
#%%1706+0)21.+%;
+PCEEQTFCPEGYKVJ5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p.GCUGq)TQWRCEEQWPVUHQTCNNNGCUGJQNFTKIJVUGZEGRVHQTUJQTVVGTO
NGCUGUYJKEJCTGJGNFHQTWUGKPVJGRTQXKUKQPQHUGTXKEGU#VKPEGRVKQPQHCEQPVTCEVVJG)TQWRCUUGUUGUYJGVJGTCEQPVTCEVKUQT
EQPVCKPUCNGCUG#EQPVTCEVKUCNGCUGQTEQPVCKPUCNGCUGKHVJGEQPVTCEVEQPXG[UVJGTKIJVVQEQPVTQNVJGWUGQHCPKFGPVKƂGFCUUGVHQTC
RGTKQFQHVKOGKPGZEJCPIGHQTEQPUKFGTCVKQP
• Group acting as a lessee

#VEQOOGPEGOGPVQTQPOQFKƂECVKQPQHCEQPVTCEVVJCVEQPVCKPUCNGCUGEQORQPGPVVJG)TQWRCNNQECVGUEQPUKFGTCVKQPQHVJGEQPVTCEV
VQGCEJNGCUGEQORQPGPVQPVJGDCUKUQHKVUTGNCVKXGUVCPFCNQPGRTKEG*QYGXGTHQTNGCUGUQHDTCPEJGUCPFQHƂEGRTGOKUGUVJG)TQWRJCU
GNGEVGFPQVVQUGRCTCVGPQPNGCUGEQORQPGPVCPFCEEQWPVUHQTVJGNGCUGCPFPQPNGCUGEQORQPGPVUCUCUKPINGNGCUGEQORQPGPV
6JG)TQWRTGEQIPKUGUCTKIJVQHWUGCUUGVCPFCNGCUGNKCDKNKV[CVVJGNGCUGEQOOGPEGOGPVFCVG6JGTKIJVQHWUGCUUGVKUKPKVKCNN[
OGCUWTGFCVEQUVYJKEJEQORTKUGUVJGKPKVKCNCOQWPVQHVJGNGCUGNKCDKNKV[CFLWUVGFHQTCP[NGCUGRC[OGPVUOCFGCVQTDGHQTGVJG
EQOOGPEGOGPVFCVGRNWUCP[KPKVKCNFKTGEVEQUVUKPEWTTGFCPFCPGUVKOCVGQHEQUVUVQFKUOCPVNGCPFTGOQXGCP[KORTQXGOGPVUOCFGVQ
DTCPEJGUQTQHƂEGRTGOKUGU
6JGTKIJVQHWUGCUUGVKUUWDUGSWGPVN[FGRTGEKCVGFWUKPIVJGUVTCKIJVNKPGOGVJQFHTQOVJGEQOOGPEGOGPVFCVGVQVJGGPFQHVJGNGCUG
VGTO+PCFFKVKQPVJGTKIJVQHWUGCUUGVKURGTKQFKECNN[TGFWEGFD[KORCKTOGPVNQUUGUKHCP[CPFCFLWUVGFHQTEGTVCKPTGOGCUWTGOGPVUQH
the lease liability.
6JGNGCUGNKCDKNKV[KUKPKVKCNN[OGCUWTGFCVVJGRTGUGPVXCNWGQHVJGNGCUGRC[OGPVUVJCVCTGPQVRCKFCVVJGEQOOGPEGOGPVFCVG
FKUEQWPVGFWUKPIVJGKPVGTGUVTCVGKORNKEKVKPVJGNGCUGQTKHVJCVTCVGECPPQVDGTGCFKN[FGVGTOKPGFVJG)TQWRoUKPETGOGPVCNDQTTQYKPI
TCVG)GPGTCNN[VJG)TQWRWUGUKVUKPETGOGPVCNDQTTQYKPITCVGCUVJGFKUEQWPVTCVG
6JG)TQWRFGVGTOKPGUKVUKPETGOGPVCNDQTTQYKPITCVGD[CPCN[UKPIKVUDQTTQYKPIUHTQOXCTKQWUGZVGTPCNUQWTEGUCPFOCMGUEGTVCKP
CFLWUVOGPVUVQTGƃGEVVJGVGTOUQHVJGNGCUGCPFV[RGQHCUUGVNGCUGF
6JGNGCUGNKCDKNKV[KUOGCUWTGFCVCOQTVKUGFEQUVWUKPIVJGGHHGEVKXGKPVGTGUVOGVJQF+VKUTGOGCUWTGFYJGPVJGTGKUCEJCPIGKPHWVWTG
NGCUGRC[OGPVUCTKUKPIHTQOCEJCPIGKPCPKPFGZQTTCVGKHVJGTGKUCEJCPIGKPVJG)TQWRoUGUVKOCVGQHVJGCOQWPVGZRGEVGFVQDG
RC[CDNGWPFGTCTGUKFWCNXCNWGIWCTCPVGGKHVJG)TQWREJCPIGUKVUCUUGUUOGPVQHYJGVJGTKVYKNNGZGTEKUGCRWTEJCUGGZVGPUKQPQT
VGTOKPCVKQPQRVKQPQTKHVJGTGKUCTGXKUGFKPUWDUVCPEGƂZGFNGCUGRC[OGPV
9JGPVJGNGCUGNKCDKNKV[KUTGOGCUWTGFKPVJKUYC[CEQTTGURQPFKPICFLWUVOGPVKUOCFGVQVJGECTT[KPICOQWPVQHVJGTKIJVQHWUGCUUGV
QTKUTGEQTFGFKPRTQƂVQTNQUUKHVJGECTT[KPICOQWPVQHVJGTKIJVQHWUGCUUGVJCUDGGPTGFWEGFVQ\GTQ
6JG)TQWRRTGUGPVUTKIJVQHWUGCUUGVUKPVJGHCEGQHVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPCPFNGCUGNKCDKNKVKGUYKVJKPpQVJGTNKCDKNKVKGUqKPVJG
UVCVGOGPVQHƂPCPEKCNRQUKVKQP
ˀ6KRUWWHUPOHDVHVDQGOHDVHVRIORZYDOXHDVVHWVb
6JG)TQWRJCUGNGEVGFPQVVQTGEQIPKUGTKIJVQHWUGCUUGVUCPFNGCUGNKCDKNKVKGUHQTNGCUGUQHNQYXCNWGCUUGVUCPFUJQTVVGTONGCUGU
KPENWFKPINGCUGUQH+6GSWKROGPV6JG)TQWRTGEQIPKUGUVJGNGCUGRC[OGPVUCUUQEKCVGFYKVJVJGUGNGCUGUCUCPGZRGPUGQPCUVTCKIJVNKPG
basis over the lease term.
ˀ*URXSDFWLQJDVDOHVVRUb
#VKPEGRVKQPQTQPOQFKƂECVKQPQHCEQPVTCEVVJCVEQPVCKPUCNGCUGEQORQPGPVVJG)TQWRCNNQECVGUVJGEQPUKFGTCVKQPKPVJGEQPVTCEVVQ
GCEJNGCUGEQORQPGPVQPVJGDCUKUQHVJGKTTGNCVKXGUVCPFCNQPGUGNNKPIRTKEGU
9JGPVJG)TQWRCEVUCUCNGUUQTKVFGVGTOKPGUCVNGCUGKPEGRVKQPYJGVJGTVJGNGCUGKUCƂPCPEGNGCUGQTCPQRGTCVKPINGCUG
6QENCUUKH[GCEJNGCUGVJG)TQWROCMGUCPQXGTCNNCUUGUUOGPVQHYJGVJGTVJGNGCUGVTCPUHGTUUWDUVCPVKCNN[CNNQHVJGTKUMUCPFTGYCTFU
KPEKFGPVCNVQQYPGTUJKRQHVJGWPFGTN[KPICUUGV+HVJKUKUVJGECUGVJGPVJGNGCUGKUCƂPCPEGNGCUGKHPQVVJGPKVKUCPQRGTCVKPINGCUG#U
RCTVQHVJKUCUUGUUOGPVVJG)TQWREQPUKFGTUEGTVCKPKPFKECVQTUUWEJCUYJGVJGTVJGNGCUGKUHQTVJGOCLQTRCTVQHVJGGEQPQOKENKHGQHVJG
asset.
6JG)TQWRCRRNKGUVJGFGTGEQIPKVKQPCPFKORCKTOGPVTGSWKTGOGPVUKP5.(45VQVJGPGVKPXGUVOGPVKPVJGNGCUG6JG)TQWRHWTVJGT
TGIWNCTN[TGXKGYUGUVKOCVGFWPIWCTCPVGGFTGUKFWCNXCNWGUWUGFKPECNEWNCVKPIVJGITQUUKPXGUVOGPVKPVJGNGCUG
6JGFGVCKNUQHNGCUGTGEGKXCDNGUYJKEJEQORTKUGQHƂPCPEGNGCUGUYJGTGVJGITQWRCEVUCUVJGNGUUQTCTGFKUENQUGFKPPQVGVQVJG
ƂPCPEKCNUVCVGOGPVU

• Leases as lessee
6JG$CPMNGCUGUCPWODGTQHDTCPEJCPFQHƂEGRTGOKUGU(QTUQOGNGCUGURC[OGPVUCTGTGPGIQVKCVGFQPEGKPGXGT[ƂXG[GCTUVQTGƃGEV
OCTMGVTGPVCNU5QOGNGCUGURTQXKFGHQTCFFKVKQPCNTGPVRC[OGPVUVJCVCTGDCUGFQPEJCPIGUKPNQECNRTKEGKPFKEGU
6JGNGCUGUQPDTCPEJCPFQHƂEGRTGOKUGUYGTGGPVGTGFKPVQOCP[[GCTUCIQCPFRTGXKQWUN[VJGUGNGCUGUYGTGENCUUKƂGFCUQRGTCVKPI
NGCUGUWPFGT.-#5
+PHQTOCVKQPCDQWVNGCUGUHQTYJKEJVJG$CPMKUCNGUUGGKURTGUGPVGFKP0QVG
EVQVJGƂPCPEKCNUVCVGOGPVU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
Right-of-Use Assets and Operating Lease Liability

6JG)TQWRWUGUKVULWFIOGPVVQFGVGTOKPGYJGVJGTCPQRGTCVKPINGCUGEQPVTCEVSWCNKƂGUHQTTGEQIPKVKQPQHTKIJVQHWUGCUUGVU6JG
)TQWRCRRNKGULWFIGOGPVKPGXCNWCVKPIYJGVJGTKVKUTGCUQPCDN[EGTVCKPYJGVJGTQTPQVVQGZGTEKUGVJGQRVKQPVQTGPGYQTVGTOKPCVGVJG
NGCUG6JCVKUKVEQPUKFGTUCNNTGNGXCPVHCEVQTUVJCVETGCVGCPGEQPQOKEDGPGƂVHQTKVVQGZGTEKUGGKVJGTVJGTGPGYCNQTVGTOKPCVKQP(WTVJGT
VJG)TQWRECPPQVTGCFKN[FGVGTOKPGVJGKPVGTGUVTCVGKORNKEKVKPVJGNGCUG6JGTGHQTGKVWUGUKVUKPETGOGPVCNDQTTQYKPITCVGVQOGCUWTG
QRGTCVKPINGCUGNKCDKNKV[6JGKPETGOGPVCNDQTTQYKPITCVGKUVJGTCVGQHKPVGTGUVVJCVVJG)TQWRYQWNFJCXGVQRC[VQDQTTQYQXGTCUKOKNCT
VGTOCPFYKVJUKOKNCTUGEWTKV[VJGHWPFUPGEGUUCT[VQQDVCKPCPCUUGVQHCUKOKNCTXCNWGVQVJGTKIJVQHWUGCUUGVKPUKOKNCTGEQPQOKE
environment.
38 (a) Movement in Right-of-use Assets
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Cost
#FFKVKQPUTGPGYCNUQHQRGTCVKPINGCUGUFWTKPIVJG[GCT 908,985 1,205,658
'ZRKTCVKQPQHQRGTCVKPINGCUGCITGGOGPVUFWTKPIVJG[GCT (85,407)
(116,553)

Accumulated amortisation
#OQTVKUCVKQPHQTVJG[GCT=0QVG
D? 865,228 871,892
Depreciation on Disposals - (68,673)

&DUU\LQJYDOXHDVDWVW'HFHPEHU 5,397,734 2,463,788
6JGQRGTCVKPINGCUGNKCDKNKVKGUCTGRTGUGPVGFWPFGT0QVGVQVJGƂPCPEKCNUVCVGOGPVU)KXGPDGNQYKUVJGOQXGOGPVQHVJGQRGTCVKPINGCUG
NKCDKNKV[FWTKPIVJGRGTKQF
FINANCIAL REPORTS
38 RIGHT-OF-USE ASSETS (Contd.)

38 (b) Movement in lease liabilities
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

#FFKVKQPUTGPGYCNQHQRGTCVKPINGCUGCITGGOGPVUFWTKPIVJG[GCT 908,985 1,224,432
#EETGVKQPQHKPVGTGUV=0QVG
D? 859,672 341,159
Payments to lease creditors (1,482,974)
(1,088,399)

'ZRKTCVKQPQHQRGTCVKPINGCUGCITGGOGPVUFWTKPIVJG[GCT (85,407)
(89,670)

Balance as at 31st December (Note 51) 6,453,141 2,817,258
38 (c) Future Minimum Lease Payments under Non-cancellable Operating Leases
Bank
As at 31 December 2022 2021
Rs 000 Rs 000
0DWXULW\DQDO\VLVRIFRQWUDFWXDOXQGLVFRXQWHGFDVK̎RZV
.GUUVJCPQPG[GCT 1,367,561
$GVYGGPQPGCPFƂXG[GCTU 4,489,560
/QTGVJCPƂXG[GCTU 6,320,715
Total undiscounted lease liabilities 12,177,836
38 (d) Sensitivity of Right-of-Use Assets/Lease Liability to Key Assumptions

Sensitivity to Incremental Borrowing Rate
+PETGCUG
FGETGCUGKPKPETGOGPVCNDQTTQYKPITCVGCUCVUV&GEGODGTD[YQWNFJCXG
FGETGCUGFKPETGCUGFVJGNGCUGNKCDKNKV[D[
CRRTQZKOCVGN[4U/PCPF4U/PTGURGEVKXGN[*CFVJG$CPMKPETGCUGF
FGETGCUGFVJGKPETGOGPVCNDQTTQYKPITCVGD[VJG
$CPMoURTQƂVDGHQTGVCZHQTVJG[GCTYQWNFJCXG
FGETGCUGFKPETGCUGFD[CRRTQZKOCVGN[4U/PCPF4U/PTGURGEVKXGN[
H $PRXQWV5HFRJQLVHGLQ3UŘWRUORVV
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
+PVGTGUVGZRGPUGQPQRGTCVKPINGCUGNKCDKNKVKGU 859,672 341,159

#OQTVKUCVKQPQHTKIJVQHWUGCUUGVU 865,228 871,892
1,724,900 1,213,051

38 (f) #OQWPVUTGEQIPKUGFKPUVCVGOGPVQHECUJƃQYUKPTGURGEVQHQRGTCVKPINGCUGNKCDKNKVKGUFWTKPIVJG[GCTGPFGFUV&GEGODGTCOQWPVUVQ
4U/P
4U/P
38 (g) Extension Options

5QOGNGCUGUQHQHƂEGRTGOKUGUEQPVCKPQRVKQPUGZGTEKUCDNGD[VJG)TQWRWRVQQPG[GCTDGHQTGVJGGPFQHVJGPQPECPEGNNCDNGEQPVTCEV
RGTKQF9JGTGRTCEVKECDNGVJG)TQWRUGGMUVQKPENWFGGZVGPUKQPQRVKQPUKPPGYNGCUGUVQRTQXKFGQRGTCVKQPCNƃGZKDKNKV[6JGGZVGPUKQPQRVKQPU
held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably
EGTVCKPVQGZGTEKUGVJGGZVGPUKQPQRVKQPU6JG)TQWRTGCUUGUUGUYJGVJGTKVKUTGCUQPCDN[EGTVCKPVQGZGTEKUGVJGQRVKQPUKHVJGTGKUCUKIPKƂECPV
GXGPVQTCUKIPKƂECPVEJCPIGKPEKTEWOUVCPEGUYKVJKPKVUEQPVTQN
38 (h) Leases as Lessor

6JGFGVCKNUQHOCVWTKV[CPCN[UKUQHƂPCPEGNGCUGTGEGKXCDNGUJCXGDGGPRTQXKFGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
,17$1*,%/($66(76$1'*22':,//b
#%%1706+0)21.+%;
Basis of Recognition
#PKPVCPIKDNGCUUGVKUTGEQIPKUGFKHKVKURTQDCDNGVJCVVJGHWVWTGGEQPQOKEDGPGƂVUVJCVCTGCVVTKDWVCDNGVQVJGCUUGVYKNNƃQYVQVJG)TQWR
CPFVJGEQUVQHVJGCUUGVECPDGOGCUWTGFTGNKCDN[#PKPVCPIKDNGCUUGVKUKPKVKCNN[OGCUWTGFCVEQUV6JGEQUVQHKPVCPIKDNGCUUGVUCESWKTGF
KPCDWUKPGUUEQODKPCVKQPKUVJGHCKTXCNWGCUCVVJGFCVGQHCESWKUKVKQP
D*RRGZLOO
)QQFYKNNVJCVCTKUGUWRQPVJGCESWKUKVKQPQHUWDUKFKCTKGUKUKPENWFGFKPKPVCPIKDNGCUUGVU)QQFYKNNKUOGCUWTGFCVKPKVKCNTGEQIPKVKQPKP
CEEQTFCPEGYKVJ0QVGVQVJGƂPCPEKCNUVCVGOGPVU
Subsequent measurement
)QQFYKNNKUOGCUWTGFCVEQUVNGUUCEEWOWNCVGFKORCKTOGPVNQUUGU+PTGURGEVQHGSWKV[CEEQWPVGFKPXGUVGGUVJGECTT[KPICOQWPVQH
IQQFYKNNKUKPENWFGFKPVJGECTT[KPICOQWPVQHVJGKPXGUVOGPVCPFCPKORCKTOGPVNQUUKPUWEJCPKPXGUVOGPVKUPQVCNNQECVGFVQCP[CUUGV
KPENWFKPIIQQFYKNNVJCVHQTOURCTVQHVJGECTT[KPICOQWPVQHGSWKV[CEEQWPVGFKPXGUVGG
#P[ICKPQPDCTICKPRWTEJCUGKUTGEQIPKUGFKOOGFKCVGN[KPVJGKPEQOGUVCVGOGPV
E6RIWZDUH
#NNEQORWVGTUQHVYCTGEQUVUKPEWTTGFNKEGPUGFHQTWUGD[VJG)TQWRYJKEJCTGPQVKPVGITCNN[TGNCVGFVQCUUQEKCVGFJCTFYCTGYJKEJECP
DGENGCTN[KFGPVKƂGFTGNKCDN[OGCUWTGFCPFKVoURTQDCDNGVJCVVJQUGYKNNNGCFVQHWVWTGGEQPQOKEDGPGƂVUCTGKPENWFGFKPVJGUVCVGOGPV
QHƂPCPEKCNRQUKVKQPWPFGTVJGECVGIQT[pKPVCPIKDNGCUUGVUqCPFCTGECTTKGFCVEQUVNGUUCEEWOWNCVGFCOQTVKUCVKQPCPFCP[CEEWOWNCVGF
impairment losses.
(c) License
6JGCOQWPVVJCVYQWNFDGTGSWKTGFVQQDVCKPCNKEGPUGVQQRGTCVGCTGIKUVGTGFƂPCPEGDWUKPGUUKUTGEQIPKUGFCUNKEGPUGKPVJGƂPCPEKCN
statements.
Subsequent expenditure
'ZRGPFKVWTGKPEWTTGFQPUQHVYCTGKUECRKVCNKUGFQPN[YJGPKVKURTQDCDNGVJCVVJKUGZRGPFKVWTGYKNNGPCDNGVJGCUUGVVQIGPGTCVGHWVWTG
GEQPQOKEDGPGƂVUKPGZEGUUQHKVUQTKIKPCNN[CUUGUUGFUVCPFCTFQHRGTHQTOCPEGCPFVJKUGZRGPFKVWTGECPDGOGCUWTGFCPFCVVTKDWVGFVQ
the asset reliably. All other expenditure is expensed as incurred.
*RRGZLOO
)QQFYKNNKUOGCUWTGFCVEQUVNGUUCEEWOWNCVGFKORCKTOGPVNQUUGU+PTGURGEVQHGSWKV[CEEQWPVGFKPXGUVGGUVJGECTT[KPICOQWPVQH
IQQFYKNNKUKPENWFGFKPVJGECTT[KPICOQWPVQHVJGKPXGUVOGPVCPFCPKORCKTOGPVNQUUKPUWEJCPKPXGUVOGPVKUPQVCNNQECVGFVQCP[CUUGV
KPENWFKPIIQQFYKNNVJCVHQTOURCTVQHVJGECTT[KPICOQWPVQHGSWKV[CEEQWPVGFKPXGUVGG
Amortisation
6JGWUGHWNNKXGUQHKPVCPIKDNGCUUGVUCTGCUUGUUGFCUGKVJGTƂPKVGQTKPƂPKVG
+PVCPIKDNGCUUGVUYKVJƂPKVGNKXGUCTGCOQTVKUGFQPCUVTCKIJVNKPGDCUKUKPVJGKPEQOGUVCVGOGPVHTQOVJGFCVGYJGPVJGCUUGVKUCXCKNCDNG
HQTWUGQXGTVJGDGUVGUVKOCVGQHVJGWUGHWNGEQPQOKENKHGDCUGFQPCRCVVGTPKPYJKEJVJGCUUGVoUGEQPQOKEDGPGƂVUCTGEQPUWOGFD[VJG
$CPM)TQWR
FINANCIAL REPORTS
39 INTANGIBLE ASSETS AND GOODWILL (Contd.)
The estimated amortisation rates are as follows
Computer software
6JQUGCUUGVUCTGCUUGUUGFHQTKORCKTOGPVYJGPGXGTVJGTGKUCPKPFKECVKQPVJCVVJGKPVCPIKDNGCUUGVOC[DGKORCKTGF'ZRGPFKVWTGQP
CPKPVCPIKDNGKVGOVJCVYCUKPKVKCNN[TGEQIPKUGFCUCPGZRGPUGD[VJG)TQWRKPRTGXKQWUCPPWCNƂPCPEKCNUVCVGOGPVUQTKPVGTKOƂPCPEKCN
UVCVGOGPVUCTGPQVTGEQIPKUGFCURCTVQHVJGEQUVQHCPKPVCPIKDNGCUUGVCVCNCVGTFCVG#OQTVKUCVKQPOGVJQFUWUGHWNNKXGUCPFTGUKFWCN
XCNWGUCTGTGXKGYGFCVGCEJTGRQTVKPIFCVGCPFCFLWUVGFKHCRRTQRTKCVG
)QQFYKNNCPFKPVCPIKDNGCUUGVUYKVJKPƂPKVGWUGHWNNKXGUCTGPQVCOQTVKUGFDWVCTGCUUGUUGFHQTKORCKTOGPVCPPWCNN[6JGCUUGUUOGPVQH
KPƂPKVGNKHGKUTGXKGYGFCPPWCNN[VQFGVGTOKPGYJGVJGTVJGKPƂPKVGNKHGEQPVKPWGUVQDGUWRRQTVCDNG
De-recognition
#PKPVCPIKDNGCUUGVKUFGTGEQIPKUGFQPFKURQUCNQTYJGPPQHWVWTGGEQPQOKEDGPGƂVUCTGGZRGEVGFHTQOKVUWUGCPFUWDUGSWGPV
FKURQUCN)CKPUQTNQUUGUCTKUKPIHTQOFGTGEQIPKVKQPQHCPKPVCPIKDNGCUUGVCTGOGCUWTGFCUVJGFKHHGTGPEGDGVYGGPVJGPGVFKURQUCN
RTQEGGFUCPFVJGECTT[KPICOQWPVQHVJGCUUGVCPFCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPV
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
,PSDLUPHQWRI*RRGZLOO
6JG)TQWRGUVKOCVGUVJGXCNWGKPWUGQHVJG%CUJ)GPGTCVKPI7PKVU
%)7VQYJKEJIQQFYKNNJCUDGGPCNNQECVGFKPQTFGTVQFGVGTOKPG
YJGVJGTIQQFYKNNKUKORCKTGF6JGXCNWGKPWUGECNEWNCVKQPTGSWKTGUVJGGPVKV[VQGUVKOCVGVJGHWVWTGECUJƃQYUGZRGEVGFVQCTKUGHTQOVJG
%)7CPFCUWKVCDNGFKUEQWPVTCVGKPQTFGTVQECNEWNCVGRTGUGPVXCNWG
Useful Life Time of Intangible Assets

6JG)TQWRTGXKGYUVJGTGUKFWCNXCNWGUWUGHWNNKXGUCPFOGVJQFUQHFGRTGEKCVKQPQHKPVCPIKDNGCUUGVUCVGCEJTGRQTVKPIFCVG/CPCIGOGPV
GZGTEKUGULWFIGOGPVKPVJGGUVKOCVKQPQHVJGUGXCNWGUTCVGUOGVJQFUCPFJGPEGVJQUGCTGUWDLGEVVQWPEGTVCKPV[
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Cost
)QQFYKNNQPCESWKUKVKQP=0QVG
CK? - -
#FFKVKQPUCPFKORTQXGOGPVUFWTKPIVJG[GCT 229,884 285,513
Accumulated amortisation
#OQTVKUCVKQPHQTVJG[GCT=0QVG
D? 409,274 503,555
&DUU\LQJYDOXHDVDWVW'HFHPEHU 1,250,154 1,771,092

39 (a) Analysis of Intangible Assets
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Computer Software 1,250,154 1,489,966

Goodwill * - 181,126
.KEGPUG - 100,000
1,250,154 1,771,092
)QQFYKNNCOQWPVKPIVQ4U/PJCUDGGPTGEQIPKUGFKPTGURGEVQHCESWKUKVKQPQH*0$(KPCPEG2.%KP(WTVJGTIQQFYKNNCOQWPVKPI
VQ4U/PYCUTGEQIPKUGFFWTKPIVJG[GCTGPFGFUV&GEGODGTKPTGURGEVQHCESWKUKVKQPQH2TKOG(KPCPEG2.%D[*0$(KPCPEG2.%
6JKUIQQFYKNNEQPVKPWGUVQDGTGEQIPKUGFRQUVCOCNICOCVKQPQH*0$(KPCPEG2.%YKVJ2TKOG(KPCPEG2.%
39 (a) i Purchase consideration allocation

6JGCESWKUKVKQPQH2TKOG(KPCPEG2.%JCFVJGHQNNQYKPIGHHGEVQPVJG)TQWRoUCUUGVUCPFNKCDKNKVKGUQPCESWKUKVKQPFCVG
UV&GEGODGT
Recognised
YDOXHVRQ
Acquisition
Rs 000
%CUJCPFECUJGSWKXCNGPVU 822,513
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQEWUVQOGTU 4,655,645
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 302,342
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 56
2TQRGTV[RNCPVCPFGSWKROGPV 16,592
+PVCPIKDNGCUUGVU 948
Deferred tax Assets 731
Other assets 958,147
&WGVQDCPMU (708,805)
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU b
Current tax liabilities (52,220)
Other liabilities (388,326)
+FGPVKƂCDNGCUUGVUCPFNKCDKNKVKGU 2,365,555
0QP%QPVTQNNKPI+PVGTGUV (301,135)
0GVKFGPVKƂCDNGCUUGVUCPFNKCDKNKVKGU 2,064,420
)QQFYKNNQPCESWKUKVKQP 58,185
Consideration paid full in cash 2,122,605
Net cash effect on acquisition of subsidiary through HNB Finance PLC 1,300,092
FINANCIAL REPORTS
39 INTANGIBLE ASSETS AND GOODWILL (Contd.)

39 (a) ii Assessment of Impairment
#UCVUV&GEGODGTVJG$CPMECTTKGFQWVCPKORCKTOGPVCUUGUUOGPVQPVJGIQQFYKNNTGEQIPKUGFQPCESWKUKVKQPQH*0$(KPCPEG2.%
6JGTGEQXGTCDNGXCNWGQHVJGIQQFYKNNJCUDGGPFGVGTOKPGFDCUGFQPVJGTGUKFWCNKPEQOGOGVJQF
Key assumptions used in residual income calculation

3UR̍W*URZWK
2TQƂVITQYVJYCURTQLGEVGFDCUGFQPVJGHQTGECUVIKXGPKPVJGUVTCVGIKERNCPQHVJGEQORCP[$WFIGVGF2TQƂVDGHQTGVCZGUFGRTGEKCVKQPCPF
COQTVK\CVKQPYCUDCUGFQPGZRGEVCVKQPQHHWVWTGQWVEQOGUVCMKPIKPVQRCUVGZRGTKGPEGCFLWUVGFHQTCPVKEKRCVGFGEQPQOKEEQPFKVKQPU
Discount factor
6JGFKUEQWPVTCVGQHWUGFKUDCUGFQPVJGTKUMHTGGTCVGCFLWUVGFHQTVGORQTCT[ƃWEVWCVKQPUKPKPVGTGUVTCVGU
,Q̎DWLRQ
6JGDCUKUWUGFVQFGVGTOKPGVJGXCNWGCUUKIPGFVQVJGDWFIGVGFEQUVKPƃCVKQPKUVJGKPƃCVKQPTCVGDCUGFQPRTQLGEVGFGEQPQOKEEQPFKVKQPU
6JG$QCTFQH&KTGEVQTUJCUCUUGUUGFVJGRQVGPVKCNKORCKTOGPVNQUUQHQVJGTKPVCPIKDNGCUUGVUCUCV&GEGODGT$CUGFQPVJG
CUUGUUOGPVPQKORCKTOGPVRTQXKUKQPKUTGSWKTGFVQDGOCFGKPVJGƂPCPEKCNUVCVGOGPVUCUCVVJGTGRQTVKPIFCVG
39 (a) iii Title Restriction on Intangible Assets

6JGTGCTGPQTGUVTKEVKQPUQPVJGVKVNGQHVJGKPVCPIKDNGCUUGVUQHVJG)TQWRCUCVVJGTGRQTVKPIFCVG
39 (a) iv Intangible Assets pledged as Security

0QPGQHVJGKPVCPIKDNGCUUGVUJCXGDGGPRNGFIGFCUUGEWTKV[CUCVVJGTGRQTVKPIFCVG
Î>®Û čVµÕÃÌvÌ>}LičÃÃiÌÃÕÀ}Ìi9i>À

&WTKPIVJGƂPCPEKCN[GCTVJG$CPMCPF)TQWRCESWKTGFKPVCPIKDNGCUUGVUVQVJGCIITGICVGXCNWGQH4U/PCPF4U/PTGURGEVKXGN[

4U/PCPF4U/PTGURGEVKXGN[%CUJRC[OGPVUCOQWPVKPIVQ4U/PCPF4U/PTGURGEVKXGN[
4U/PCPF
4U/PYGTGOCFGHQTRWTEJCUGQHKPVCPIKDNGCUUGVUD[VJG$CPMCPF)TQWRTGURGEVKXGN[FWTKPIVJG[GCT
39 (a) vi Fully Amortised Intangible Assets in Use

+PVCPIKDNGCUUGVUKPENWFGHWNN[COQTVKUGFEQORWVGTUQHVYCTGCOQWPVKPI4U$P
4U$PYJKEJCTGKPWUGKPVJGPQTOCNDWUKPGUU
activities of the Group.

'()(55('7$;$66(76$1'/,$%,/,7,(6 b bbb b
#%%1706+0)21.+%;
6JGRQNKE[CFQRVGFKPCEEQWPVKPIHQTFGHGTTGFVCZKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
Deferred Tax Assets

&GHGTTGFVCZCUUGVUCTGTGEQIPKUGFKPTGURGEVQHNQCPKORCKTOGPVCNNQYCPEGUYJKEJYKNNDGTGEQXGTGFKPVJGHQTGUGGCDNGHWVWTGCPFQP
VCZNQUUGUVQVJGGZVGPVVJCVKVKURTQDCDNGVJCVHWVWTGVCZCDNGRTQƂVYKNNDGCXCKNCDNGCICKPUVYJKEJVJGNQUUGUECPDGWVKNKUGF,WFIGOGPV
KUTGSWKTGFVQFGVGTOKPGVJGCOQWPVQHFGHGTTGFVCZCUUGVUVJCVECPDGTGEQIPKUGFDCUGFQPVJGNKMGN[VKOKPICPFNGXGNQHHWVWTGVCZCDNG
RTQƂVUVQIGVJGTYKVJHWVWTGVCZRNCPPKPIUVTCVGIKGU
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
0GVFGHGTTGFVCZNKCDKNKVKGU=0QVG
C? - 6,465,029
0GVFGHGTTGFVCZCUUGVU=0QVG
D? 30,471,351 30,763,166
30,471,351 24,298,137

40 (a) Net Deferred Tax Liabilities
Bank Group
2022 2021 2022 2021
Tax Effect Tax Effect Tax Effect Tax Effect
Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January 5,612,197 11,241,706

5HFRJQLVHGLQSUR̍WRUORVV
1TKIKPCVKPIFWTKPIVJG[GCT
4GEQIPKUGF
TGCNKUGFKPVJGKPEQOGUVCVGOGPV (425,790)
(178,642)

'HHGEVQHEJCPIGKPVCZTCVG 362,723
261,026

(63,067)
82,384

Recognised in OCI
1TKIKPCVKPIFWTKPIVJG[GCT
4GEQIPKUGF
TGCNKUGFKPVJGKPEQOGUVCVGOGPV 466,439
442,517

'HHGEVQHEJCPIGKPVCZTCVG 1,157,240 2,379,326
1HHUGVCICKPUVFGHGTTGFVCZCUUGVU (7,172,809)
(7,680,904)

Net deferred tax liabilities (Note 40) - 6,465,029
FINANCIAL REPORTS
40 DEFERRED TAX ASSETS AND LIABILITIES (Contd.)

40 (b) Net Deferred Tax Assets
Bank Group
2022 2021 2022 2021
Tax Effect Tax Effect Tax Effect Tax Effect
Rs 000 Rs 000 Rs 000 Rs 000

Originating during the year
4GEQIPKUGF
TGCNKUGFKPVJGKPEQOGUVCVGOGPV 25,051,962 25,018,563
Effect of change in tax rate 2,518,440
2,373,210

27,570,402 27,391,773
4GEQIPKUGFKP1%+ - 27,464

%DODQFHDVDWVW'HFHPEHUb 37,644,160 38,444,070
1HHUGVCICKPUVFGHGTTGFVCZNKCDKNKVKGU (7,172,809)
(7,680,904)

Net deferred tax assets (Note 40) 30,471,351 30,763,166
40 (c) Recognised Deferred Tax Assets and Liabilities

40 (c) i Recognised Deferred Tax Assets/(Liabilities) - Bank
Temporary 6WDWHPHQWRIb Temporary 6WDWHPHQWRIb 6WDWHPHQWRIb Other

Difference Financial Difference Financial 3UR̍WRU/RVV &RPSUHKHQVLYH
Position Position For the year ended Income
As at 31st As at 31st 31st December For the year ended
31st December
December December
2022 2022 bb bb 2022 bb 2022 bb
Accelerated depreciation for tax

purposes
2TQRGTV[RNCPVCPFGSWKROGPV (2,159,283) (647,785)

(115,118)
-
+PVCPIKDNGCUUGVU (369,007) (110,702)

10,962 -
#UUGVUQPNGCUKPIDWUKPGUU (2,097,790) (629,337)

167,223
-
4GXCNWCVKQPQHIQXGTPOGPVUGEWTKVKGU - - - (466,439)

Revaluation surplus on freehold lands (15,780,037) (4,734,011)

- (946,802)
4GXCNWCVKQPUWTRNWUQPHTGGJQNFDWKNFKPIU (3,507,297) (1,052,189)

- (210,438)
(23,913,414) (7,174,024)

63,067
(1,623,679)

1RGTCVKPINGCUGTKIJVU 1,059,447 317,834 121,386 -
Temporary difference on allowance
for impairment 124,425,137 37,327,541 27,449,016
-
125,484,584 37,645,375 27,570,402
-
101,571,170 30,471,351 27,633,469
(1,623,679)


40 (c) ii Recognised Deferred Tax Assets/(Liabilities) - Group
Temporary 6WDWHPHQWRIb Temporary 6WDWHPHQWRIb 6WDWHPHQWRIb Other

Difference Financial Difference Financial 3UR̍WRU/RVV &RPSUHKHQVLYH
Position Position For the year ended Income
As at 31st As at 31st 31st December For the year ended
31st December
December December
2022 2022 bb bb 2022 bb 2022 bb
Accelerated depreciation for tax purposes

2TQRGTV[RNCPVCPFGSWKROGPV (3,745,253) (1,123,576)

(405,048)
-
+PVCPIKDNGCUUGVU (369,127) (110,738)

10,926 -
#UUGVUQPNGCUKPIDWUKPGUU (2,097,790) (629,337)

225,786
-
4GXCNWCVKQPQHIQXGTPOGPVUGEWTKVKGU - - - (467,702)

Revaluation surplus on freehold lands (29,771,170) (8,931,351)

- (2,206,176)
4GXCNWCVKQPUWTRNWUQPHTGGJQNFDWKNFKPIU (10,374,753) (3,112,426)

- (176,566)
7PFKUVTKDWVGFRTQƂVUQHUWDUKFKCTKGUCPF
joint ventures (981,087) (294,326)

(66,695)
-
(47,339,180) (14,201,754)

(235,031)
(2,850,444)
7PWVKNKUGFVCZNQUUGU - - (273,543) -
1RGTCVKPINGCUGTKIJVU 1,042,483 312,745 139,736 -
Temporary difference on allowance for
KORCKTOGPVCPFTGVKTGOGPVDGPGƂVU 127,290,487 38,187,146 27,678,227
20,257
128,332,970 38,499,891 27,544,420
20,257
80,993,790 24,298,137

27,309,389
(2,830,187)
40 (d) Tax losses - Subsidiaries

HNB Assurance PLC “Company”
#URGT5GEVKQPQH+PNCPF4GXGPWG#EV0QQHYJKEJYCUGHHGEVKXGHTQOUV#RTKNVJGEQORCP[KPEWTTGFCVCZCDNGKPEQOG6JG
#EVCNNQYUVQFGFWEVQHVCZCDNGKPEQOGCICKPUVVJGVCZNQUUGUKPEWTTGFYJGTGCUKPVJGRTGXKQWU+PNCPF4GXGPWG#EV0QQHKVYCU
NKOKVGFVQQHVJGVQVCNUVCVWVQT[KPEQOG#UCVUV&GEGODGT.KHG+PUWTCPEGDWUKPGUUJCFCEWOWNCVKXGVCZNQUUQH4U/P

4U/PTGEQIPKUGFCURGT5GEVKQP+PNCPF4GXGPWG#EV0QQH#EEQTFKPIVQVJGVTCPUKVKQPCNRTQXKUKQPUQHVJG#EV
DTQWIJVHQTYCTFVCZNQUUGUECPDGENCKOGFCICKPUVVCZCDNGKPEQOGHQTCRGTKQFQH[GCTUYKVJGHHGEVHTQOUV#RTKN6JGEQORCP[OCFG
CPCUUGUUOGPVQHHWVWTGVCZCDNGRTQƂVUCPFKFGPVKƂGFVJCVVQVCNVCZNQUUGUECPDGENCKOGFYKVJKPVJGRGTKQFURGEKƂGFKPVJGVTCPUKVKQPCN
RTQXKUKQPU#UCVUV&GEGODGTEQORCP[JCUWVKNKUGFVJGVQVCNCOQWPVQHDTQWIJVHQTYCTFVCZNQUUGUCICKPUVVCZCDNGKPEQOGCPFVJGTG
CTGPQVCZNQUUGUQTFGHGTTGFVCZCUUGVUTGEQTFGFCUCVVJGTGRQTVKPIFCVG(WTVJGTEQORCP[JCUTGEQIPKUGFCPKPEQOGVCZGZRGPUGHQTVJG
[GCTUKPEGDTQWIJVHQTYCTFVCZNQUUGUJCXGDGGPHWNN[WVKNKUGF
6JG)TQWRFQGUPQVJCXGWPTGEQIPKUGFFGHGTTGFVCZCUUGVUQPVCZNQUUGUCUCVVJGTGRQTVKPIFCVG
FINANCIAL REPORTS
40 DEFERRED TAX ASSETS AND LIABILITIES (Contd.)

40 (e) New Amendments to Income Tax Law Announced by the Government
#URTQXKFGFHQTKP.-#5+PEQOGVCZGUFGHGTTGFVCZCUUGVUCPFNKCDKNKVKGUUJQWNFDGOGCUWTGFCVVJGVCZTCVGUVJCVCTGGZRGEVGFVQDG
CRRNKGFKPVJGRGTKQFKPYJKEJVJGCUUGVYKNNDGTGCNKUGFQTVJGNKCDKNKV[YKNNDGUGVVNGFDCUGFQPVJGVCZTCVG
CPFVCZNCYUVJCVJCXGDGGP
GPCEVGFQTUWDUVCPVKXGN[GPCEVGFD[VJGTGRQTVKPIFCVG
#URGTVJG+PNCPF4GXGPWG
#OGPFOGPV#EV0QQH
EGTVKƂGFQPVJ&GEGODGTKPEQOGVCZTCVGUCRRNKECDNGVQVJG$CPMCPF
VJGUWDUKFKCTKGUKPETGCUGFHTQOVQYKVJGHHGEVHTQOUV1EVQDGT#EEQTFKPIN[FGHGTTGFVCZJCUDGGPEQORWVGFCVD[$CPM
Group.
27+(5$66(76 b bbb b
#%%1706+0)21.+%;
6JGƂPCPEKCNCUUGVUKPENWFGFKPQVJGTCUUGVUJCXGDGGPCEEQWPVGFHQTDCUGFQPVJGCEEQWPVKPIRQNKE[FKUEWUUGFKP0QVGVQVJG
ƂPCPEKCNUVCVGOGPVU
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
7PCOQTVKUGFEQUVQPUVCHHNQCPU 10,907,185 11,003,181

Other debtors 1,815,034 5,835,577
4GKODWTUGOGPVWPFGTURGEKCNUGPKQTEKVK\GPFGRQUKVUEJGOG 6,764,470 6,764,470
Receivable from pension fund 3,479,578 3,479,578
+PXGPVQTKGU4GCN'UVCVG5VQEM -
Deposits and prepayments 3,293,958 3,486,051
Stationary and other consumables 129,548 129,548
#NNQYCPEGHQTKORCKTOGPV=0QVG
C? (108,655)
(125,033)

26,281,118 30,573,372
#UCVUV&GEGODGTQVJGTCUUGVUKPENWFGU4U/P
4U/PƂPCPEKCNCUUGVUKPVJG$CPMCPF4U/P

4U/PKPVJG)TQWR
41 (a) Movement in Impairment Allowance
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

0GVKORCKTOGPVEJCTIG
TGXGTUCNHQTVJG[GCT - -
$VDWVW'HFHPEHUb 108,655 125,033
+ORCKTOGPVRTQXKUKQPQH4U/PKPVJG$CPMCPF4U/PKPVJG)TQWRJCUDGGPTGEQIPKUGFKPTGURGEVQHPQPƂPCPEKCNCUUGVUCUCVUV
&GEGODGT
4U/PKP$CPMCPF4U/PKP)TQWR

41 (b) Credit and Market Risk
'8(72%$1.6b b bbb b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQFWGVQDCPMUJCUDGGPIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
&WGVQDCPMUTGRTGUGPVUTGƂPCPEGDQTTQYKPIUECNNCPFVKOGFGRQUKVUCPFDQTTQYKPIUHTQODCPMU5WDUGSWGPVVQKPKVKCNTGEQIPKVKQP
VJGUGCTGOGCUWTGFCVVJGKTCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4OGVJQF#OQTVKUGFEQUVKUECNEWNCVGFD[VCMKPIKPVQ
CEEQWPVCP[FKUEQWPVQTRTGOKWOQPVJGKUUWGCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JG'+4COQTVKUCVKQPKUKPENWFGFKPpKPVGTGUV
GZRGPUGUqKPVJG+PEQOG5VCVGOGPV)CKPUCPFNQUUGUCTGTGEQIPKUGFKPVJG+PEQOG5VCVGOGPVYJGPVJGNKCDKNKVKGUCTGFGTGEQIPKUGF
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
.QECNDCPMDQTTQYKPIU - -

(QTGKIPDCPMDQTTQYKPIU 2,298,113 2,298,113
4GƂPCPEGDQTTQYKPIU 1,868,875 1,868,875
Other balances 1,937,590 1,937,590
6,104,578 6,104,578
6JGOCVWTKV[CPCN[UKUQHFWGVQDCPMUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
42 (b) Credit and Market Risk

+PHQTOCVKQPCDQWVVJG)TQWRoUETGFKVCPFOCTMGVTKUMUHQTFWGVQDCPMUCTGKPENWFGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
6(&85,7,(662/'81'(55(385&+$6($*5((0(176b b bbb b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQUGEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVUJCUDGGPIKXGPKP0QVGVQVJGƂPCPEKCN
statements.
5GEWTKVKGUUQNFWPFGTCITGGOGPVUVQTGRWTEJCUGCVCURGEKƂGFHWVWTGFCVGCTGPQVFGTGEQIPKUGFHTQOVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP
CUVJG)TQWRTGVCKPUUWDUVCPVKCNN[CNNQHVJGTKUMUCPFTGYCTFUQHQYPGTUJKR6JGEQTTGURQPFKPIECUJTGEGKXGFKUTGEQIPKUGFKPVJG
UVCVGOGPVQHƂPCPEKCNRQUKVKQPCUCPCUUGVCPFCEQTTGURQPFKPIQDNKICVKQPVQTGVWTPKVYKVJCEETWGFKPVGTGUVCUnoUGEWTKVKGUUQNFWPFGT
TGRWTEJCUGCITGGOGPVUooTGƃGEVKPIVJGVTCPUCEVKQPoUGEQPQOKEUWDUVCPEGCUCNQCPVQVJG)TQWR6JGFKHHGTGPEGDGVYGGPVJGUCNGCPF
TGRWTEJCUGRTKEGKUVTGCVGFCUKPVGTGUVGZRGPUGCPFKUCEETWGFQXGTVJGNKHGQHVJGCITGGOGPVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
9KVJDCPMU - -
9KVJEWUVQOGTU 6,540,014 6,540,014
6,540,014 6,540,014
FINANCIAL REPORTS
),1$1&,$//,$%,/,7,(60($685('$7$0257,6('&267'8(72'(326,7256b b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQƂPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTUJCUDGGPIKXGPKP0QVGVQVJG
ƂPCPEKCNUVCVGOGPVU
&WGVQFGRQUKVQTUKPENWFGPQPKPVGTGUVDGCTKPIFGRQUKVUUCXKPIUFGRQUKVUVGTOFGRQUKVUFGRQUKVURC[CDNGCVECNNEGTVKƂECVGQHFGRQUKVU
CPFOCTIKPFGRQUKVU5WDUGSWGPVVQKPKVKCNTGEQIPKVKQPFGRQUKVUCTGOGCUWTGFCVVJGKTCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG

'+4OGVJQFGZEGRVYJGTGVJG)TQWRFGUKIPCVGUNKCDKNKVKGUCUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU#OQTVKUGFEQUVKUECNEWNCVGF
D[VCMKPIKPVQCEEQWPVCP[FKUEQWPVQTRTGOKWOQPVJGKUUWGCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JG'+4COQTVKUCVKQPKU
KPENWFGFKPpKPVGTGUVGZRGPUGUqKPVJGKPEQOGUVCVGOGPV)CKPUCPFNQUUGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVYJGPVJGNKCDKNKVKGU
CTGFGTGEQIPKUGF)TQWRJCUPQVFGUKIPCVGFCP[NKCDKNKVKGUCVHCKTXCNWGVJTQWIJRTQƂVQTNQUUCUCVVJGTGRQTVKPIFCVG
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
.QECNEWTTGPE[FGRQUKVU 1,038,635,870 1,074,681,115
(QTGKIPEWTTGPE[FGRQUKVU 369,164,622 368,498,006
1,407,800,492 1,443,179,121
Analysis of Due to Customers

44 (a) i By Product
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Current account deposits 79,901,172 79,530,635
5CXKPIUFGRQUKVU 356,052,620 358,670,096
Time deposits 968,669,141 1,001,800,831
%GTVKƂECVGUQHFGRQUKV 305,891 305,891
/CTIKPFGRQUKVU 2,871,668 2,871,668
1,407,800,492 1,443,179,121
Analysis of deposits- Bank
1% 6% 1% 7%
1% 1%
2022 24% 2021

33%
68% 58%
Current accounts Certificates of deposit

Savings deposits Margin deposits
Time deposits

44 (a) ii By Currency
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
5TK.CPMCP4WRGGU 1,038,635,871 1,074,681,115

7PKVGF5VCVGU&QNNCTU 323,462,965 322,799,153
)TGCV$TKVCKP2QWPFU 17,451,026 17,451,026
Euros 13,536,909 13,534,105
Australian Dollars 11,607,107 11,607,107
Other currencies 3,106,614 3,106,615
1,407,800,492 1,443,179,121
6JGOCVWTKV[CPCN[UKUQHFWGVQFGRQUKVQTUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
45 DIVIDENDS PAYABLE
&GVCKNUQHFKXKFGPFUFGENCTGFHQTVJG[GCTCHVGTVJGTGRQTVKPIFCVGCTGFKUENQUGFKP0QVG
CVQVJGƂPCPEKCNUVCVGOGPVUCUCPGXGPVCHVGTVJG
TGRQTVKPIRGTKQFKPCEEQTFCPEGYKVJVJG5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp'XGPVUCHVGTVJGTGRQTVKPIRGTKQFq
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

Final cash dividends declared in the prior year 3,418,380 3,616,180
6TCPUHGTVQTGVCKPGFGCTPKPI - -
&KXKFGPFURCKFFWTKPIVJG[GCT (3,399,267)
(3,591,267)

46 FINANCIAL LIABILITIES AT AMORTISED COST - OTHER BORROWINGS
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQƂPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVQVJGTDQTTQYKPIUJCUDGGPIKXGPKP0QVGVQVJGƂPCPEKCN
statements.
1VJGTDQTTQYKPIUTGRTGUGPVTGƂPCPEGDQTTQYKPIUCPFDQTTQYKPIUHTQOQVJGTƂPCPEKCNKPUVKVWVKQPU5WDUGSWGPVVQKPKVKCNTGEQIPKVKQP
VJGUGDQTTQYKPIUCTGOGCUWTGFCVVJGKTCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4OGVJQF#OQTVKUGFEQUVKUECNEWNCVGFD[
VCMKPIKPVQCEEQWPVCP[FKUEQWPVQTRTGOKWOQPVJGKUUWGCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JG'+4COQTVKUCVKQPKUKPENWFGF
KPpKPVGTGUVGZRGPUGUqKPVJGKPEQOGUVCVGOGPV)CKPUCPFNQUUGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVYJGPVJGNKCDKNKVKGUCTGFG
TGEQIPKUGF
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
4GƂPCPEGDQTTQYKPIU 8,080,861 8,080,861

(QTGKIPDQTTQYKPIU 24,269,733 24,269,733
.QECNDQTTQYKPIU - 1,035,004
32,350,594 33,385,598
6JGOCVWTKV[CPCN[UKUQHƂPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVsQVJGTDQTTQYKPIUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
FINANCIAL REPORTS
'(%76(&85,7,(6,668('b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQFGDVUGEWTKVKGUKUUWGFJCUDGGPIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
&GDVUGEWTKVKGUKUUWGFTGRTGUGPVHWPFUDQTTQYGFHQTNQPIVGTOHWPFKPIRWTRQUGU5WDUGSWGPVVQKPKVKCNTGEQIPKVKQPFGDVUGEWTKVKGUCTG
OGCUWTGFCVVJGKTCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4OGVJQF#OQTVKUGFEQUVKUECNEWNCVGFD[VCMKPIKPVQCEEQWPVCP[
FKUEQWPVQTRTGOKWOQPVJGKUUWGCPFEQUVUVJCVCTGCPKPVGITCNRCTVQHVJG'+46JG'+4COQTVKUCVKQPKUKPENWFGFKPpKPVGTGUVGZRGPUGUqKP
VJGKPEQOGUVCVGOGPV)CKPUCPFNQUUGUCTGTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVYJGPVJGNKCDKNKVKGUCTGFGTGEQIPKUGF
Bank Group
Year of Colombo Interest Face Fixed / Interest Interest Repayment Issue Date Maturity Date As at As at As at As at
issuance Stock Payment Value ̎RDWLQJ rate rate of Terms 31.12.2022 31.12.2021 31.12.2022 31.12.2021
Exchange Frequency interest comparable
Listing rate JRYHUQPHQW
securities
(Gross) (p.a)
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
.KUVGF Annually Fixed 10 Years VJ#WI VJ#WI 1,978,910 1,951,606
.KUVGF Semi Fixed 10 Years 15th Dec 2014 15th Dec 2024 84,040 63,201
Annually
0QV.KUVGF Monthly Fixed 1 Year 1 Year 20 Years 01st Apr 2011 31st Mar 2040 - 540,302
#XGTCIG #XGTCIG
6DKNN 6DKNN
rate rate
Total debt securities
issued 2,062,950 2,555,109
Analysis of total
debt securities issued
Due within one year 1,978,910 2,014,630
Due after one year 84,040 540,479
2,062,950 2,555,109
*0$#UUWTCPEG2.%UWDUKFKCT[QHVJG$CPMJCUKPXGUVGF4U/P
4U/PKPFGDVUGEWTKVKGUKUUWGFD[VJG$CPM
&GDVUGEWTKVKGUKUUWGFD[*0$(KPCPEG2.%%CRKVCNTGRC[OGPVEQOOGPEGFHTQO&GEGODGT
6JGTGYGTGPQFGDVUGEWTKVKGUFGUKIPCVGFCV(862.CUCVUV&GEGODGT
6JG)TQWRFKFPQVJCXGCP[FGHCWNVUQHRTKPEKRCNCPFKPVGTGUVQTQVJGTDTGCEJGUYKVJTGURGEVVQKVUFGDVUGEWTKVKGUFWTKPIVJG[GCTGPFGFUV
December 2022.
48 CURRENT TAX LIABILITIES
#%%1706+0)21.+%;
6JGRQNKE[CFQRVGFKPCEEQWPVKPIHQTEWTTGPVVCZNKCDKNKVKGUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Provision for the year 26,627,382 26,968,465
'HHGEVQHEJCPIGUKPVCZTCVG=0QVG
D
KKK? -
-

Over provision in previous years (1,053,500)
(987,055)

2C[OGPVUFWTKPIVJG[GCT (5,599,652)
(6,026,123)

Notional tax credits - (13,341)
9KVJJQNFKPIVCZQVJGTETGFKVU -
(273)


48 (a) Surcharge Tax
#URGTVJG5WTEJCTIG6CZ#EV0QQHVJG$CPMRCKFUWTEJCTIGVCZQH4U/PQWVQHVJGVCZCDNGKPEQOGQH4U/P
RGTVCKPKPIVQVJG[GCTQHCUUGUUOGPV(WTVJGTVJG)TQWRRCKF4U/PCUUWTEJCTIGVCZ#EEQTFKPIVQVJGUCKF#EVVJGUWTEJCTIG
VCZUJCNNDGFGGOGFVQDGCPGZRGPFKVWTGKPVJGƂPCPEKCNUVCVGOGPVUTGNCVKPIVQVJG[GCTQHCUUGUUOGPV5KPEGVJG#EVUWRGTUGFGU
VJGTGSWKTGOGPVUQHVJG5TK.CPMC#EEQWPVKPI5VCPFCTFUVJGUWTEJCTIGVCZGZRGPUGJCUDGGPCEEQWPVGFCUTGEQOOGPFGFD[VJG5Q#6QP
#EEQWPVKPIHQT5WTEJCTIG6CZKUUWGFD[VJG+PUVKVWVGQH%JCTVGTGF#EEQWPVCPVUQH5TK.CPMC#EEQTFKPIN[VJG$CPMJCUTGEQIPKUGFVJGVQVCN
NKCDKNKV[VQVJGUWTEJCTIGVCZCUCPCFLWUVOGPVVQVJGQRGPKPITGVCKPGFGCTPKPIUCUCVUV,CPWCT[
6JGKORCEVQHVJGUWTEJCTIGVCZWPFGTVJG5WTEJCTIG6CZ#EVQPVJGEQORCTCVKXG[GCTYQWNFJCXGDGGPCUIKXGPDGNQY
Bank Group
Rs 000 Rs 000
2TQƂVCHVGT6CZHQTVJG[GCTGPFGFUV&GEGODGT 11,462,636 13,662,263

5WTEJCTIGVCZNGXKGFWPFGT5WTEJCTIG#EV 3,611,567 3,981,895
%QORCTCDNG2TQƂVHQTVJG[GCT 7,851,069 9,680,368
,1685$1&(3529,6,21/,)(b
6JGKPUWTCPEGRTQXKUKQPNKHGTGRTGUGPVUVJGNKHGHWPFQHVJGUWDUKFKCT[*0$#UUWTCPEG2.%YJKEJKUECTT[KPIQWVNKHGKPUWTCPEGDWUKPGUU
#%%1706+0)21.+%;
,QVXUDQFH3URYLVLRQ/LIH,QVXUDQFH
.KHGKPUWTCPEGNKCDKNKVKGUCTGTGEQIPKUGFYJGPEQPVTCEVUCTGGPVGTGFKPVQCPFRTGOKWOUCTGEJCTIGF6JGUGNKCDKNKVKGUCTGOGCUWTGF
D[WUKPICRTQURGEVKXGCEVWCTKCNXCNWCVKQPOGVJQF6JGNKCDKNKV[KUFGVGTOKPGFCUVJGUWOQHVJGRTGUGPVXCNWGQHHWVWTGDGPGƂVUVJG
GZRGEVGFHWVWTGOCPCIGOGPVCPFFKUVTKDWVKQPGZRGPUGUNGUUVJGRTGUGPVXCNWGQHHWVWTGITQUURTGOKWOUCTKUKPIHTQOVJGRQNKE[
FKUEQWPVGFCVVJGCRRTQRTKCVGFKUEQWPVTCVGCUURGEKƂGFD[VJG+PUWTCPEG4GIWNCVQT[%QOOKUUKQPQH5TK.CPMC6JGNKCDKNKV[KUDCUGFQP
DGUVGUVKOCVGCUUWORVKQPUCPFYKVJFWGTGICTFVQUKIPKƂECPVTGEGPVGZRGTKGPEG#PCRRTQRTKCVGCNNQYCPEGHQTRTQXKUKQPQHTKUMOCTIKPHQT
adverse deviation from expected experience is included in the valuation.
Liability Adequacy Test (LAT)
#UTGSWKTGFD[5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45p+PUWTCPEG%QPVTCEVUqVJGGPVKV[RGTHQTOGFC.KCDKNKV[#FGSWCE[6GUV
.#6
KPTGURGEVQHNKHGKPUWTCPEGEQPVTCEVNKCDKNKVKGUYKVJVJGCUUKUVCPEGQHCPGZVGTPCNCEVWCT[+PRGTHQTOKPIVJG.#6EWTTGPVDGUVGUVKOCVGU
QHHWVWTGEQPVTCEVWCNECUJƃQYUKPENWFKPITGNCVGFECUJƃQYUUWEJCUENCKOUJCPFNKPICPFRQNKE[CFOKPKUVTCVKQPGZRGPUGURQNKE[JQNFGT
QRVKQPUCPFIWCTCPVGGUCUYGNNCUKPXGUVOGPVKPEQOGHTQOCUUGVUDCEMKPIUWEJNKCDKNKVKGUCTGWUGF0WODGTQHXCNWCVKQPVGEJPKSWGUCTG
CRRNKGFKPENWFKPIFKUEQWPVKPIECUJƃQYKPVGTGUVTCVGCRRNKGFKUDCUGFQPVJGOCPCIGOGPVoUGZRGEVCVKQPQHEWTTGPVOCTMGVKPVGTGUVTCVGU
6JGNKCDKNKV[XCNWGKUCFLWUVGFVQVJGGZVGPVVJCVKVKUUWHƂEKGPVVQOGGVHWVWTGDGPGƂVUCPFGZRGPUGU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
Valuation of Life Insurance Contract Liabilities of Subsidiary, HNB Assurance PLC (HNBA)
6JGNKCDKNKV[HQTNKHGKPUWTCPEGEQPVTCEVUYKVJ&KUETGVKQPCT[2CTVKEKRCVKQP(GCVWTGU
&2(KUGKVJGTDCUGFQPEWTTGPVCUUWORVKQPUQTQP
CUUWORVKQPUGUVCDNKUJGFCVVJGKPEGRVKQPQHVJGEQPVTCEVTGƃGEVKPIVJGDGUVGUVKOCVGCVVJGVKOGKPETGCUGFYKVJCOCTIKPHQTTKUMCPF
CFXGTUGFGXKCVKQP#NNEQPVTCEVUCTGUWDLGEVVQCNKCDKNKV[CFGSWCE[VGUVYJKEJTGƃGEVOCPCIGOGPVoUDGUVEWTTGPVGUVKOCVGQHHWVWTGECUJ
ƃQYU
6JGOCKPCUUWORVKQPUWUGFTGNCVGVQOQTVCNKV[OQTDKFKV[NQPIGXKV[KPXGUVOGPVTGVWTPUGZRGPUGUNCRUGCPFUWTTGPFGTTCVGUCPFFKUEQWPV
TCVGU(QTVJQUGEQPVTCEVUVJCVKPUWTGTKUMTGNCVGFVQNQPIGXKV[RTWFGPVCNNQYCPEGKUOCFGHQTGZRGEVGFHWVWTGOQTVCNKV[KORTQXGOGPVUCU
YGNNCUYKFGTCPIKPIEJCPIGUVQNKHGUV[NGYJKEJEQWNFTGUWNVKPUKIPKƂECPVEJCPIGUVQVJGGZRGEVGFHWVWTGOQTVCNKV[GZRQUWTG
'UVKOCVGUCTGCNUQOCFGCUVQHWVWTGKPXGUVOGPVKPEQOGCTKUKPIHTQOVJGCUUGVUDCEMKPIVJGNKHGKPUWTCPEGEQPVTCEVU6JGUGGUVKOCVGU
CTGDCUGFQPEWTTGPVOCTMGVTGVWTPUCUYGNNCUGZRGEVCVKQPUCDQWVHWVWTGGEQPQOKECPFƂPCPEKCNFGXGNQROGPVU#UUWORVKQPUQPHWVWTG
GZRGPUGUCTGDCUGFQPEWTTGPVGZRGPUGNGXGNUCFLWUVGFHQTGZRGEVGFGZRGPUGKPƃCVKQPKHCRRTQRTKCVG
.CRUGCPFUWTTGPFGTTCVGUCTGDCUGFQPVJG)TQWRoUJKUVQTKECNGZRGTKGPEGQHNCRUGUCPFUWTTGPFGTU&KUEQWPVTCVGUCTGDCUGFQPEWTTGPV
KPFWUVT[TKUMTCVGUHQTVJGPQPRCTVKEKRCVKPIRTQFWEVUYJGTGCUKVKUVJGGZRGEVGFHWPF[KGNFQHRCTHWPFHQTVJGRQNKEKGUYKVJFKUETGVKQPCT[
RCTVKEKRCVKPIDGPGƂV
FINANCIAL REPORTS
49 INSURANCE PROVISION - LIFE (Contd.)
Group
Rs 000 Rs 000
Insurance Contract Liabilities
.KHG+PUWTCPEG(WPF=0QVG
C? 24,373,392
%NCKOU1WVUVCPFKPI 219,011
Total Insurance Contract Liabilities - Life Insurance 24,592,403
49 (a) Life Insurance Fund
Group
2022 2021
Rs 000 Rs 000
%DODQFHDVDWVW-DQXDU\b 20,097,793
5WTEJCTIGVCZ (21,966)
Adjusted balance as at 1st January 2021 20,075,827
%JCPIGKPEQPVTCEVNKCDKNKVKGUNKHGHWPF
Increase in life insurance fund before surplus distribution to shareholders 5,594,607
Surplus distributed to shareholders (1,280,000)

Increase in life insurance fund 4,314,607
'HHGEVQHVCZCVKQPQPUWTRNWUDQPWUVTCPUHGTTGFVQRQNKE[JQNFGTU (17,042)

%JCPIGKPEQPVTCEVNKCDKNKVKGUNKHGHWPF
CHVGTVCZ 4,297,565
Balance as at 31st December 24,373,392
6JGXCNWCVKQPQHVJGNKHGKPUWTCPEGDWUKPGUUCUCVUV&GEGODGTYCUECTTKGFQWVD[/T#DJKUJGM%JCFJC(+#QPDGJCNHQH/GUUTU9KNNKU
6QYGTU9CVUQP+PFKC2TKXCVG.KOKVGF8CNWCVKQPQHNKHGKPUWTCPEGDWUKPGUUKURGTHQTOGFQPCUGOKCPPWCNDCUKU
#EEQTFKPIVQVJGCRRQKPVGFCEVWCT[oUTGRQTVVJGTGUGTXGHQTVJG[GCTCOQWPVGFVQ4U/P
4U/PCPFKPVJGQRKPKQPQH
VJGCEVWCT[VJKUCOQWPVKUCFGSWCVGVQEQXGTVJGNKCDKNKVKGURGTVCKPKPIVQVJGNKHGKPUWTCPEGDWUKPGUUQH*0$#UUWTCPEG2.%
49 (a) i Surcharge tax

#NVJQWIJ*0$#UUWTCPEG2.%CPFKVUUWDUKFKCT[
*0$)+FKFPQVOGGVVJGEJCTIGCDKNKV[VJTGUJQNFQH4U$KNNKQPKVYCUNKCDNGHQTUWTEJCTIG
VCZDGKPICUWDUKFKCT[QH*CVVQP0CVKQPCN$CPM2.%
#URGTVJG5VCVGOGPVQH#NVGTPCVKXG6TGCVOGPV
5Q#6KUUWGFD[%#5TK.CPMCQPPF#RTKNUWTEJCTIGVCZGZRGPUGYJKEJKUFGGOGFVQ
DGCPGZRGPFKVWTGHQTVJG[GCTQHCUUGUUOGPVUJCNNDGTGEQTFGFCUCPCFLWUVOGPVVQVJGQRGPKPITGVCKPGFGCTPKPIUTGRQTVGFKP
VJGUVCVGOGPVQHEJCPIGUKPGSWKV[QPUV,CPWCT[CPF*0$)+ƂPCPEKCNUVCVGOGPVUJCXGDGGPCFLWUVGFCEEQTFKPIN[*QYGXGT*0$#
CEEQWPVGFHQTVJGTGNGXCPVVCZGZRGPUGKPVJGQRGPKPIDCNCPEGQHNKHGHWPFUKPEGVCZCDNGKPEQOGCTQUGHTQOVJGUWTRNWUCVVTKDWVCDNGVQNKHG
policy holders.
49 (b) Sensitivity of the Value of Insurance Liabilities
Change in assumptions Impact on gross liabilities

% %
Mortality 0.13 0.22
(0.22)

Discount rate DCUKURQKPVU (0.13)

DCUKURQKPVU 0.13 0.58
Expense 0.29 0.44
(0.37)


/LDELOLW\$GHTXDF\7HVWLQJb/$7
#.KCDKNKV[#FGSWCE[6GUV
.#6HQTNKHGKPUWTCPEGEQPVTCEVNKCDKNKV[YCUECTTKGFQWVD[/T#DJKUJGM%JCFJC(+#QPDGJCNHQH/GUUTU9KNNKU
6QYGTU9CVUQP+PFKC2TKXCVG.KOKVGFCUCVUV&GEGODGTCUTGSWKTGFD[5.(45+PUWTCPEG%QPVTCEVU9JGPRGTHQTOKPIVJG.#6VJG
%QORCP[FKUEQWPVGFCNNEQPVTCEVWCNECUJƃQYUCPFEQORCTGFVJKUCOQWPVYKVJVJGECTT[KPIXCNWGQHVJGNKCDKNKV[#EEQTFKPIVQVJGEQPUWNVCPV
CEVWCT[oUTGRQTVCUUGVUCTGUWHƂEKGPVN[CFGSWCVGCUEQORCTGFVQVJGTGUGTXGUCUCVUV&GEGODGT0QCFFKVKQPCNRTQXKUKQPYCUTGSWKTGF
CICKPUVVJG.#6CUCVUV&GEGODGT
,1685$1&(3529,6,21121/,)(b
6JGKPUWTCPEGRTQXKUKQPPQPNKHGDCNCPEGTGRTGUGPVUVJGPQPNKHGHWPFQHUWDUKFKCT[*0$)GPGTCN+PUWTCPEG.KOKVGFYJKEJKUECTT[KPIQWV
IGPGTCNKPUWTCPEGDWUKPGUU
#%%1706+0)21.+%;
,QVXUDQFH3URYLVLRQʶ1RQ/LIH,QVXUDQFH
0QPNKHGKPUWTCPEGEQPVTCEVNKCDKNKVKGUCTGTGEQIPKUGFYJGPEQPVTCEVUCTGGPVGTGFKPVQCPFRTGOKWOUCTGEJCTIGF6JGUGNKCDKNKVKGU
comprise claims liabilities and premium liabilities.
Claims liabilities
%NCKOUNKCDKNKVKGUCTGTGEQIPKUGFKPTGURGEVQHDQVJYKVJTGKPUWTCPEGCPFYKVJQWVTGKPUWTCPEG%NCKOUNKCDKNKVKGUTGHGTVQVJGQDNKICVKQPD[
VJGKPUWTCPEGEQORCP[YJGVJGTEQPVTCEVWCNQTQVJGTYKUGVQOCMGHWVWTGRC[OGPVUKPTGNCVKQPVQCNNENCKOUVJCVJCXGDGGPKPEWTTGFCU
CVXCNWCVKQPFCVG6JGUGKPENWFGRTQXKUKQPHQTENCKOUTGRQTVGFENCKOU+PEWTTGF$WV0QV4GRQTVGF
p+$04qCPFENCKOU+PEWTTGF$WV0QV
'PQWIJ4GRQTVGF
p+$0'4qVQIGVJGTYKVJTGNCVGFENCKOUJCPFNKPIEQUVU%NCKOUNKCDKNKVKGUEQPUKUVQHVJGDGUVGUVKOCVGXCNWGQHVJGENCKO
NKCDKNKVKGUCPFVJG2TQXKUKQPQH4KUM/CTIKPHQT#FXGTUG&GXKCVKQP
24#&ECNEWNCVGFCVNKPGQHDWUKPGUUNGXGN
Premium liabilities
2TGOKWONKCDKNKVKGUKUVJGJKIJGTQHVJGCIITGICVGQHVJG7PGCTPGF2TGOKWO4GUGTXG
724CPFVJGDGUVGUVKOCVGXCNWGQHVJGKPUWTGToU
7PGZRKTGF4KUM4GUGTXGU
744CVVJGXCNWCVKQPFCVGCPFVJG2TQXKUKQPQH4KUM/CTIKPUHQT#FXGTUG&GXKCVKQP
24#&ECNEWNCVGFCVNKPGQH
business level.
6JGRTQXKUKQPHQTWPGCTPGFRTGOKWOUTGRTGUGPVURTGOKWOUTGEGKXGFHQTTKUMUVJCVJCXGPQV[GVGZRKTGF)GPGTCNN[VJGTGUGTXGKUTGNGCUGF
QXGTVJGVGTOQHVJGEQPVTCEVCPFKUTGEQIPKUGFCURTGOKWOKPEQOG
)TQWRWUGUVJDCUKUVQFGHGTVJGITQUUYTKVVGPRTGOKWOQHCNNRQNKEKGUGZEGRVHQTVJGOCTKPGKPUWTCPEGRQNKEKGUCPFVKVNGKPUWTCPEG
RQNKEKGUYJGTGOCTKPGKPUWTCPEGRTGOKWOUCTGFGHGTTGFDCUGFQPDCUKUCPFVKVNGKPUWTCPEGRTGOKWOUCTGVTCPUHGTTGFVQTGUGTXGUHQT
VKVNGKPUWTCPEGHQTTGRQTVKPIRGTKQF
Liability Adequacy Test (LAT)

#UTGSWKTGFD[5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45QPp+PUWTCPEG%QPVTCEVUqVJGGPVKV[RGTHQTOGFC.KCDKNKV[#FGSWCE[6GUV
.#6KP
respect of General Insurance contract liabilities with the assistance of an external actuary.
7LWOH,QVXUDQFH5HVHUYHbbb
6KVNGKPUWTCPEGTGUGTXGKUOCKPVCKPGFD[VJG)TQWRVQRC[RQVGPVKCNENCKOUCTKUKPIHTQOVJGVKVNGKPUWTCPEGRQNKEKGU6KVNGKPUWTCPEGRQNKEKGU
CTGPQTOCNN[KUUWGFHQTCNQPIRGTKQFUWEJCU[GCTUQTOQTG6JWUPQRTQƂVKUTGEQIPKUGFKPVJGƂTUV[GCTQHVJGRQNKE[IKXGPVJGJKIJGT
RTQDCDKNKV[QHENCKOUQEEWTTKPIKPVJGƂTUV[GCT(TQOVJGUGEQPF[GCTQPYCTFURTQƂVKUTGEQIPKUGFD[COQTVKUKPIVJGRTGOKWOTGEGKXGF
QXGTCƂXG[GCTRGTKQFWUKPIVJGUVTCKIJVNKPGOGVJQF2TQƂVKPVJGƂTUV[GCTYKNNDGTGEQIPKUGFKPVJGUGEQPF[GCTCPFVJGTGCHVGTKVYKNNDG
RGTKQFKECNN[TGEQIPKUGF
FINANCIAL REPORTS
50 INSURANCE PROVISION - NON LIFE (Contd.)
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
Valuation of Non Life Insurance Contract Liabilities of Subsidiary, HNB General Insurance Limited (HNBGI)
6JGGUVKOCVGUQHIGPGTCNKPUWTCPEGEQPVTCEVUJCXGVQDGOCFGDQVJHQTVJGGZRGEVGFWNVKOCVGEQUVQHENCKOUTGRQTVGFCVVJGTGRQTVKPI
FCVGCPFHQTVJGGZRGEVGFWNVKOCVGEQUVQHENCKOU+PEWTTGF$WV0QV[GV4GRQTVGFCPFENCKOU+PEWTTGF$WV0QV'PQWIJ4GRQTVGF

+$04+$0'4CVVJGTGRQTVKPIFCVG+VECPVCMGCUKIPKƂECPVRGTKQFQHVKOGDGHQTGVJGWNVKOCVGENCKOUEQUVECPDGGUVCDNKUJGFYKVJ
EGTVCKPV[6JGOCKPCUUWORVKQPWPFGTN[KPIKPGUVKOCVKPIVJGCOQWPVQHQWVUVCPFKPIENCKOUKUVJGRCUVENCKOUFGXGNQROGPVGZRGTKGPEG
.CTIGENCKOUCTGWUWCNN[CFFTGUUGFUGRCTCVGN[GKVJGTD[DGKPITGUGTXGFCVVJGHCEGXCNWGQHNQUUCFLWUVGTGUVKOCVGUQTUGRCTCVGN[
RTQLGEVGFKPQTFGTVQTGƃGEVVJGKTHWVWTGFGXGNQROGPV+POQUVECUGUPQGZRNKEKVCUUWORVKQPUCTGOCFGTGICTFKPIHWVWTGTCVGUQHENCKOU
KPƃCVKQPQTNQUUTCVKQU

Rs 000 Rs 000
7PGCTPGFRTGOKWO
Gross 3,428,085
Reinsurance (692,584)

Net 2,735,501
Reserve for title insurance 57,059
2,792,560
Claims outstanding - Gross 1,006,371
%NCKOUKPEWTTGFDWVPQVTGRQTVGF)TQUU 382,657
4,181,588
Incurred But Not Reported (IBNR) and Incurred But Not Enough Reported (IBNER)
+$04CPF+$0'4ENCKOU4GUGTXGUCUCVUV&GEGODGTJCXGDGGPCEVWCTKCNN[EQORWVGFD[VJGEQPUWNVCPVCEVWCT[/U5KRKMC6CPFQP
/CVJWT(+#HQTCPFQPDGJCNHQH9KNNKU6QYGTU9CVUQP+PFKC2TKXCVG.KOKVGF
XCNWCVKQPYCUECTTKGFD[/U5KRKMC6CPFQP/CVJWT(+#
HQTCPFQPDGJCNHQH9KNNKU6QYGTU9CVUQP+PFKC2TKXCVG.KOKVGF6JGXCNWCVKQPKUDCUGFQPKPVGTPCVKQPCNN[CEEGRVGFCEVWCTKCNOGVJQFUCPFKU
RGTHQTOGFQPCUGOKCPPWCNDCUKUCPFGPUWTGFCFGSWCVGTGUGTXGUCTGOCKPVCKPGF
6HQVLWLYLW\RIFODLPVRXWVWDQGLQJ
As at 31st %JCPIGKP Reported Claim Impact on Gross Impact on Net +ORCEVQP2TQƂV +ORCEVQP'SWKV[
December 2022 assumptions 1WVUVCPFKPI .KCDKNKVKGU .KCDKNKVKGU before tax after tax
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
31st December 2022
Liability Adequacy Testing (LAT)

#.KCDKNKV[#FGSWCE[6GUV
.#6HQTPQPNKHGKPUWTCPEGEQPVTCEVNKCDKNKV[YCUECTTKGFQWVD[/U5KRKMC6CPFQP/CVJWT(+#HQTCPFQPDGJCNH
QH9KNNKU6QYGTU9CVUQP+PFKC2TKXCVG.KOKVGFCUCVUV&GEGODGTCUTGSWKTGFD[5TK.CPMC#EEQWPVKPI5VCPFCTF5.(45+PUWTCPEG
%QPVTCEVU6JGXCNWCVKQPKUDCUGFQPKPVGTPCVKQPCNN[CEEGRVGFCEVWCTKCNOGVJQFUCPFKURGTHQTOGFQPUGOKCPPWCNDCUKU#EEQTFKPIVQVJG
EQPUWNVCPVCEVWCT[oUTGRQTV*0$)GPGTCN+PUWTCPEG.KOKVGFCFGSWCVGN[UCVKUƂGUVJG.#6CUCVUV&GEGODGT0QCFFKVKQPCNRTQXKUKQP
YCUTGSWKTGFCICKPUVVJG.#6CUCVUV&GEGODGT

27+(5/,$%,/,7,(6 b
#%%1706+0)21.+%;
6JGƂPCPEKCNNKCDKNKVKGUKPENWFGFKPQVJGTNKCDKNKVKGUJCXGDGGPCEEQWPVGFHQTDCUGFQPVJGCEEQWPVKPIRQNKE[FKUEWUUGFKP0QVGVQVJG
ƂPCPEKCNUVCVGOGPVU
6JGQRGTCVKPINGCUGNKCDKNKV[JCUDGGPCEEQWPVGFHQTDCUGFQPVJGCEEQWPVKPIRQNKE[FKUEWUUGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
'ORNQ[GGDGPGƂVQDNKICVKQPUJCXGDGGPCEEQWPVGFHQTDCUGFQPVJGCEEQWPVKPIRQNKE[FKUEWUUGFKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
$KNNURC[CDNG 1,048,783 1,048,783

'ORNQ[GGDGPGƂVQDNKICVKQPU=0QVG
C? 269,106 834,878
+ORCKTOGPVCNNQYCPEGHQTQHHDCNCPEGUJGGVETGFKVGZRQUWTGU=0QVG
D? 4,410,515 4,410,515
1RGTCVKPINGCUGNKCDKNKV[=0QVG
D? 6,453,141 2,817,258
Other creditors 4,868,080 8,404,507
Payable to lease creditors 328,645 525,854
17,378,270 18,041,795
#UCVUV&GEGODGTQVJGTNKCDKNKVKGUKPENWFG4U/P
4U/PƂPCPEKCNNKCDKNKVKGUKPVJG$CPMCPF4U/P
4U
/PKPVJG)TQWR
D (PSOR\HH%HQȞW2EOLJDWLRQV
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
.KCDKNKV[HQT'2(KPVGTGUVTCVGIWCTCPVGG=0QVG
F? 88,294 88,294
.KCDKNKV[HQTNGCXGCEETWCNRNCP=0QVG
G? 180,812 180,812
2TQXKUKQPHQTITCVWKV[DGPGƂVU=0QVG
I? - 565,772
269,106 834,878
E 0RYHPHQWLQ,PSDLUPHQWIRU2II%DODQFH6KHHW&UHGLW([SRVXUHVGXULQJWKH<HDU b
#%%1706+0)21.+%;
6JGGZRGEVGFETGFKVNQUUGUQPQHHDCNCPEGUJGGVETGFKVGZRQUWTGUKUOGCUWTGFDCUGFQPVJGOGVJQFQNQI[FGUETKDGFKP0QVG
DVQVJG
ƂPCPEKCNUVCVGOGPVU
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
,PSDLUPHQWIRU)LQDQFLDO*XDUDQWHHV/HWWHUVRI&UHGLWDQG8QGUDZQ/RDQ&RPPLWPHQWV
6JG)TQWRCUUGUUGUKORCKTOGPVHQTQHHDCNCPEGUJGGVGZRQUWTGUUWEJCUƂPCPEKCNIWCTCPVGGUNGVVGTQHETGFKVCPFWPFTCYPEQOOKVOGPVU
KPNKPGYKVJ'%.RTKPEKRNGUCUFGVCKNGFKP0QVG
GVQVJGƂPCPEKCNUVCVGOGPVU
FINANCIAL REPORTS
51 OTHER LIABILITIES (Contd.)
$CPM)TQWR|
2022 2021
Rs 000 Rs 000
Stage 1
0GVKORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? 1,778,367
$CNCPEGCUCVUV&GEGODGT 2,567,514
Stage 2
0GVKORCKTOGPVEJCTIG
TGXGTUCNHQTVJG[GCT=0QVG? 362,578

$CNCPEGCUCVUV&GEGODGT 517,350
Stage 3
$CNCPEGCUCVUV,CPWCT[ 1,249,055
0GVKORCKTOGPVEJCTIGHQTVJG[GCT=0QVG? 76,596
$CNCPEGCUCVUV&GEGODGT 1,325,651
7RWDOLPSDLUPHQWDOORZDQFHIRURIIEDODQFHVKHHWFUHGLWH[SRVXUHV 4,410,515
68%25',1$7('7(50'(%76b b
#%%1706+0)21.+%;
6JGCEEQWPVKPIRQNKE[RGTVCKPKPIVQUWDQTFKPCVGFVGTOFGDVUKUIKXGPKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU
5WDQTFKPCVGFVGTOFGDVUTGRTGUGPVHWPFUDQTTQYGFHQTNQPIVGTOHWPFKPIRWTRQUGUYJKEJCTGUWDQTFKPCVGFVQVJGQVJGTENCKOU
5WDUGSWGPVVQKPKVKCNTGEQIPKVKQPUWDQTFKPCVGFVGTOFGDVUCTGOGCUWTGFCVVJGKTCOQTVKUGFEQUVWUKPIVJG'HHGEVKXG+PVGTGUV4CVG
'+4
OGVJQF#OQTVKUGFEQUVKUECNEWNCVGFD[VCMKPIKPVQCEEQWPVCP[FKUEQWPVQTRTGOKWOQPVJGKUUWGCPFEQUVUVJCVCTGCPKPVGITCNRCTVQH
VJG'+46JG'+4COQTVKUCVKQPKUKPENWFGFKPpKPVGTGUVGZRGPUGUqKPVJGKPEQOGUVCVGOGPV)CKPUCPFNQUUGUCTGTGEQIPKUGFKPVJGKPEQOG
UVCVGOGPVYJGPVJGNKCDKNKVKGUCTGFGTGEQIPKUGF
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
5WDQTFKPCVGFFGDGPVWTGU=0QVG
C? 22,914,299 23,724,442
22,914,299 23,724,442

52 (a) Subordinated Debentures
Bank Group
Year of issuance Colombo Interest Face Fixed / Interest Interest Repayment Issue Date Maturity Date As at As at As at As at
Stock Payment Value ̎RDWLQJ Rate Rate of Terms 31.12.2022 31.12.2021 31.12.2022 31.12.2021
Exchange Frequency interest Comparable
Listing rate *RYHUQPHQW
Securities
(Gross) (p.a)
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
.KUVGF At maturity Fixed 18 Year UV#RT 31st Mar 2024 1,193,302 1,176,474
2007 .KUVGF Annually Fixed 15 Year UV#WI UV,WN - -
.KUVGF Annually Fixed 7 Year UV0QX 1st Nov 2023 4,086,904 4,086,904
2019 .KUVGF Annually Fixed 5 Year 23rd Sep 2019 22nd Sep 2024 1,987,358 1,987,358
2019 .KUVGF Annually Fixed 7 Year 23rd Sep 2019 PF5GR 8,360,693 8,297,181
2019 .KUVGF Annually Fixed 5 Year 30th Dec 2019 30th Dec 2024 - 1,037,534
2021 .KUVGF Annually Fixed 10 Year VJ,WN VJ,WN 7,286,042 7,172,241
1 year T 1 year T
$KNNTCVG $KNNTCVG
2022 7PNKUVGF Annually (NQCVKPI 5 Year 25th April 2022 25th April 2027 - - 2,393,608 -
Total subordinated
debentures 22,914,299 26,151,300
Analysis of subordinated
debentures
Due within one year 4,720,996 4,920,463
Due after one year 18,193,303 21,230,837
22,914,299 26,151,300
*0$#UUWTCPEG2.%JCUKPXGUVGF4U/PKP
/PUWDQTFKPCVGFFGDGPVWTGUKUUWGFD[VJG$CPMCPF4U/P
/PKP
VJGFGDGPVWTGUKUUWGFD[*0$(KPCPEG2.%
6JG)TQWRFKFPQVJCXGCP[FGHCWNVUQHRTKPEKRCNCPFKPVGTGUVQTQVJGTDTGCEJGUYKVJTGURGEVVQKVUFGDVUGEWTKVKGUFWTKPIVJG[GCTGPFGFUV
December 2022.
%$6(/,,,&RPSOLDQWDSSURYHG6XERUGLQDWHG'HEHQWXUHV
$#5'.+++EQORNKCPVUWDQTFKPCVGFFGDGPVWTGUCTGGKVJGTRGTRGVWCNQTFCVGFUWDQTFKPCVGFUGEWTKVKGUQPYJKEJVJGTGKUCPQDNKICVKQPVQRC[
EQWRQPUYKVJCOKPKOWOOCVWTKV[RGTKQFQHƂXG[GCTUCPFYJKEJECPDGEQPXGTVGFVQQTFKPCT[UJCTGUCVCPQDLGEVKXGRTGURGEKƂGFVTKIIGT
RQKPVFGVGTOKPGFD[VJG/QPGVCT[$QCTF6JG[OC[DGECNNGFDGHQTGOCVWTKV[FCVGCVVJGQRVKQPQHVJG)TQWRCPFUWDLGEVVQRGTOKUUKQPD[
VJG)TQWRoUNGCFTGIWNCVQT6JGUGECRKVCNUGEWTKVKGUCTGKPENWFGFYKVJKPVJG)TQWRoUTGIWNCVQT[ECRKVCNDCUGCU6KGTECRKVCN
6JGUGEWTKVKGUYQWNFKPVJGGXGPVQHVJGYKPFKPIWRQHVJGKUUWGTDGUWDQTFKPCVGFVQVJGENCKOUQHFGRQUKVQTUCPFCNNQVJGTETGFKVQTUQHVJG
issuer.
FINANCIAL REPORTS
53 EMPLOYEE BENEFIT OBLIGATIONS
#%%1706+0)21.+%;
'H̍QHG%HQH̍W3ODQ
#FGƂPGFDGPGƂVRNCPKUCRQUVGORNQ[OGPVDGPGƂVRNCPQVJGTVJCPCFGƂPGFEQPVTKDWVKQPRNCP
(a) Pension Fund

6JG$CPMQRGTCVGUCPCRRTQXGFRGPUKQPHWPFVQHCEKNKVCVGVJGHQNNQYKPIRC[OGPVUHQTRGTOCPGPVUVCHHQHVJG$CPM
i Pensions to Retiring Staff

2GPUKQPCDNGUVCHHOGODGTUYJQCTGKPVJGRGTOCPGPVECFTGCTGGNKIKDNGVQFTCYRGPUKQPHTQOVJGRGPUKQPHWPFCURGTVJGVTWUVFGGF
dated 24th September 1981.
LL %HQH̍WVWR6WDIIZKR2SWHGIRUWKH2SWLRQDO6FKHPHIRU3HQVLRQLQWURGXFHGLQ
5VCHHOGODGTUYJQQRVGFHQTVJGQRVKQPCNUEJGOGHQTRGPUKQPKPVTQFWEGFKPCTGGNKIKDNGHQTVJGRC[OGPVKPCEEQTFCPEGYKVJVJG
VGTOUCPFEQPFKVKQPUCITGGFWRQP
iii Gratuity
)TCVWKV[YQWNFDGVJGRC[OGPVUVQUVCHHYJQUCVKUH[VJGETKVGTKCCURGTVJG)TCVWKV[#EV0QQHCVVJGVKOGQHNGCXKPIVJGUGTXKEGU
QHVJG$CPMYKVJQWVRGPUKQPTKIJVU
2C[OGPVQHITCVWKVKGUVQGORNQ[GGUYJQJCXGEQORNGVGFOQTGVJCPƂXG[GCTUQHUGTXKEGWPFGTVJGUCKFCEVKUEQXGTGFVJTQWIJVJG
$CPMoUQYPPQPEQPVTKDWVQT[RGPUKQPUEJGOGYJKEJKUKPHQTEG
6JGUGNKCDKNKVKGUCTGCUUGUUGFD[CPCEVWCTKCNXCNWCVKQPWUKPIRTQLGEVETGFKVOGVJQF6JG$CPMoUQDNKICVKQPKPTGURGEVQHFGƂPGFDGPGƂV
RGPUKQPRNCPKUECNEWNCVGFD[GUVKOCVKPIVJGCOQWPVQHHWVWTGDGPGƂVVJCVGORNQ[GGUJCXGGCTPGFKPTGVWTPHQTVJGKTUGTXKEGKPVJG
EWTTGPVCPFRTKQTRGTKQFUCPFFKUEQWPVKPIVJCVDGPGƂVVQFGVGTOKPGKVURTGUGPVXCNWGVJGPFGFWEVKPIVJGHCKTXCNWGQHCP[RNCPCUUGVUVQ
FGVGTOKPGVJGPGVCOQWPVVQDGUJQYPKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQP6JGXCNWGQHCP[FGƂPGFDGPGƂVCUUGVKUTGUVTKEVGFVQVJG
RTGUGPVXCNWGQHCP[GEQPQOKEDGPGƂVUCXCKNCDNGKPVJGHQTOQHTGHWPFUHTQOVJGRNCPQTTGFWEVKQPUKPVJGHWVWTGEQPVTKDWVKQPUVQVJGRNCP
+PQTFGTVQECNEWNCVGVJGRTGUGPVXCNWGQHGEQPQOKEDGPGƂVUEQPUKFGTCVKQPKUIKXGPVQCP[OKPKOWOHWPFKPITGSWKTGOGPVUVJCVCRRN[VQ
CP[RNCPKPVJG$CPM#PGEQPQOKEDGPGƂVKUCXCKNCDNGVQVJG$CPMKHKVKUTGCNKUCDNGFWTKPIVJGNKHGQHVJGRNCPQTQPUGVVNGOGPVQHVJGRNCP
liabilities.
6JG$CPMFGVGTOKPGUVJGPGVKPVGTGUVGZRGPUG
KPEQOGQPVJGPGVFGƂPGFDGPGƂVNKCDKNKV[
CUUGVD[CRRN[KPIVJGFKUEQWPVTCVGWUGFVQ
OGCUWTGVJGFGƂPGFDGPGƂVQDNKICVKQPCVVJGDGIKPPKPIQHVJGCPPWCNRGTKQFVQVJGPGVFGƂPGFDGPGƂVNKCDKNKV[
CUUGVCVVJGDGIKPPKPI
of the annual period.
6JGFKUEQWPVTCVGKUVJG[KGNFCUCVVJGTGRQTVKPIFCVGQPIQXGTPOGPVDQPFUVJCVJCXGOCVWTKV[FCVGUCRRTQZKOCVKPIVQVJGVGTOUQHVJG
$CPMoUQDNKICVKQPU6JGECNEWNCVKQPKURGTHQTOGFD[CSWCNKƂGFCEVWCT[WUKPIVJGRTQLGEVGFWPKVETGFKVOGVJQF
6JGFGOQITCRJKECUUWORVKQPUWPFGTN[KPIVJGXCNWCVKQPCTGTGVKTGOGPVCIGGCTN[YKVJFTCYCNUHTQOUGTXKEGCPFTGVKTGOGPVQPOGFKECN
ITQWPFUFGCVJDGHQTGCPFCHVGTTGVKTGOGPVGVE6JGCUUGVUQHVJGHWPFCTGJGNFUGRCTCVGN[HTQOVJQUGQHVJG$CPMoUCUUGVUCPFCTG
administered independently by the trustees of the fund.
&GVCKNUQHVJGRGPUKQPHWPFCTGIKXGPKP0QVG
CVQVJGƂPCPEKCNUVCVGOGPVU

E2WKHU/RQJWHUP(PSOR\HH%HQH̍WV
6JG$CPMoUPGVQDNKICVKQPKPTGURGEVQHNQPIVGTOGORNQ[GGDGPGƂVUQVJGTVJCPRGPUKQPHWPFKUVJGCOQWPVQHHWVWTGDGPGƂVVJCV
GORNQ[GGUJCXGGCTPGFKPTGVWTPHQTVJGKTUGTXKEGKPVJGEWTTGPVCPFRTKQTRGTKQFU6JCVDGPGƂVKUFKUEQWPVGFVQFGVGTOKPGKVURTGUGPV
XCNWG6JGFKUEQWPVTCVGKUVJG[KGNFCVVJGTGRQTVKPIFCVGQPIQXGTPOGPVDQPFUVJCVJCXGOCVWTKV[FCVGUCRRTQZKOCVKPIVQVJGVGTOUQH
VJG$CPMoUQDNKICVKQP6JGECNEWNCVKQPKURGTHQTOGFWUKPIVJGRTQLGEVGFWPKVETGFKVOGVJQF#P[CEVWCTKCNICKPUCPFNQUUGUCTGTGEQIPKUGF
KPVJGKPEQOGUVCVGOGPVKPVJGRGTKQFKPYJKEJVJG[CTKUG6JG$CPMoUNKCDKNKV[VQYCTFUVJGRQTVKQPQHVJGCEEWOWNCVGFNGCXGYJKEJKU
GZRGEVGFVQDGWVKNKUGFDG[QPFQPG[GCTHTQOVJGGPFQHVJGTGRQTVKPIRGTKQFKUVTGCVGFCUQVJGTNQPIVGTOGORNQ[GGDGPGƂVU
9JGPVJGDGPGƂVUQHCRNCPJCUEJCPIGFQTYJGPCRNCPKUEWTVCKNGFVJGTGUWNVKPIEJCPIGKPDGPGƂVUVJCVTGNCVGUVQRCUVUGTXKEGQTVJG
ICKPQTNQUUQPEWTVCKNOGPVKUTGEQIPKUGFKOOGFKCVGN[KPRTQƂVQTNQUU6JG)TQWRTGEQIPKUGUICKPQTNQUUGUQPVJGUGVVNGOGPVQHCFGƂPGF
plan when the settlement occurs.
(c) Gratuity Obligation - Group Companies

6JGUWDUKFKCTKGUQHVJG$CPMFQPQVQRGTCVGRGPUKQPHWPFUCPFOCMGCRTQXKUKQPHQTITCVWKV[QDNKICVKQP6JGUGNKCDKNKVKGUCTGCUUGUUGF
GKVJGTD[CEVWCTKCNXCNWCVKQPUWUKPIRTQLGEVGFETGFKVOGVJQFQTD[VJGWUGQHITCVWKV[HQTOWNC2TQXKUKQPHQTITCVWKV[DGPGƂVUQHITQWR
EQORCPKGUKUIKXGPKP0QVG
G(PSOR\HHVʹ3URYLGHQW)XQG%DQN
'ORNQ[GGUo2TQXKFGPV(WPFKUCPCRRTQXGFRTKXCVGRTQXKFGPVHWPFYJKEJJCUDGGPUGVWRVQOGGVVJGRTQXKFGPVHWPFNKCDKNKVKGUQHVJG
$CPMVQYJKEJVJG$CPMCPFGORNQ[GGUEQPVTKDWVGCVCPFTGURGEVKXGN[QPVJGUCNCT[QHGCEJGORNQ[GG5VCHHOGODGTUYJQCTG
OGODGTUQHVJGHWPFCTGGPVKVNGFVQTGEGKXGCOKPKOWOKPVGTGUVTCVGYJKEJKUVJGJKIJGTQHQPG[GCTƂZGFFGRQUKVTCVGQH*0$QT0CVKQPCN
5CXKPIU$CPMQPVJGKTDCNCPEGQPCUGOKCPPWCNDCUKU#EEQTFKPIN[VJKUQDNKICVKQPYCUVTGCVGFCUCFGƂPGFDGPGƂVNKCDKNKV[CPFCP
CEVWCTKCNXCNWCVKQPYCUEQPFWEVGFVQXCNWGVJG$CPMoUQDNKICVKQPQHVJGUCOG
H:LGRZVʹ:LGRZHUVʹDQG2USKDQVʹ3HQVLRQ)XQG
6JG$CPMQRGTCVGUCUGRCTCVG9KFQYUo9KFQYGTUoCPF1TRJCPUo2GPUKQP5EJGOG
9912YJKEJYCUGUVCDNKUJGFYKVJGHHGEVHTQOUV
5GRVGODGT6JGEQPVTKDWVKQPUCTGHTQOGORNQ[GGUQPN[CPFVJG$CPMFQGUPQVJCXGCP[NGICNQTEQPUVTWEVKXGQDNKICVKQPVQYCTFUVJG
above scheme.
&GVCKNUQH9KFQYUo9KFQYGTUoCPF1TRJCPUo2GPUKQP(WPFCTGIKXGPKP0QVG
HVQVJGƂPCPEKCNUVCVGOGPVU
I'H̍QHG&RQWULEXWLRQ3ODQVb
#FGƂPGFEQPVTKDWVKQPRNCPKUCRQUVGORNQ[OGPVRNCPWPFGTYJKEJCPGPVKV[RC[UƂZGFEQPVTKDWVKQPUKPVQCUGRCTCVGGPVKV[
CHWPFCPF
YKNNJCXGPQNGICNQTEQPUVTWEVKXGQDNKICVKQPVQRC[CHWTVJGTEQPVTKDWVKQPKHVJGHWPFFQGUPQVJQNFUWHƂEKGPVCUUGVUVQRC[CNNGORNQ[GG
DGPGƂVUTGNCVKPIVQGORNQ[GGUGTXKEGUKPVJGEWTTGPVCPFRTKQTRGTKQFU1DNKICVKQPUHQTEQPVTKDWVKQPUVQFGƂPGFEQPVTKDWVKQPRNCPUCTG
TGEQIPKUGFCUCPGZRGPUGKPVJGKPEQOGUVCVGOGPVCUCPFYJGPVJG[CTGFWG
(i) Employees’ Trust Fund

6JG$CPMCPFVJG)TQWREQPVTKDWVGQHVJGUCNCT[QHGCEJGORNQ[GGVQVJG'ORNQ[GGUo6TWUV(WPF
LL (PSOR\HHVʹ3URYLGHQW)XQGʶ*URXS&RPSDQLHV
6JG)TQWRGPVKVKGUCPFVJGKTGORNQ[GGUEQPVTKDWVGCVCPFTGURGEVKXGN[QPVJGUCNCT[QHGCEJGORNQ[GGVQ'ORNQ[GGUo
2TQXKFGPV(WPFGZEGRVHQTVJG$CPMCUGZRNCKPGFCDQXG
#%%1706+0),7&)'/'065'56+/#6'5#0&#557/26+105
'H̍QHG%HQH̍W2EOLJDWLRQ
6JGFGƂPGFDGPGƂVQDNKICVKQPKUFGVGTOKPGFWUKPICPCEVWCTKCNXCNWCVKQP6JGCEVWCTKCNXCNWCVKQPKPXQNXGUOCMKPICUUWORVKQPUCDQWV
FKUEQWPVTCVGUGZRGEVGFTCVGUQHTGVWTPQPCUUGVUHWVWTGUCNCT[KPETGCUGUOQTVCNKV[TCVGUKPETGCUGKPEQUVQHNKXKPICNNQYCPEGUCPFHWVWTG
RGPUKQPKPETGCUGU&WGVQVJGNQPIVGTOPCVWTGQHVJGUGRNCPUUWEJGUVKOCVGUCTGUWDLGEVVQUKIPKƂECPVWPEGTVCKPV[#NNCUUWORVKQPUCTG
TGXKGYGFCVGCEJTGRQTVKPIFCVG
+PFGVGTOKPKPIVJGCRRTQRTKCVGFKUEQWPVTCVGOCPCIGOGPVEQPUKFGTUVJGKPVGTGUVTCVGUQH)QXGTPOGPVQH5TK.CPMC6TGCUWT[$QPFUYKVJ
OCVWTKVKGUEQTTGURQPFKPIVQVJGGZRGEVGFFWTCVKQPQHFGƂPGFDGPGƂVQDNKICVKQP(WVWTGUCNCT[KPETGCUGUCPFRGPUKQPKPETGCUGUCTGDCUGF
QPGZRGEVGFHWVWTGKPƃCVKQPTCVGUGZRGEVGFHWVWTGUCNCT[KPETGOGPVTCVGUCPFGZRGEVGFHWVWTGRGPUKQPKPETGCUGU
FINANCIAL REPORTS
53 EMPLOYEE BENEFIT OBLIGATIONS (Contd.)
53 (a) Bank Group

As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
7PHWPFGFFGƂPGFDGPGƂVRNCPU=0QVG
CK? 269,105 180,811
(WPFGFFGƂPGFDGPGƂVRNCP=0QVG
EK? (3,479,579)
(3,479,579)

7RWDOHPSOR\HHEHQH̍WREOLJDWLRQV (3,210,474)
(3,298,768)

53 (a) i 1vÕì`ìwi`LiiwÌ«>Ã
.KCDKNKV[HQT'2(KPVGTGUVTCVGIWCTCPVGGRNCP=0QVG
F? 88,294 -
.KCDKNKV[HQTNGCXGCEETWCNRNCP=0QVG
G? 180,811 180,811
2TQXKUKQPHQTITCVWKV[DGPGƂVU - -
269,105 180,811
53 (b) Implementation of the Provisions of the Minimum Age of Workers Act No 28 of 2021
+PCEEQTFCPEGYKVJVJGRTQXKUKQPUQHVJGCDQXG#EVFWTKPIVJG[GCTVJG)TQWRGZVGPFGFVJGOKPKOWOTGVKTGOGPVCIGQHKVUGORNQ[GGU
as follows.
#IGQH'ORNQ[GG /KPKOWO4GVKTGOGPV#IG

$GNQY[GCTU ;GCTU
#EEQTFKPIN[VJGCOGPFGFOKPKOWOTGVKTGOGPVCIGYCUKPEQTRQTCVGFKPVJGCUUGUUOGPVQHCEVWCTKCNXCNWCVKQPQHFGƂPGFDGPGƂVQDNKICVKQPUCU
CVUV&GEGODGTCPFKORCEVHTQOUCOGYCUFKUENQUGFKP0QVG
EKKKVQVJGƂPCPEKCNUVCVGOGPVUCURCUVUGTXKEGDGPGƂV
F )XQGHGGȞQHGEHQȞWSODQb b
3HQVLRQ)XQG%DQNbb
#PCEVWCTKCNXCNWCVKQPQHVJGRGPUKQPHWPFYCUECTTKGFQWVCUCVUV&GEGODGTD[/T/2QQRCNCPCVJCP#+#/GUUTU#EVWCTKCNCPF
/CPCIGOGPV%QPUWNVCPVU
2XV.VFCƂTOQHRTQHGUUKQPCNCEVWCTKGU6JGXCNWCVKQPOGVJQFWUGFD[VJGCEVWCT[VQXCNWGVJGHWPFKUVJG
RTQLGEVGFWPKVETGFKVOGVJQFVJGOGVJQFTGEQOOGPFGFD[VJG5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp'ORNQ[GG$GPGƂVUq
6JG$CPMEQPVTKDWVGFQWVQHVJGRGPUKQPCDNGUCNCT[VQVJGRGPUKQPHWPFKP

6JGCUUGVUQHVJGHWPFYJKEJCTGKPFGRGPFGPVN[CFOKPKUVGTGFD[VJGVTWUVGGUCURGTVJGRTQXKUKQPQHVJG6TWUV&GGFCTGJGNFUGRCTCVGN[HTQO
VJQUGQHVJG$CPM
0QCFFKVKQPCNRTQXKUKQPJCUDGGPOCFGKPVJGƂPCPEKCNUVCVGOGPVUQHVJG$CPMHQTITCVWKVKGUVQGORNQ[GGUYJQJCXGEQORNGVGFƂXGQTOQTG
[GCTUQHUGTXKEGRC[CDNGWPFGTVJG2C[OGPVQH)TCVWKV[#EV0QQHCUVJG$CPMEQPVTKDWVGUHQTCNNRGTOCPGPVGORNQ[GGUVQKVUQYPPQP
EQPVTKDWVQT[RGPUKQPUEJGOGYJKEJKUKPHQTEG

xÎV® iwVÌÉÃÕÀ«ÕÃ®vÕì`ìwi`LiiwÌ«>«iÃvÕ`
$CPM)TQWR|
Rs 000 Rs 000
2TGUGPVXCNWGQHHWPFGFQDNKICVKQP=0QVG
EKKK? 16,352,743
6QVCNRTGUGPVXCNWGQHQDNKICVKQPU 16,352,743
(CKTXCNWGQHRNCPCUUGVU=0QVG
EKK? (19,832,322)

5WTRNWUFGƂEKVQPHWPFGFFGƂPGFDGPGƂVRNCPRGPUKQPHWPF (3,479,579)

5HFRJQLVHGDVVHWOLDELOLW\IRUGH̍QHGEHQH̍WREOLJDWLRQVSHQVLRQIXQG (3,479,579)

#URGT5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5sp'ORNQ[GG$GPGƂVUqKHCRNCPKUKPUWTRNWUVJGCOQWPVTGEQIPKUGFCUVJGPGVFGƂPGF
DGPGƂVCUUGVKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPKUVJGNQYGTQHVJGUWTRNWUKPVJGFGƂPGFDGPGƂVRNCPCPFVJGCUUGVEGKNKPIYJKEJKUVJG
RTGUGPVXCNWGQHCP[GEQPQOKEDGPGƂVUCXCKNCDNGVQVJGGPVKV[KPVJGHQTOQHCTGHWPFQTCTGFWEVKQPKPHWVWTGEQPVTKDWVKQPU5KPEGVJGCEVWCTKCN
XCNWCVKQPQHVJGRGPUKQPHWPFCUCVUV&GEGODGTTGUWNVGFKPCUWTRNWU$CPMCUUGUUGFVJGTGSWKTGOGPVVQCRRN[VJGCUUGVEGKNKPICPF
TGEQIPKUGFVJGUWTRNWUKPVJGRGPUKQPHWPFXCNWCVKQPCOQWPVKPIVQ4U/PCUCPGVTGEGKXCDNGKPTGURGEVQHRGPUKQPHWPF
s4U
/P
53 (c) ii Fair Value of Plan Assets consists of the following
$CPM)TQWR|
Rs 000 Rs 000
'SWKV[UGEWTKVKGUCPFFGDGPVWTGU 2,940,540

Government securities 7,755,140
$CNCPEGUYKVJDCPMU 20,779
Fixed deposits 9,281,270
Others (165,407)

19,832,322
xÎV®ÛiiÌÌi*ÀiÃiÌ6>Õiviwi` iiwÌ"L}>ÌÃ
$CPM)TQWR|
Rs 000 Rs 000
.KCDKNKV[HQTFGƂPGFDGPGƂVQDNKICVKQPUCUCVUV,CPWCT[ 17,725,989

%WTTGPVUGTXKEGEQUV=0QVG
C? 746,605
+PVGTGUVQPQDNKICVKQP 1,949,859
#EVWCTKCN
ICKPNQUU (3,253,330)

2CUVUGTXKEGDGPGƂV=0QVG
C? -

$GPGƂVURCKFD[VJGRNCP (816,380)

/LDELOLW\IRUGH̍QHGEHQH̍WREOLJDWLRQVDVDWVW'HFHPEHU 16,352,743
FINANCIAL REPORTS

53 (c) iv Movement in the Present Value of Plan Assets
$CPM)TQWR|
2022 2021
Rs 000 Rs 000
(CKTXCNWGQHRNCPCUUGVUCUCVUV,CPWCT[ 18,974,697
Expected return on plan assets 2,087,217
Contributions paid into plan 983,066
$GPGƂVURCKFD[VJGRNCP (816,380)

Actuarial loss (1,396,278)

)DLUYDOXHRISODQDVVHWVDVDWVW'HFHPEHU 19,832,322
xÎV®Û iÌÌiÀiÃÌiwi` iiwÌčÃÃiÌÉ>LÌÞ®
$CPM)TQWR|
Rs 000 Rs 000
+PVGTGUVQPQDNKICVKQP 1,949,859
Expected return of plan assets (2,087,216)

1HWLQWHUHVWRQGH̍QHGEHQH̍WDVVHWOLDELOLW\bb>1RWHD@ (137,357)
53 (c) vi Actuarial Gains and Losses Recognised in Other Comprehensive Income
Bank Group
)RUWKH\HDUHQGHGVW'HFHPEHUb 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
#EVWCTKCNICKP
NQUUQPRTGUGPVXCNWGQHFGƂPGFDGPGƂVQDNKICVKQPU 3,253,330 3,307,343
#EVWCTKCNICKP
NQUUQPHCKTXCNWGQHRNCPCUUGVU (1,396,278)
(1,396,278)

Actuarial gain/(loss) recognised during the year 1,857,052 1,911,065
53 (c) vii Actuarial Assumptions
Type of Criteria Description

Assumption
Demographic /QTVCNKV[+PUGTXKEG #/QTVCNKV[VCDNGKUUWGFD[VJG+PUVKVWVGQH#EVWCTKGU.QPFQP
assumptions After retirement #
#PPWKVKGUVCDNG
/CNGUCPF(GOCNGUKUUWGFD[VJG+PUVKVWVGQH#EVWCTKGU.QPFQP
Staff turnover 6JGYKVJFTCYCNTCVGCVCPCIGVJCVTGRTGUGPVUVJGRTQDCDKNKV[QHCPCEVKXGGORNQ[GG
NGCXKPIYKVJKPQPG[GCTQHVJCVCIGFWGVQTGCUQPUQVJGTVJCPFGCVJKNNJGCNVJCPFPQTOCN
TGVKTGOGPV6JGUCOGYKVJFTCYCNTCVGUYJKEJYGTGWUGFKPVJGNCUVXCNWCVKQP
CUCVUV
&GEGODGTVQFGVGTOKPGVJGNKCDKNKV[QPCEEQWPVQHVJGCEVKXGGORNQ[GGUKPVJGHWPFGF
UEJGOGYGTGWUGFKPVJGCEVWCTKCNXCNWCVKQPECTTKGFQWVCUCVUV&GEGODGT
Disability Assumptions similar to those used in other comparable schemes for disability were used as
VJGFCVCTGSWKTGFVQFQCUEJGOGURGEKƂEUVWF[YCUPQVCXCKNCDNG
0QTOCNTGVKTGOGPVCIG #URGTVJGRTQXKUKQPUQH/KPKOWO#IGQH9QTMGTU#EV0QQH
Financial Rate of discount #NQPIVGTOKPVGTGUVTCVGQHRC
sRCJCUDGGPWUGFVQFKUEQWPV
assumptions HWVWTGNKCDKNKVKGUVCMKPIKPVQEQPUKFGTCVKQPTGOCKPKPIYQTMKPINKHGQHVJGGNKIKDNGGORNQ[GGU
Salary increases #UCNCT[KPETGOGPVTCVGQHRC
sRCJCUDGGPWUGFKPTGURGEVQHVJG
active employees.
2QUVTGVKTGOGPVRGPUKQP 0KN
0KN
increase rate
6JGCXGTCIGFWTCVKQPQHVJGRGPUKQPHWPFQDNKICVKQPKU[GCTUCUCVUV&GEGODGT
[GCTU

53 (c) viii Sensitivity of Assumptions Employed in Actuarial Valuation
#UUWORVKQPUTGICTFKPIFKUEQWPVTCVGCPFUCNCT[KPETGOGPVTCVGJCXGCUKIPKƂECPVGHHGEVQPVJGCOQWPVUTGEQIPKUGFKPVJGUVCVGOGPVQH
EQORTGJGPUKXGKPEQOGCPFUVCVGOGPVQHƂPCPEKCNRQUKVKQP
6JGHQNNQYKPIVCDNGFGOQPUVTCVGUVJGUGPUKVKXKV[QHCTGCUQPCDN[RQUUKDNGEJCPIGKPUWEJCUUWORVKQPUYKVJCNNQVJGTXCTKCDNGUJGNFEQPUVCPVKP
the actuarial valuation of the pension fund as at 31st December 2022.
,QFUHDVHGHFUHDVHb Increase/(decrease) 6HQVLWLYLW\(IIHFW 6HQVLWLYLW\(IIHFWRQ

in Discount Rate in Salary on Statement of Pension Fund Surplus
Increment &RPSUHKHQVLYH ,QFUHDVHGHFUHDVHb
Rate ,QFRPHb,QFUHDVH
GHFUHDVHLQUHVXOWVbIRU
the year
Rs 000 Rs 000

xÎV®Ý ÃÌÀLÕÌv*ÀiÃiÌ6>Õiviwi` iiwÌ"L}>ÌÃ*iÃÕ` >

)KXGPDGNQYKUCPCPCN[UKUQHVJGFKUVTKDWVKQPQHRTGUGPVXCNWGQHFGƂPGFDGPGƂVQDNKICVKQPRGTVCKPKPIVQVJGRGPUKQPHWPFQHVJG$CPM
GZENWFKPIVJGHTQ\GPRGPUKQPDGPGƂVHQTVJGGORNQ[GGUYJQJCXGQRVGFHQTVJGQRVKQPCNUEJGOGHQTRGPUKQPUKPVTQFWEGFKP

Rs 000 Rs 000
.GUUVJCPQPG[GCT 506,621

[GCTU 1,092,018
[GCTU 1,865,908
[GCTU 3,818,350
Above 10 years 6,735,586
14,018,483
FINANCIAL REPORTS

53 (d) Provision for EPF Interest Rate Guarantee Plan - Bank/Group
'2(KUCPCRRTQXGFRTQXKFGPVHWPFYJKEJJCUDGGPUGVWRVQOGGVVJGRTQXKFGPVHWPFNKCDKNKVKGUQHVJG$CPM5VCHHOGODGTUYJQCTGOGODGTU
QHVJGHWPFCTGGPVKVNGFVQTGEGKXGCOKPKOWOKPVGTGUVTCVGYJKEJKUVJGJKIJGTQHQPG[GCTƂZGFFGRQUKVTCVGQH*0$QT0CVKQPCN5CXKPIU$CPM
QPVJGKTDCNCPEGQPCUGOKCPPWCNDCUKU#EEQTFKPIN[VJKUQDNKICVKQPYCUVTGCVGFCUCFGƂPGFDGPGƂVNKCDKNKV[CPFCPCEVWCTKCNXCNWCVKQPYCU
EQPFWEVGFD[/T/2QQRCNCPCVJCP#+#QH/GUUGTU#EVWCTKCNCPF/CPCIGOGPV%QPUWNVCPVU
2XV.KOKVGFVQXCNWGVJG$CPMoUQDNKICVKQPQP
UCOGYKVJVJGHQNNQYKPICEVWCTKCNCUUWORVKQPU
$CPM)TQWR|
Discount rate 18.50%

.QPIVGTOKPVGTGUVTCVGVQETGFKVVJGHWPF 18.50%
Liability for EPF interest rate guarantee
$CPM)TQWR|
2022 2021
Rs 000 Rs 000
2TGUGPVXCNWGQHQDNKICVKQPCUCVUV,CPWCT[ 84,614

2TQXKUKQPOCFGFWTKPIVJG[GCT
0QVG 3,680
3UHVHQWYDOXHRIREOLJDWLRQDVDWVW'HFHPEHU>1RWHDL@ 88,294
53 (e) Provision for Leave Accrual Plan - Bank/Group

Employees are entitled to accumulate annual leave up to a maximum of ninety days and such accumulated leave to be utilised prior to their
TGVKTGOGPV6JKUJCUDGGPVTGCVGFCUQVJGTNQPIVGTODGPGƂVKPVGTOUQH5TK.CPMC#EEQWPVKPI5VCPFCTFU.-#5QPp'ORNQ[GGDGPGƂVUq
CPFCPCEVWCTKCNXCNWCVKQPJCUDGGPEQPFWEVGFD[/T/2QQRCNCPCVJCP#+#QH/GUUGTU#EVWCTKCNCPF/CPCIGOGPV%QPUWNVCPVU
2XV.KOKVGF
QPUCOGYKVJVJGHQNNQYKPICUUWORVKQPU
/LDELOLW\IRUOHDYHDFFUXDOSODQ
$CPM)TQWR|
Discount rate 18.50%

Future salary increase 17.00%
/LDELOLW\IRUOHDYHDFFUXDOSODQ
$CPM)TQWR|
2022 2021
Rs 000 Rs 000
2TGUGPVXCNWGQHQDNKICVKQPCUCVUV,CPWCT[ 154,215

2TQXKUKQPOCFGFWTKPIVJG[GCT
0QVG 26,596
3UHVHQWYDOXHRIREOLJDWLRQDVDWVW'HFHPEHU>1RWHDL@ 180,811
Ib :LGRZVʹ:LGRZHUVʹDQG2USKDQVʹ3HQVLRQ)XQG

6JGTGUWNVUQHVJGCEVWCTKCNXCNWCVKQPQHVJG9KFQYUo9KFQYGTUoCPF1TRJCPUo2GPUKQP(WPFEQPFWEVGFD[/T/2QQRCNCPCVJCP#+#QH
/GUUTU#EVWCTKCNCPF/CPCIGOGPV%QPUWNVCPVU
2XV.KOKVGFKPFKECVGVJCVVJGCEVWCTKCNRTGUGPVXCNWGQHVJGRTQOKUGFDGPGƂVKU4U/P
CPFVJCVVJGHCKTXCNWGQHVJGHWPFCUUGVUKU4U/PTGUWNVKPIKPCRCUVUGTXKEGUWTRNWUQH4U/P
4U/PKPVJG9KFQYUo
9KFQYGTUoCPF1TRJCPUo2GPUKQP5EJGOGCUCVUV&GEGODGT
0QEQPVTKDWVKQPKUOCFGD[VJG$CPMCPFVJGOGODGTUoEQPVTKDWVKQPFWTKPIVJGRGTKQFCOQWPVGFVQ4U/P
4U/P

J 3URYLVLRQIRUJUDWXLW\EHQȞWV
)TQWR|
2022 2021
Rs 000 Rs 000

2TQXKUKQPFWTKPIVJG[GCT=0QVG? 111,649
#ESWKUKVKQPQHUWDUKFKCT[JGNFVJTQWIJ*0$(KPCPEG2.% -
#EVWCTKCN
ICKPNQUUTGEQIPKUGFKP1%+ (103,583)

2C[OGPVUFWTKPIVJG[GCT -

Balance as at 31st December 565,772
Group
Actuarial Assumptions
Discount rate 8% - 18.5%
Future salary increment rate 6% - 12%
#EVWCTKCNXCNWCVKQPUHQT*0$#UUWTCPEG2.%CPF*0$(KPCPEG2.%CUCVUV&GEGODGTCPFUV/CTEJTGURGEVKXGN[YGTGECTTKGF
QWVD[CEVWCT[/T2WUJRCMWOCT)WPCUGMCTC#UUQEKCVGQH+PUVKVWVGQH#WUVTCNKCQH/GUUGTU5OKNGU)NQDCN
2XV.VF
54 STATED CAPITAL
Ordinary shares
1TFKPCT[UJCTGUKPVJG$CPMCTGTGEQIPKUGFCVVJGCOQWPVRCKFRGTQTFKPCT[UJCTGPGVQHFKTGEVN[CVVTKDWVCDNGKUUWGEQUVU6JGUJCTGUQHVJG
$CPMCTGSWQVGFKPVJG%QNQODQ5VQEM'ZEJCPIG6JGJQNFGTUQHQTFKPCT[UJCTGUCTGGPVKVNGFVQTGEGKXGFKXKFGPFUFGENCTGFHTQOVKOGVQVKOG
CPFCTGGPVKVNGFVQQPGXQVGRGTUJCTGCV)GPGTCN/GGVKPIUQHVJG$CPM
6JGPQPXQVKPIUJCTGUTCPMRCTKRCUUWKPTGURGEVQHCNNTKIJVUYKVJVJGQTFKPCT[UJCTGUQHVJG$CPMGZEGRVXQVKPITKIJVUQPTGUQNWVKQPURCUUGF
CVIGPGTCNOGGVKPIU+HVJG$CPMHCKNUVQRC[FKXKFGPFUHQTVJTGGEQPUGEWVKXG[GCTUVJGUGUJCTGUYKNNCWVQOCVKECNN[DGEQPXGTVGFKPVQXQVKPI
ordinary shares. .
54 (a) Stated Capital - Bank/Group
2022 2021
Number of 9DOXHb Number of 9DOXHb
shares shares
Rs 000 Rs 000
Voting ordinary shares

+UUWGQHUJCTGUVJTQWIJUETKRFKXKFGPF=0QVG
D? 7,583,061 1,052,150
$CNCPEGCUCVUV&GEGODGT 428,442,985 31,732,741
1RQYRWLQJRUGLQDU\VKDUHV
+UUWGQHUJCTGUVJTQWIJUETKRFKXKFGPF=0QVG
D? 2,067,808 262,611
$CNCPEGCUCVUV&GEGODGT 107,112,457 6,946,264
535,555,442 38,679,005
54 (b) Issue of Shares through Scrip Dividends

$CPMKUUWGFXQVKPIUJCTGUKPVJGHQTOQHUETKRFKXKFGPFCVCRTKEGQH4UCPFPQPXQVKPIUJCTGUCVCRTKEGQH4UQP
VJ#RTKN
FINANCIAL REPORTS
55 STATUTORY RESERVE FUND
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
6TCPUHGTUFWTKPIVJG[GCT 750,000 750,000
1DWXUHDQGSXUSRVHRIUHVHUYH
5VCVWVQT[TGUGTXGHWPFKUOCKPVCKPGFCURGTVJGUVCVWVQT[TGSWKTGOGPVUKPVGTOUQH5GEVKQP
CPF
QHVJG$CPMKPI#EV0QQH
6JKUHWPFKUDWKNVWRD[VTCPUHGTTKPICUWOGSWKXCNGPVVQPQVNGUUVJCPQHVJGRTQƂVCHVGTVCZDGHQTGCP[FKXKFGPFKUFGENCTGFQTCP[RTQƂVU
CTGVTCPUHGTTGFWPVKNVJGHWPFGSWCNUQHVJG$CPMoUUVCVGFECRKVCN6JGTGCHVGTCHWTVJGTUWOGSWCNVQQHRTQƂVCHVGTVCZKUVTCPUHGTTGFWPVKN
VJGHWPFGSWCNUVQVJGUVCVGFECRKVCNQHVJG$CPM
56 RETAINED EARNINGS
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
#ESWKUKVKQPQHPQPEQPVTQNNKPIKPVGTGUVFWTKPICOCNICOCVKQPQH
*0$(KPCPEG2.%YKVJ2TKOG(KPCPEG2.% (3,611,625) (3,912,900)
Adjusted balance as at 1st January 2022 31,574,982 39,730,900
2TQƂVHQTVJG[GCT 14,033,493 15,328,572
Other comprehensive income for the year 1,561,607 1,590,675
Transfer to other reserves (1,750,000)
(1,750,000)

6TCPUHGTQH
UWDUGSWGPVUGVVNGOGPVQHWPENCKOGFFKXKFGPFU 20,022
20,022

&KXKFGPFUVQGSWKV[JQNFGTU (4,733,141)
(4,733,141)

/GTIGTTGUGTXGCTKUKPIHTQOCOCNICOCVKQPQHUWDUKFKCT[
*0$(KPCPEG2.%CPF2TKOG(KPCPEG2.% - 6,649
2TGCOCNICOCVKQPRTQƂVQH2TKOG(KPCPEG2.% - 53,683
Balance as at 31st December 40,706,963 35,186,607 50,247,360 43,643,800
6JKUTGRTGUGPVUEWOWNCVKXGPGVGCTPKPIUKPENWUKXGQHƂPCNFKXKFGPFRTQRQUGFCOQWPVKPIVQ4U/P6JGDCNCPEGKUTGVCKPGFCPF
TGKPXGUVGFKPVJGDWUKPGUUQHVJG$CPM)TQWR
57 OTHER RESERVES
57 (a)
Bank Group
As at 31st December 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
%CRKVCNTGUGTXG=0QVG
D? 13,927,316 28,493,417
)GPGTCNTGUGTXG=0QVG
E? 58,100,000 58,100,000
(CKTXCNWGTGUGTXG=0QVG
F? (1,395,906)
(1,182,630)

.KHGRQNKE[JQNFGTTGUGTXGHWPF=0QVG
G? - (1,347,731)

4GUVTKEVGFTGIWNCVQT[TGUGTXG=0QVG
H? - 381,156
'ZEJCPIGGSWCNK\CVKQPTGUGTXG=0QVG
I? - 611,253
70,631,410 85,055,465

Eb &DSLWDO5HVHUYH
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

1VJGTEQORTGJGPUKXGKPEQOGHQTVJGRGTKQFPGVQHVCZ (1,157,240) (2,323,563)
+ORCKTOGPVEJCTIGU - -
%CRKVCNTGUGTXGTGNCVGUVQTGXCNWCVKQPUWTRNWUVJCVTGUWNVGFHTQOVJGTGXCNWCVKQPUQHHTGGJQNFNCPFCPFDWKNFKPIU
Fb*HQHUDO5HVHUYH
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000

6TCPUHGTFWTKPIVJG[GCT 1,000,000 1,000,000
)GPGTCNTGUGTXGEQORTKUGUQHVJGCOQWPVUCRRTQRTKCVGFD[VJG$QCTFQH&KTGEVQTUCUCIGPGTCNDCPMKPITGUGTXG
Gb)DLU9DOXH5HVHUYH
Bank Group
2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Balance as at 1st January (1,254,053) (1,258,039)

Transfer of fair value losses on debt instruments measured at FVOCI upon
TGENCUUKƂECVKQPVQCOQTVKUGFEQUVOGCUWTGOGPVECVGIQT[
PGVQHVCZ 1,477,057 2,181,042
0GVEJCPIGKPHCKTXCNWGFWTKPIVJG[GCT (1,618,910)
(2,105,633)

Balance as at 31st December (1,395,906)
(1,182,630)

6JGHCKTXCNWGTGUGTXGEQORTKUGUQHPGVEJCPIGKPHCKTXCNWGQHƂPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
Hb/LIH3ROLF\+ROGHU5HVHUYH)XQG
)TQWR|
2022 2021
Rs 000 Rs 000
$CNCPEGCUCVUV,CPWCT[ (103,302)

Transfer from life policy holder reserve fund (1,244,429)

Balance as at 31st December (1,347,731)

6JGNKHGRQNKE[JQNFGTUoTGUGTXGHWPFKPENWFGUVJGHCKTXCNWGICKPU
NQUUGUTGEQTFGFWPFGTQVJGTEQORTGJGPUKXGKPEQOGCTKUKPIHTQONKHG
KPUWTCPEGTGNCVGFƂPCPEKCNCUUGVUECVGIQTKUGFCUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
FINANCIAL REPORTS
57 OTHER RESERVES (Contd.)

Ib 5HVWULFWHG5HJXODWRU\5HVHUYH
)TQWR|
2022 2021
Rs 000 Rs 000

6TCPUHGTVQ
HTQOTGUVTKEVGFTGIWNCVQT[TGUGTXG -
5HVWULFWHGUHJXODWRU\UHVHUYHʶ+1%$VVXUDQFH3/&ʻ&RPSDQ\ʼ
#URGT&KTGEVKQP0QKUUWGFD[VJG+PUWTCPEG4GIWNCVQT[%QOOKUUKQPQH5TK.CPMC
+4%5.CNNNKHGKPUWTCPEGEQORCPKGUYGTGCNNQYGFVQ
VTCPUHGTQPGQHHUWTRNWUCVVTKDWVCDNGVQRQNKE[JQNFGTUoPQPRCTVKEKRCVKPIHWPFVQUJCTGJQNFGTUoHWPFYKVJVJGCRRTQXCNQHVJG+4%5.6JKU
VTCPUHGTJCUDGGPRTGUGPVGFCUCUGRCTCVGTGUGTXGCUp4GUVTKEVGF4GIWNCVQT[4GUGTXGqWPFGTGSWKV[KPCEEQTFCPEGYKVJVJG&KTGEVKQP
Jb ([FKDQJH(TXDOL]DWLRQ5HVHUYH
)TQWR|
2022 2021
Rs 000 Rs 000

6TCPUHGTVQ
HTQOGZEJCPIGGSWCNK\CVKQPTGUGTXG 448,051
'ZEJCPIGGSWCNK\CVKQPTGUGTXGEQORTKUGUQHCNNHQTGKIPEWTTGPE[FKHHGTGPEGUCTKUKPIHTQOVJGVTCPUNCVKQPQHVJGƂPCPEKCNUVCVGOGPVUQHHQTGKIP
QRGTCVKQPUYKVJKPVJGLQKPVXGPVWTGITQWR
121&21752//,1*,17(5(676 b
#%%1706+0)21.+%;
0QP%QPVTQNNKPI+PVGTGUVU
0%+CTGOGCUWTGFCVVJGKTRTQRQTVKQPCVGUJCTGQHVJGCESWKTGGoUKFGPVKƂCDNGPGVCUUGVUCVVJGFCVGQH
CESWKUKVKQP%JCPIGUKPVJG)TQWRoUKPVGTGUVKPCUWDUKFKCT[VJCVFQPQVTGUWNVKPCNQUUQHEQPVTQNCTGCEEQWPVGFHQTCUGSWKV[VTCPUCEVKQPU
#EEQTFKPIN[VJG$CPMJCUPQPEQPVTQNNKPIKPVGTGUVKPVYQUWDUKFKCTKGUPCOGN[*0$#UUWTCPEG2.%
0%+QHCPF*0$(KPCPEG
0%+QH
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)TQWR|
Rs 000 Rs 000
Subsidiaries
*0$#UUWTCPEG2.% 3,895,645
*0$(KPCPEG2.% 2,899,451
6,795,096

HNB HNB Total
Assurance PLC Finance PLC
NCI percentage 40.00% 57.84%
As at 31st December 2022 Rs 000 Rs 000 Rs 000
0QPEWTTGPVCUUGVU 29,639,750 51,810,318 81,450,068

Current assets 12,058,544 1,150,938 13,209,482
0QPEWTTGPVNKCDKNKVKGU (29,293,340) (46,520,612) (75,813,952)
Current liabilities (4,013,583) (1,582,462) (5,596,045)
Net assets 8,391,371 4,858,182 13,249,553
Other adjustments 1,347,741 154,700 1,502,441
Net asset 9,739,112 5,012,882 14,751,994
Net assets attributable to NCI 3,895,645 2,899,451 6,795,096
#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.% - - -
Net assets attributable to NCI 3,895,645 2,899,451 6,795,096
For the year ended 31st December 2022 Rs 000 Rs 000 Rs 000
Revenue 18,247,007 11,097,674 29,344,681

2TQƂV 1,810,134 (526,263) 1,283,871
Other Comprehensive Income 2,217,832 (366,083) 1,851,749
7RWDOFRPSUHKHQVLYHLQFRPH
2TQƂVCNNQECVGFVQ0%+ 724,054 (304,391) 419,663
Other comprehensive income allocated to NCI 887,133 (211,742) 675,391
HNB HNB Total

Assurance PLC Finance PLC
NCI percentage
As at 31st December 2021 Rs 000 Rs 000 Rs 000
0QPEWTTGPVCUUGVU

Current assets
0QPEWTTGPVNKCDKNKVKGU

Current liabilities

Net assets
Other adjustments

Net asset
Net assets attributable to NCI
#ESWKUKVKQPQHUWDUKFKCT[VJTQWIJ*0$(KPCPEG2.%
Net assets attributable to NCI
For the year ended 31st December 2021 Rs 000 Rs 000 Rs 000
Revenue

2TQƂV
Other Comprehensive Income
7RWDOFRPSUHKHQVLYHLQFRPH
2TQƂVCNNQECVGFVQ0%+
Other comprehensive income allocated to NCI
FINANCIAL REPORTS
&217,1*(17/,$%,/,7,(6$1'&200,70(176b b
#%%1706+0)21.+%;
Commitments and Contingencies

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EQPUKUVQHƂPCPEKCNIWCTCPVGGUNGVVGTUQHETGFKVCPFQVJGTWPFTCYPEQOOKVOGPVUVQNGPF.GVVGTUQHETGFKVCPFIWCTCPVGGU
KPENWFKPI
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VJGKORQTVQTGZRQTVQHIQQFU)WCTCPVGGUCPFUVCPFD[NGVVGTUQHETGFKVECTT[CUKOKNCTETGFKVTKUMVQNQCPU1RGTCVKPINGCUGEQOOKVOGPVU
QHVJG$CPM
CUCNGUUQTCPFCUCNGUUGGCPFRGPFKPINGICNENCKOUCICKPUVVJG)TQWRCNUQHQTORCTVQHEQOOKVOGPVUQHVJG)TQWR
%QPVKPIGPVNKCDKNKVKGUCTGPQVTGEQIPKUGFKPVJGUVCVGOGPVQHƂPCPEKCNRQUKVKQPDWVCTGFKUENQUGFWPNGUUVJG[CTGTGOQVG$WVVJGUG
EQPVKPIGPVNKCDKNKVKGUFQEQPVCKPETGFKVTKUMCPFVJGTGHQTGHQTORCTVQHVJGQXGTCNNTKUMQHVJG)TQWR
#NNFKUEGTPKDNGTKUMUCTGCEEQWPVGFHQTKPFGVGTOKPKPIVJGCOQWPVQHCNNMPQYPNKCDKNKVKGU6JG)TQWRoUUJCTGQHCP[EQPVKPIGPEKGUCPF
capital commitments of a subsidiary or joint venture for which the Group is also liable severally or otherwise are also included with
appropriate disclosures.
Financial Guarantees
(KPCPEKCNIWCTCPVGGUCTGKPKVKCNN[TGEQIPKUGFKPVJGƂPCPEKCNUVCVGOGPVUYKVJKPQVJGTNKCDKNKVKGUCVHCKTXCNWGDGKPIVJGRTGOKWOTGEGKXGF
5WDUGSWGPVVQKPKVKCNTGEQIPKVKQPVJG)TQWRoUNKCDKNKV[WPFGTGCEJIWCTCPVGGKUOGCUWTGFCVVJGJKIJGTQHVJGCOQWPVKPKVKCNN[TGEQIPKUGF
NGUUEWOWNCVKXGCOQTVKUCVKQPTGEQIPKUGFKPVJGKPEQOGUVCVGOGPVCPFVJGDGUVGUVKOCVGQHGZRGPFKVWTGTGSWKTGFVQUGVVNGCP[ƂPCPEKCN
QDNKICVKQPCTKUKPICUCTGUWNVQHVJGIWCTCPVGG'ZRGEVGFETGFKVNQUURTQXKUKQPUTGEQIPKUGFHQTUCOGCTGUGVQWVKP0QVG
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VJGKPEQOGUVCVGOGPVKPpPGVHGGCPFEQOOKUUKQPKPEQOGqQPCUVTCKIJVNKPGDCUKUQXGTVJGNKHGQHVJGIWCTCPVGG
0QOCVGTKCNNQUUGUCTGCPVKEKRCVGFCUCTGUWNVQHVJGUGEQOOKVOGPVUCPFEQPVKPIGPEKGU
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QRGTCVKQP#UCTGUWNVKVKUKPXQNXGFKPXCTKQWUNKVKICVKQPUCPFTGIWNCVQT[KPXGUVKICVKQPUCPFRTQEGGFKPIUCTKUKPIKPVJGQTFKPCT[EQWTUG
QHVJGDWUKPGUU9JGPVJG)TQWRECPTGNKCDN[OGCUWTGVJGQWVƃQYQHGEQPQOKEDGPGƂVUKPTGNCVKQPVQCURGEKƂEECUGCPFUWEJQWVƃQYU
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EQPƂTOGFQPN[D[WPEGTVCKPHWVWTGGXGPVUQTRTGUGPVQDNKICVKQPUYJGTGVJGVTCPUHGTQHGEQPQOKEDGPGƂVKUPQVRTQDCDNGQTECPPQVDG
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remote.

Db&RQWLQJHQW/LDELOLWLHVDQG&RPPLWPHQWV%DQN*URXS

Rs 000 Rs 000

Guarantees 109,352,321
Acceptances 6,758,569
$KNNUHQTEQNNGEVKQP 30,593,348
(QTYCTFGZEJCPIGEQPVTCEVU
(QTYCTFGZEJCPIGUCNGU 2,310,116
(QTYCTFGZEJCPIGRWTEJCUGU 16,891,372
%JGSWGUUGPVQPENGCTKPI 5,549,168
%QOOKVOGPVUHQTWPWVKNKUGFHCEKNKVKGUFKTGEV 250,332,701
%QOOKVOGPVUHQTWPWVKNKUGFHCEKNKVKGUKPFKTGEV 366,314,552
809,328,957
59 (b) Capital Commitments

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/P
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Rs 000 Rs 000
Approved and contracted but not provided for 721,488

Approved and not contracted for 933,708
1,655,196
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6JG$CPMJCUHQTOCNEQPVTQNUCPFRQNKEKGUKPRNCEGHQTOCPCIKPINGICNENCKOU1PEGRTQHGUUKQPCNCFXKEGJCUDGGPQDVCKPGFCPFVJGCOQWPVQH
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59 (d) Tax Assessments

59 (d) i Tax assessments against the bank
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XCNWGQH4U/PQP2#;'HQTVJG;#TGEGKXGFD[VJG$CPMCTGQWVUVCPFKPICPFJCXGDGGPFWN[CRRGCNGF
59 (d) ii Tax assessments against Group entity - HNB Assurance PLC (HNBA)
#UUGUUOGPVUVQVJGXCNWGQH4U/PQP8#6QPTGKPUWTCPEGENCKOUCPFEQOOKUUKQPU
TGNCVKPIVQ;#CUUGUUOGPVUVQVJGXCNWGQH
4U/PQP8#6CPF0$6QPƂPCPEKCNUGTXKEGU
TGNCVKPIVQCPFCUUGUUOGPVUVQVJGXCNWGQH4U/P
QP8#6CUUGUUOGPVUVQVJGXCNWGQH4U/PQP+PEQOGVCZ
TGNCVKPIVQ;#
CPFTGEGKXGFD[*0$#CTGQWVUVCPFKPICPFJCXGDGGPFWN[CRRGCNGF
FINANCIAL REPORTS
60 RELATED PARTY DISCLOSURES

6JG)TQWRECTTKGUQWVVTCPUCEVKQPUYKVJRCTVKGUYJQCTGFGƂPGFCUTGNCVGFRCTVKGUKPVJG5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp4GNCVGF
RCTV[FKUENQUWTGUqKPVJGQTFKPCT[EQWTUGQHKVUDWUKPGUU6JGFGVCKNUQHUWEJVTCPUCEVKQPUCTGTGRQTVGFDGNQY6JGRTKEKPICRRNKECDNGVQUWEJ
VTCPUCEVKQPUKUDCUGFQPVJGCUUGUUOGPVQHTKUMCPFRTKEKPIOQFGNQHVJG$CPMCPFKUEQORCTCDNGYKVJYJCVKUCRRNKGFVQVTCPUCEVKQPUDGVYGGP
VJG$CPMCPFKVUWPTGNCVGFEWUVQOGTU
Db3DUHQWDQGXOWLPDWHFRQWUROOLQJSDUW\
6JG$CPMFQGUPQVJCXGCPKFGPVKƂCDNGRCTGPVQHKVUQYP
Eb7UDQVDFWLRQVZLWK.H\0DQDJHPHQW3HUVRQQHO.03

#EEQTFKPIVQ5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp4GNCVGFRCTV[FKUENQUWTGUq-G[/CPCIGOGPV2GTUQPPGN
-/2CTGVJQUGJCXKPI
CWVJQTKV[CPFTGURQPUKDKNKV[HQTRNCPPKPIFKTGEVKPICPFEQPVTQNNKPIVJGCEVKXKVKGUQHVJGGPVKV[
#EEQTFKPIN[VJG$CPMoU-/2KPENWFGVJG$QCTFQH&KTGEVQTU
KPENWFKPIGZGEWVKXGCPFPQPGZGEWVKXGFKTGEVQTUCPFUGNGEVGFMG[GORNQ[GGUYJQ
meet the above criteria.
Key Management Personnel (KMP) of the Group

$CPMKUVJGWNVKOCVGRCTGPVQHKVUUWDUKFKCTKGUNKUVGFQWVKP0QVGVQVJGƂPCPEKCNUVCVGOGPVU6JWUVJG-/2UQHVJG$CPMJCXGVJGCWVJQTKV[
CPFTGURQPUKDKNKV[HQTRNCPPKPIFKTGEVKPICPFEQPVTQNNKPIVJGCEVKXKVKGUQHVJG)TQWRCPFJCXGDGGPKFGPVKƂGFCU-/2UQHVJG)TQWRCUYGNN
%NQUG(COKN[/GODGTU
%(/UQH-/2UCTGVJQUGHCOKN[OGODGTUYJQOC[DGGZRGEVGFVQKPƃWGPEGQTDGKPƃWGPEGFD[VJCV-/2KPVJGKT
FGCNKPIUYKVJVJGGPVKV[%(/UOC[KPENWFGVJGFQOGUVKERCTVPGTCPFEJKNFTGPQH-/2VJGEJKNFTGPQH-/2oUFQOGUVKERCTVPGTCPFFGRGPFGPVU
QH-/2CPFVJG-/2oUFQOGUVKERCTVPGT
60 (b) i Compensation to KMP
Bank Group
)RUWKH\HDUHQGHGVW'HFHPEHUb 2022 bb 2022 bb
Rs 000 Rs 000 Rs 000 Rs 000
5JQTVVGTOGORNQ[GGDGPGƂVU 192,219 196,289

2QUVGORNQ[OGPVDGPGƂVU 2,766 2,766
194,985 199,055
60 (b) ii Transactions, Arrangements and Agreements Involving Key Management Personnel (KMPs) and their Close Family Members (CFMs)
Statement of Financial Position - Bank
Closing Balance $YHUDJH%DODQFH

$VDWVW'HFHPEHUb 2022 bb 2022 bb
Rs 000 Rs 000 Rs 000 Rs 000
Assets
NQCPUCPFCFXCPEGUVQEWUVQOGTU 358,464 232,073
358,464 232,073
Liabilities
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU - 124,430
Debt securities issued and subordinated term debts - -
1,448,703 1,246,637

Closing Balance
Rs 000 Rs 000
Commitments for unutilised facilities

Direct 365,199
365,199
'LUHFWDQGLQGLUHFWDFFRPPRGDWLRQʶ%DQN

Rs 000 Rs 000
&KTGEVCPFKPFKTGEVCEEQOOQFCVKQPCUCRGTEGPVCIGQHVJG$CPMoUTGIWNCVQT[ECRKVCN 0.01%
Income Statement - Bank

Rs 000 Rs 000
Interest income 20,843

Interest expenses 92,849
GZRGPUGU 416 100
Number of shares held by KMP

Rs 000 Rs 000
8QVKPI 140,921

0QP8QVKPI 65,237
%CUJFKXKFGPFURCKFVQ-/2COQWPVVQ4U/PKP
4U
60 (b) iii Transactions, Arrangements and Agreements with Entities which are Controlled and/or Jointly Controlled by the KMP or their Close Family Members
(CFMs)

Rs 000 Rs 000 Rs 000 Rs 000
Assets
150,907 132,992
Liabilities
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 6,472 5,670
6,472 5,670
FINANCIAL REPORTS
60 RELATED PARTY DISCLOSURES (Contd.)

Closing Balance
Rs 000 Rs 000

Direct 20,240
Indirect 50,000
70,240

Rs 000 Rs 000

Interest expenses 37
GZRGPUGU 8,251
60 (c) Transactions with Group Entities

6JGITQWRGPVKVKGUKPENWFGUWDUKFKCTKGUCPFLQKPVXGPVWTGQHVJG$CPM
60 (c) i Transactions with Subsidiaries


Rs 000 Rs 000 Rs 000 Rs 000
Assets
NQCPUCPFCFXCPEGUVQEWUVQOGTU 1,234,263 1,009,855
Other assets 266,273 441,090
1,500,536 1,450,945
Liabilities
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU - 1,644,000
Debt securities issued and subordinated term debt 233,618 233,618
4,458,654 5,754,241

Closing Balance
Rs 000 Rs 000
Guarantees 227,410

Direct 818,180
1,045,590

Rs 000 Rs 000

GZRGPUGU 522,239
Other income 320,625
Other expenses 906,634
Other transactions
'ZRGPUGUTGKODWTUGFVQVJGDCPM 44,562
'ZRGPUGUTGKODWTUGFD[VJGDCPM 88,112
Insurance claims received 35,261
60 (c) ii Transactions with the Joint Venture


Rs 000 Rs 000 Rs 000 Rs 000
Assets
296,772 521,534
Liabilities
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 129,746 305,118
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 194,200 217,910
323,946 523,028
FINANCIAL REPORTS

Closing Balance
Rs 000 Rs 000
.GVVGTQH)WCTCPVGGU 29,000
Direct 3,969,500
Indirect 38,200
4,036,700

Rs 000 Rs 000
GZRGPUGU 14,403
Other expenses 1,791
'ZRGPUGUTGKODWTUGFVQVJGDCPM 83 125
G 7UDQVDFWLRQVZLWK3RVW(PSOR\PHQW%HQȞW3ODQVRIWKH%DQN

Rs 000 Rs 000 Rs 000 Rs 000
Liabilities
Debt securities issued and subordinated term debts 130,159 130,159
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 854,000 2,578,810
17,605,051 11,439,083
Equity
Stated capital 61,550 60,464
61,550 60,464

Rs 000 Rs 000
Interest expenses 2,598,658
Other transactions
Dividends paid 8,238
Contributions made 2,496,520
1XPEHURIVKDUHVKHOGE\SRVWHPSOR\PHQWEHQH̍WSODQVRIWKH%DQN

8QVKPI 162,230
0QPXQVKPI 770,799

H 7UDQVDFWLRQVZLWK*RYHUQPHQWRI6UL/DQND(QWLWLHV&RQWUROOHG-RLQWO\&RQWUROOHG6LJQĽFDQWO\,Q̍XHQFHGE\WKH*RYHUQPHQWRI6UL
Lanka
6JG)QXGTPOGPVQH5TK.CPMCKPFKTGEVN[JQNFUQHVJGXQVKPITKIJVUQHVJG$CPMCUCVUV&GEGODGT
VJTQWIJ5TK
.CPMC+PUWTCPEG%QTRQTCVKQP.VF'ORNQ[GGU2TQXKFGPV(WPF0CVKQPCN5CXKPIU$CPMCPF'ORNQ[GGU6TWUV(WPF#EEQTFKPIN[VJG$CPMJCU
EQPUKFGTGF)QXGTPOGPVQH5TK.CPMCCPFQVJGTGPVKVKGUYJKEJCTGEQPVTQNNGFLQKPVN[EQPVTQNNGFQTUKIPKƂECPVN[KPƃWGPEGFD[VJG)QXGTPOGPV
QH5TK.CPMC
IQXGTPOGPVTGNCVGFGPVKVKGUCUTGNCVGFRCTVKGUCEEQTFKPIVQ5TK.CPMC#EEQWPVKPI5VCPFCTF.-#5QPp4GNCVGF2CTV[
&KUENQUWTGUq
&WTKPIVJG[GCTGPFGFUV&GEGODGTVJG$CPMJCUECTTKGFQWVVTCPUCEVKQPUYKVJVJG)QXGTPOGPVQH5TK.CPMCCPFQVJGTIQXGTPOGPV
TGNCVGFGPVKVKGUKPVJGQTFKPCT[EQWTUGQHKVUDWUKPGUUVJGFGVCKNUQHYJKEJCTGIKXGPDGNQY6JGRTKEKPICRRNKECDNGVQUWEJVTCPUCEVKQPUYCU
DCUGFQPVJGCUUGUUOGPVQHTKUMCPFRTKEKPIOQFGNQHVJG$CPMCPFYCUEQORCTCDNGYKVJYJCVYCUCRRNKGFVQVTCPUCEVKQPUDGVYGGPVJG$CPM
and its unrelated customers.

Rs 000 Rs 000 Rs 000 Rs 000
Assets
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC 32,344,341 28,613,126
4GXGTUGTGRWTEJCUGCITGGOGPVU - -
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTKPUVTWOGPVU 446,166,752 379,549,578
income - 48,697,783
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 496 2,713
customers 65,104,081 60,334,266
543,615,670 517,197,466
Liabilities
&WGVQDCPMU 9,029,991 11,604,699
&GDVUGEWTKVKGUKUUWGF5WDQTFKPCVGFVGTOFGDVU 10,464,091 10,464,091
Current tax liabilities 30,025,919 23,183,496
64,650,601 60,432,097
Closing Balance
Rs 000 Rs 000
)RUZDUGIRUHLJQH[FKDQJHFRQWUDFWV
Sales -
Purchases 10,400,143
Guarantee 1,846,960

Direct 8,732,084
Indirect 10,351,970
FINANCIAL REPORTS

I 7UDQVDFWLRQVZLWK*RYHUQPHQWRI6UL/DQND(QWLWLHV&RQWUROOHG-RLQWO\&RQWUROOHG6LJQĽFDQWO\,Q̍XHQFHGE\WKH*RYHUQPHQWRI
Sri Lanka

Rs 000 Rs 000

Interest expenses 2,913,094
GZRGPUGU 112,749
Other income 225,440
+ORCKTOGPVEJCTIG
TGXGTUCNHQTNQCPUCPFQVJGTNQUUGU 272,500
6CZGZRGPUGU
KPEQOGVCZƂPCPEKCNUGTXKEGU8#6ETQRKPUWTCPEGNGX[NQECNVCZGUCPFUVCORFWV[ 30,880,002
1XPEHURI6KDUHVKHOGE\*RYHUQPHQW
8QVKPI 110,928,493

0QPXQVKPI 1,609,933
%CUJFKXKFGPFURCKFVQIQXGTPOGPVTGNCVGFGPVKVKGUCOQWPVUVQ4U/PKP
4U/P
7UDQVDFWLRQVZKLFKDUHQRWLQGLYLGXDOO\VLJQL̍FDQW
#RCTVHTQOVJGVTCPUCEVKQPUNKUVGFCDQXGVJG$CPMJCUECTTKGFQWVVTCPUCEVKQPUYKVJVJG)QXGTPOGPVQH5TK.CPMCCPFQVJGTIQXGTPOGPV
TGNCVGFGPVKVKGUKPVJGHQTOQHWVKNKV[DKNNUVGNGRJQPGEJCTIGU%4+$EJCTIGUGVE6JGVQVCNQHUWEJRC[OGPVUOCFGFWTKPIVJG[GCTGPFGFUV
&GEGODGTYCU4U/P
4U/P
60 (g) Disclosure Requirement under Section 9.3.2 (a) and section 9.3.2 (b) of the Listing Rules of Colombo Stock Exchange (CSE)
• Recurrent related party transactions
+PCEEQTFCPEGYKVJTWNG0Q
DVJGTGCTGPQTGEWTTGPVTGNCVGFRCTV[VTCPUCEVKQPU
NQCPUCPFCFXCPEGUYJKEJKPCIITGICVGGZEGGFUOQTG
VJCPQHVJGITQUUTGXGPWGQHVJG$CPM
• Non-recurrent related party transactions

+PCEEQTFCPEGYKVJTWNG0Q
CVJG$CPMFQGUPQVJCXGCP[PQPTGEWTTGPVTGNCVGFRCTV[VTCPUCEVKQPUECTTKGFQWVFWTKPIVJGƂPCPEKCN[GCT
WPFGTTGXKGYYKVJCXCNWGGZEGGFKPIQHVJGGSWKV[QTQHVJGVQVCNCUUGVUYJKEJGXGTKUNQYGTCURGTVJGCWFKVGFƂPCPEKCNUVCVGOGPVUQH
VJG$CPM

61 MATURITY ANALYSIS
Db$VDWVW'HFHPEHU
Bank Group
Within More than Total Within More than Total
12 months 12 months 12 months 12 months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
ASSETS
%CUJCPFECUJGSWKXCNGPVU 80,238,881 - 80,238,881 80,629,698 - 80,629,698
2NCEGOGPVUYKVJDCPMU 54,371,028 - 54,371,028 56,093,356 2,078,690 58,172,046
$CNCPEGUYKVJEGPVTCNDCPMU - 32,344,341 32,344,341 - 32,344,341 32,344,341
4GXGTUGTGRWTEJCUGCITGGOGPVU - - - 1,380,579 - 1,380,579
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 - 5,370,501 5,370,501 - 5,370,501
(KPCPEKCNCUUGVUTGEQIPKUGFVJTQWIJ
RTQƂVQTNQUU/GCUWTGFCVHCKTXCNWG 111,617 - 111,617 236,178 - 236,178
NQCPUCPFCFXCPEGU 542,404,109 431,727,143 974,131,252 568,947,561 445,571,378 1,014,518,939
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG - 2,706,660 2,706,660 562,682 5,499,513 6,062,195
Investment in joint venture - 755,000 755,000 - 3,650,354 3,650,354
Investment in subsidiaries - 3,017,285 3,017,285 - - -
Investment properties - 464,439 464,439 - 935,549 935,549
2TQRGTV[RNCPVCPFGSWKROGPV - 24,835,729 24,835,729 - 49,616,338 49,616,338
4KIJVQHWUGCUUGVU 741,208 4,656,526 5,397,734 59,279 2,404,509 2,463,788
+PVCPIKDNGCUUGVUCPFIQQFYKNN - 1,250,154 1,250,154 - 1,771,092 1,771,092
Deferred tax assets - 30,471,351 30,471,351 - 30,763,166 30,763,166
Other assets 10,013,756 16,267,362 26,281,118 13,945,616 16,627,756 30,573,372
Total assets 1,000,334,498 690,204,466 1,690,538,964 1,049,313,451 748,961,700 1,798,275,151
LIABILITIES
&WGVQDCPMU 4,533,317 1,571,261 6,104,578 4,533,317 1,571,261 6,104,578
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 25,632 - 25,632 25,632 - 25,632
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 6,540,014 - 6,540,014 6,540,014 - 6,540,014
FWGVQFGRQUKVQTU 1,281,852,060 125,948,432 1,407,800,492 1,305,917,109 137,262,012 1,443,179,121
Dividends payable 1,008,325 - 1,008,325 1,038,542 - 1,038,542
QVJGTDQTTQYKPIU 8,733,367 23,617,227 32,350,594 9,768,371 26,010,835 35,779,206
Debt securities issued 1,978,910 84,040 2,062,950 1,981,380 606,979 2,588,359
Current tax liabilities 30,025,919 - 30,025,919 30,460,242 - 30,460,242
Deferred tax liabilities - - - - 6,465,029 6,465,029
+PUWTCPEGRTQXKUKQPNKHG - - - 219,012 24,373,391 24,592,403
+PUWTCPEGRTQXKUKQPIGPGTCN - - - 4,124,529 57,059 4,181,588
Other provisions 5,000,513 - 5,000,513 5,467,274 - 5,467,274
Other liabilities 10,204,501 7,173,769 17,378,270 13,983,655 4,058,140 18,041,795
Subordinated term debts 4,720,996 18,193,303 22,914,299 4,724,800 18,999,642 23,724,442
6QVCNUJCTGJQNFGTUoGSWKV[ - 159,327,378 159,327,378 - 183,291,830 183,291,830
0QPEQPVTQNNKPIKPVGTGUVU - - - - 6,795,096 6,795,096
Total equity and liabilities 1,354,623,554 335,915,410 1,690,538,964 1,388,783,877 409,491,274 1,798,275,151
/CVWTKV[ICR (354,289,056) 354,289,056 (339,470,426) 339,470,426
%WOWNCVKXGICR (354,289,056) - (339,470,426) -
FINANCIAL REPORTS
61 MATURITY ANALYSIS (Contd.)

61 (b) As at 31st December 2021
Bank Group
Within More than Total Within More than Total
12 months 12 months 12 months 12 months
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
ASSETS
2NCEGOGPVUYKVJDCPMU
$CNCPEGUYKVJEGPVTCNDCPMU
Measured at fair value
(KPCPEKCNCUUGVUCVCOQTVKUGFEQUVNQCPUCPF
advances
(KPCPEKCNCUUGVUCVCOQTVKUGFEQUVFGDVCPFQVJGT
instruments
other comprehensive income
Investment in joint venture
Investment in subsidiaries
Investment properties
2TQRGTV[RNCPVCPFGSWKROGPV
4KIJVQHWUGCUUGVU
+PVCPIKDNGCUUGVUCPFIQQFYKNN
Deferred tax assets
Other assets
Total assets
LIABILITIES
&WGVQDCPMU
(KPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVFWGVQ
depositors
Dividends payable
(KPCPEKCNNKCDKNKVKGUCVCOQTVKUGFEQUVQVJGT
DQTTQYKPIU
Current tax liabilities
Deferred tax liabilities
+PUWTCPEGRTQXKUKQPNKHG
+PUWTCPEGRTQXKUKQPIGPGTCN
Other provisions
Other liabilities
6QVCNUJCTGJQNFGTUoGSWKV[
0QPEQPVTQNNKPIKPVGTGUVU
Total liabilities
/CVWTKV[ICR

%WOWNCVKXGICR


6(*0(175(3257,1* b b
#%%1706+0)21.+%;
#PQRGTCVKPIUGIOGPVKUCEQORQPGPVQHVJG)TQWRVJCVGPICIGUKPDWUKPGUUCEVKXKVKGUHTQOYJKEJKVOC[GCTPTGXGPWGUCPFKPEWT
GZRGPUGUKPENWFKPITGXGPWGUCPFGZRGPUGUVJCVTGNCVGVQVTCPUCEVKQPUYKVJCP[QHVJG)TQWRoUQVJGTEQORQPGPVUYJQUGQRGTCVKPI
TGUWNVUCTGTGXKGYGFTGIWNCTN[D[VJGEJKGHQRGTCVKPIFGEKUKQPOCMGTVQOCMGFGEKUKQPUCDQWVTGUQWTEGUCNNQECVGFVQGCEJUGIOGPV
CUUGUUKVURGTHQTOCPEGCPFHQTYJKEJFKUETGVGƂPCPEKCNKPHQTOCVKQPKUCXCKNCDNG
/CPCIGOGPVOQPKVQTUVJGQRGTCVKPITGUWNVUQHKVUDWUKPGUUWPKVUUGRCTCVGN[HQTVJGRWTRQUGQHOCMKPIFGEKUKQPUCDQWVTGUQWTEG
CNNQECVKQPCPFRGTHQTOCPEGCUUGUUOGPV7PCNNQECVGFKVGOUEQORTKUGOCKPN[QHEQTRQTCVGCUUGVUGZRGPUGUVCZCUUGVUCPFNKCDKNKVKGU
D %DVLVIRU6HJPHQWDWLRQb
)TQWRoUCEVKXKVKGUJCXGDGGPUGITGICVGFKPVQGKIJVFKHHGTGPVUGIOGPVUDCUGFQPVJGDWUKPGUUCEVKXKVKGUVJCVGCEJWPKVKUGPICIGFHQTVJG
RWTRQUGQHTGXKGYKPIVJGQRGTCVKPITGUWNVUQHVJG)TQWRCUYGNNCUVQOCMGFGEKUKQPUCDQWVTGUQWTEGCNNQECVKQP6JGQRGTCVKPITGUWNVUQHVJG
$CPMKUURNKVDGVYGGPEQTRQTCVGTGVCKN5/'OKETQCPFVTGCUWT[4GCNGUVCVGKPUWTCPEGCPF0$(+TGRTGUGPVVJGQRGTCVKPITGUWNVUCPFƂPCPEKCN
RQUKVKQPQHVJGUWDUKFKCTKGU5KVJOC&GXGNQROGPV
2XV.VF*0$#UUWTCPEG2.%CPF*0$(KPCPEG2.%TGURGEVKXGN[
5GIOGPVRGTHQTOCPEGKUGXCNWCVGFDCUGFQPQRGTCVKPIKPEQOGRTQƂVUQTNQUUGUYJKEJKPEGTVCKPTGURGEVUCTGOGCUWTGFFKHHGTGPVN[HTQO
QRGTCVKPIRTQƂVUQTNQUUGUKPVJGEQPUQNKFCVGFƂPCPEKCNUVCVGOGPVU
+PVGTUGIOGPVVTCPUCEVKQPUCTGCEEQWPVGFHQTCVHCKTOCTMGVRTKEGUEJCTIGFVQKPVGTDCPMEQWPVGTRCTVUHQTUKOKNCTUGTXKEGUQPCPCTOoUNGPIVJ
basis. Such transfers are eliminated on consolidation.
+PEQOGVCZGUCTGPQVCNNQECVGFVQQRGTCVKPIUGIOGPVU1VJGTGZRGPUGUYJKEJECPPQVDGFKTGEVN[KFGPVKƂGFCICKPUVCRCTVKEWNCTDWUKPGUU
UGIOGPVJCXGDGGPVTGCVGFCUEQPUQNKFCVKQPCFLWUVOGPVU
6JG)TQWRoUOCPCIGOGPVTGXKGYUKPVGTPCNOCPCIGOGPVTGRQTVUHTQOGCEJFKXKUKQPCVNGCUVOQPVJN[
62 (b) Information about reportable segments

5GIOGPVKPHQTOCVKQPKURTGUGPVGFKPTGURGEVQHVJG)TQWRoUDWUKPGUUUGIOGPVU6JG)TQWRoURTKOCT[HQTOCVHQTUGIOGPVTGRQTVKPIKUDCUGFQP
DWUKPGUUUGIOGPVU6JGDWUKPGUUUGIOGPVUCTGFGVGTOKPGFDCUGFQPVJG)TQWRoUOCPCIGOGPVCPFKPVGTPCNTGRQTVKPIUVTWEVWTG
FINANCIAL REPORTS
62 SEGMENT REPORTING (Contd.)
For the year ended 31st December Corporate Retail SME Micro
2022 2021 2022 2021 2022 2021 2022 2021
Net interest income 9,242,018 35,986,295 10,427,177 862,155
(QTGKIPGZEJCPIGKPEQOG (4,705,790) 269,586 (6,513) 3,263
Net fee and commission income 5,283,473 5,712,717 3,990,060 194,038
1VJGTQRGTCVKPIKPEQOG - - - -
Total operating income 9,819,701 41,968,598 14,410,724 1,059,456
+ORCKTOGPVEJCTIGHQTNQCPU
and other losses 19,724,214 3,539,098 7,960,907 410,403
Net operating income (9,904,513) 38,429,500 6,449,817 649,053
2TQƂVHTQOQRGTCVKQPU - - - -
5JCTGQHRTQƂVQHLQKPVXGPVWTG - - - -
Income tax expenses - - - -
0QPEQPVTQNNKPIKPVGTGUVU - - - -
1HW3UR̍WIRUWKH\HDUDWWULEXWDEOH
to equity holders of the parent company - - - -
As at 31st December 2022 2021 2022 2021 2022 2021 2022 2021
5GIOGPVCUUGVU 551,729,193 274,656,111 228,894,215 26,116,133
Investment in joint venture - - - -
Total assets 551,729,193 274,656,111 228,894,215 26,116,133
5GIOGPVNKCDKNKVKGU 258,174,870 835,246,480 260,588,569 15,851,101
Total liabilities 258,174,870 835,246,480 260,588,569 15,851,101
For the year ended 31st December 2022 2021 2022 2021 2022 2021 2022 2021
,QIRUPDWLRQRQFDVK̎RZVb
%CUJƃQYUHTQOQRGTCVKPICEVKXKVKGU 11,777,702
75,779,664 55,411,307 8,967,277
%CUJƃQYUHTQOKPXGUVKPICEVKXKVKGU (1,500,000)
- - -
%CUJƃQYUHTQOƂPCPEKPICEVKXKVKGU - - - -
1HWFDVK̎RZJHQHUDWHGGXULQJWKH\HDU 10,277,702
75,779,664 55,411,307 8,967,277
&DSLWDOH[SHQGLWXUHb
s2TQRGTV[RNCPVCPFGSWKROGPV - - - -
s+PVCPIKDNGCUUGVU - - - -
Total Capital Expenditure - - - -
Geographic information
6JG)TQWRHWPEVKQPUKPQPGIGQITCRJKENQECVKQP#EEQTFKPIN[IGQITCRJKEKPHQTOCVKQPKUPQVRTGUGPVGFKPVJGUGƂPCPEKCNUVCVGOGPVU
Total operating income Net Operating Income
3% 5%
7%
13%
27%
1% 30%
56%
2%
1%
10% 9%
35%
1%
Retail Insurance
Corporate Treasury SME Finance
Retail Real Estate Micro Corporate
SME Insurance Real Estate Treasury
Micro Finance

Treasury Real Estate Insurance NBFI* Eliminations/Unallocated Consolidated
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
44,744,360 165,334
4,484,745 3,415,972 2,238,488 111,566,544
4,167,927 - - - 19,418,284 19,146,757
3,921 - 272,222 455,272 (9,958)
15,901,745
73,794 1,038,607 13,441,723 571,735 (865,814) 14,260,045
48,990,002 1,203,941 18,198,690 4,442,979 20,781,000 160,875,091
58,823,539 - 31,354 1,246,157 - 91,735,672
(9,833,537) 1,203,941 18,167,336 3,196,822 20,781,000 69,139,419
- - - - - 14,088,284
- - - - - 331,973
- - - - - 1,327,978

- - - - - (419,663)

- - - - - 15,328,572
2022 2021 2022 2021 2022 2021 2022 2021 2022 2022 2022 2021
573,212,402 10,970,479 41,698,294 52,961,257 34,386,713 1,794,624,797
- - - - 3,650,354 3,650,354
573,212,402 10,970,479 41,698,294 52,961,257 38,037,067 1,798,275,151
7,028,292 10,970,479 41,698,294 52,961,257 315,755,809 1,798,275,151
7,028,292 10,970,479 41,698,294 52,961,257 315,755,809 1,798,275,151
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2021 2020
15,940,347
647,987 1,941,282 3,077,562 (31,561,841)
141,981,287

(33,860,569) (900,454)
(2,531,942)
(3,201,534)
(6,138,018) (48,132,517)
- - (642,654)
(359,940)
(1,316,077)
(2,318,671)

(17,920,222) (252,467)
(1,233,314) (483,912)
(39,015,936)
91,530,099
- -
(218,651)
(86,937)
(1,165,910)
(1,471,498)

- - (17,706)
(42,381)
(225,426)
(285,513)

- -
(236,357)
(129,318)
(1,391,336)
(1,757,011)

Segment assets -i}iÌ>LÌiÃČ

3%
2% 3% 1% 4%
1% 1% 17%
31% 1%
33% 18%
1% 16% 55%
13%
Corporate Treasury Corporate Treasury

Retail Real Estate Retail Real Estate
SME Insurance SME Insurance
Micro Finance Micro Finance
FINANCIAL REPORTS
63 NET ASSETS VALUE PER ORDINARY SHARE
Bank Group
Rs 000 Rs 000 Rs 000 Rs 000
Amount used as the numerator:

'SWKV[JQNFGTUHWPFU
4U 159,327,378 183,291,830
Number of ordinary shares used as the denominator:
6QVCNPWODGTQHUJCTGU
n=0QVG
E? 535,555 535,555
1HWDVVHWVYDOXHSHURUGLQDU\VKDUH5V 297.50 283.89 342.25 329.88
*Number of shares used in net assets value per ordinary share calculation of 2021 has been adjusted by the number of shares issued as scrip
dividends in 2022.
64 EVENTS OCCURRING AFTER THE REPORTING PERIOD

'XGPVUCHVGTVJGTGRQTVKPIRGTKQFCTGVJQUGGXGPVUHCXQWTCDNGCPFWPHCXQWTCDNGVJCVQEEWTDGVYGGPVJGTGRQTVKPIFCVGCPFVJGFCVGVJG
ƂPCPEKCNUVCVGOGPVUCTGCWVJQTKUGFHQTKUUWG
6JGTGCTGPQGXGPVUQEEWTTKPICHVGTVJGTGRQTVKPIFCVGYJKEJTGSWKTGCFLWUVOGPVUVQQTFKUENQUWTGKPVJGƂPCPEKCNUVCVGOGPVUQVJGTVJCPVJQUG
FKUENQUGFDGNQY
Db3URSRVHG'LYLGHQGV
4GHGT0QVG
b &203$5$7,9(,1)250$7,21
6JGRTGUGPVCVKQPCPFENCUUKƂECVKQPQHKVGOURTGUGPVGFKPKPEQOGUVCVGOGPVCPFUVCVGOGPVQHƂPCPEKCNRQUKVKQPKPJCUPQVDGGPCOGPFGF
FWTKPIVJGEWTTGPV[GCT*QYGXGTVJGRTGUGPVCVKQPCPFENCUUKƂECVKQPQHKVGOURTGUGPVGFKPPQVGUVQVJGƂPCPEKCNUVCVGOGPVJCXGDGGP
amended wherever necessary to ensure comparability with the current year.
b ',5(&7256ʹ5(63216,%,/,7<67$7(0(17
6JG$QCTFQH&KTGEVQTUQHVJG$CPMKUTGURQPUKDNGHQTVJGRTGRCTCVKQPCPFRTGUGPVCVKQPQHVJGUGƂPCPEKCNUVCVGOGPVU
2NGCUGTGHGTRCIGVQHQTVJGUVCVGOGPVQHVJGFKTGEVQTUoTGURQPUKDKNKV[HQTƂPCPEKCNTGRQTVKPI

SUPPLEMENTARY
INFORMATION
/CTMGV&KUEKRNKPGs&KUENQUWTG4GSWKTGOGPVU7PFGT2KNNCT+++ 436 GRI Index 482
(KPCPEKCN5VCVGOGPVU
75&QNNCTU 459 5WUVCKPCDKNKV[&KUENQUWTG6QRKEU#EEQWPVKPI/GVTKEU 486
5QWTEGUCPF7VKNKUCVKQPQH+PEQOG 462 )NQUUCT[QH(KPCPEKCN$CPMKPI6GTOU 487
Value Added Statement 463 1WT$TCPEJ5OCTV5GNH5GTXKEG/CEJKPG
55/0GVYQTM 494
8CNWG%TGCVGFVQ5VCMGJQNFGTU 464 0QVKEGQH/GGVKPI 496
Ten Year Statistical Summary 465 (QTOQH2TQZ[
8QVKPI 499
Quarterly Statistics 466 (QTOQH2TQZ[
0QP8QVKPI 501
Investor Relations 467 +PXGUVQT(GGFDCEM(QTO 503
Independent Assurance Statement 478 Corporate Information Inner back cover
SUPPLEMENTARY INFORMATION
MARKET DISCIPLINE-DISCLOSURE REQUIREMENTS

UNDER PILLAR III
TEMPLATE 1
Key regulatory ratios - Capital and liquidity
Bank Group
As at December 31, 2022 2021 2022 2021
5HJXODWRU\FDSLWDO5V

%QOOQPGSWKV[ 110,339,128 125,236,381
Tier 1 capital 110,339,128 125,236,381
Total capital 139,614,626 155,160,353
Regulatory capital ratios (%)

%QOOQPGSWKV[6KGTECRKVCNTCVKQ 11.06% 11.42%

OKPKOWOTGSWKTGOGPV
6KGTECRKVCNTCVKQ
OKPKOWOTGSWKTGOGPV 11.06% 11.42%
6QVCNECRKVCNTCVKQ
.GXGTCIGTCVKQ
0GVUVCDNGHWPFKPITCVKQ
OKPKOWOTGSWKTGOGPV 130.85%
Regulatory liquidity
5VCVWVQT[NKSWKFCUUGVU
4U 494,462,429
5VCVWVQT[NKSWKFCUUGVUTCVKQ
OKPKOWOTGSWKTGOGPVs
%QPUQNKFCVGF
$CPM
33.95%
&QOGUVKE$CPMKPI7PKV
31.04%
1HH5JQTG$CPMKPI7PKV
29.10%
.KSWKFKV[EQXGTCIGTCVKQs4WRGG 255.83%

OKPKOWOTGSWKTGOGPV
.KSWKFKV[EQXGTCIGTCVKQs#NNEWTTGPE[ 519.47%

OKPKOWOTGSWKTGOGPV

TEMPLATE 2
Basel III computation of capital ratios
Bank Group
As at December 31, 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Common equity Tier 1 (CET1) capital after adjustments 110,339,128 125,236,381
Total common equity Tier 1 (CET1) capital 148,633,241 163,216,182
'SWKV[ECRKVCN
UVCVGFECRKVCN#UUKIPGF%CRKVCN 38,679,005 38,679,005
Reserve fund 9,310,000 9,310,000
2WDNKUJGFTGVCKPGFGCTPKPIU
#EEWOWNCVGFTGVCKPGFNQUUGU 40,600,740 50,141,139
2WDNKUJGFCEEWOWNCVGFQVJGTEQORTGJGPUKXGKPEQOG
1%+ 1,943,496
994,315

General and other disclosed reserves 58,100,000 57,296,627
7PRWDNKUJGFEWTTGPV[GCT URTQƂV
NQUUGUCPFICKPUTGƃGEVGFKP1%+ - -
1TFKPCT[UJCTGUKUUWGFD[EQPUQNKFCVGFDCPMKPICPFƂPCPEKCNUWDUKFKCTKGU - 6,795,096
QHVJG$CPMCPFJGNFD[VJKTFRCTVKGU
Total adjustments to CET1 capital 38,294,113 37,979,801
)QQFYKNN
PGV - 181,396
+PVCPIKDNGCUUGVU
PGV 1,139,451 1,589,696
&GHGTTGFVCZCUUGVU
PGV 30,471,351 30,763,166
&GƂPGFDGPGƂVRGPUKQPHWPFCUUGVU 3,479,578 3,479,578
4GXCNWCVKQPNQUUGUQHRTQRGTV[RNCPVGSWKROGPV - -
+PXGUVOGPVUKPVJGECRKVCNQHDCPMKPICPFƂPCPEKCNKPUVKVWVKQPUYJGTGVJG 499,670 443,345
DCPMFQGUPQVQYPOQTGVJCPRGTEGPVQHVJGKUUWGFQTFKPCT[UJCTG
capital of the entity
5KIPKƂECPVKPXGUVOGPVUKPVJGECRKVCNQHƂPCPEKCNKPUVKVWVKQPUYJGTGVJG 2,704,063 1,522,620
DCPMQYPUOQTGVJCPRGTEGPVQHVJGKUUWGFQTFKPCT[UJCTGECRKVCNQH
the entity
Additional Tier 1 (AT1) capital after adjustments - -
Additional Tier 1 (AT1) capital - -
3WCNKH[KPICFFKVKQPCN6KGTECRKVCNKPUVTWOGPVU - -
+PUVTWOGPVUKUUWGFD[%QPUQNKFCVGF$CPMKPICPF(KPCPEKCN5WDUKFKCTKGUQH - -
VJG$CPMCPFJGNFD[6JKTF2CTVKGU
Total adjustments to AT1 capital - -
Investment in Own Shares - -
1VJGTU
URGEKH[ - -
Tier 2 capital after adjustments 29,275,498 29,923,972
Total Tier 2 Capital 29,275,498 29,923,972
3WCNKH[KPI6KGTECRKVCNKPUVTWOGPVU 16,104,275 15,785,044
4GXCNWCVKQPICKPU 2,090,479 2,090,479
)GPGTCNRTQXKUKQPGNKIKDNGKORCKTOGPV 11,080,745 12,048,450
+PUVTWOGPVUKUUWGFD[%QPUQNKFCVGF$CPMKPICPF(KPCPEKCN5WDUKFKCTKGUQH - -
VJG$CPMCPFJGNFD[6JKTF2CTVKGU
Total adjustments to Tier 2 capital - -
Investment in own shares - -

UNDER PILLAR III
Bank Group
As at December 31, 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
1VJGTU
URGEKH[ - -
+PXGUVOGPVUKPVJGECRKVCNQHƂPCPEKCNKPUVKVWVKQPUCPFYJGTGVJGDCPMFQGU - -
PQVQYPOQTGVJCPRGTEGPVQHVJGKUUWGFECRKVCNECTT[KPIXQVKPI
TKIJVUQHVJGKUUWKPIGPVKV[
CET1 capital 110,339,128 125,236,381
Total Tier 1 capital 110,339,128 125,236,381
Total capital 139,614,626 155,160,353
7RWDOULVNZHLJKWHGDPRXQW5:$ 997,470,892 1,096,482,202
49#UHQT%TGFKV4KUM 886,459,570 963,875,964
49#UHQT/CTMGV4KUM 14,398,617 14,566,345
49#UHQT1RGTCVKQPCN4KUM 96,612,704 118,039,893
%'6ECRKVCNTCVKQ
KPENWFKPIECRKVCNEQPUGTXCVKQPDWHHGTEQWPVGTE[ENKECN 11.06% 11.42%
ECRKVCNDWHHGTUWTEJCTIGQP&5+$U

1HYJKEJECRKVCNEQPUGTXCVKQPDWHHGT
2.50% 2.50%
1HYJKEJEQWPVGTE[ENKECNDWHHGT

1HYJKEJECRKVCNUWTEJCTIGQP&5+$U
1.00% 1.00%
Total Tier 1 capital ratio (%) 11.06% 11.42%
7RWDOFDSLWDOUDWLRLQFOXGLQJFDSLWDOFRQVHUYDWLRQEXIIHUFRXQWHUF\FOLFDO 14.00% 14.15%
FDSLWDOEXIIHU VXUFKDUJHRQ'6,%V
1HYJKEJECRKVCNEQPUGTXCVKQPDWHHGT
1.50% 1.50%
1HYJKEJEQWPVGTE[ENKECNDWHHGT

1HYJKEJECRKVCNUWTEJCTIGQP&5+$U
1.00% 1.00%
TEMPLATE 3
Leverage ratio
Bank Group
As at December 31, 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Tier 1 capital 110,339,128 125,236,381

Total exposures 1,775,343,805 1,883,394,300
1PDCNCPEGUJGGVKVGOU
GZENWFKPIFGTKXCVKXGUCPFUGEWTKVKGUƂPCPEKPI 1,642,069,382 1,750,119,877
VTCPUCEVKQPUDWVKPENWFKPIEQNNCVGTCN
Derivative exposures 30,458,098 30,458,098
5GEWTKVKGUƂPCPEKPIVTCPUCEVKQPGZRQUWTGU 11,344,982 11,344,982
1VJGTQHHDCNCPEGUJGGVGZRQUWTGU 91,471,343 91,471,343
$CUGN+++NGXGTCIGTCVKQ
6KGT6QVCNGZRQUWTG 6.22% 6.65%

OKPKOWOTGSWKTGOGPV

TEMPLATE 4
Liquidity coverage ratio (LCR) - All currency
As at December 31, 2022 2021

Total Total Total Total
8QZHLJKWHG Weighted 8QZHLJKWHG Weighted
Value Value Value Value
Rs 000 Rs 000 Rs 000 Rs 000
6QVCNUVQEMQH*KIJ3WCNKV[.KSWKF#UUGVU
*3.# 331,494,802 323,526,317
Total adjusted level 1 assets 279,336,065 279,336,065
.GXGNCUUGVU 278,545,799 278,545,799
Total adjusted level 2A assets 52,874,333 44,943,183
.GXGN#CUUGVU 52,874,333 44,943,183
6QVCNCFLWUVGFNGXGN$CUUGVU 74,670 37,335
.GXGN$CUUGVU 74,670 37,335
6QVCNECUJQWVƃQYU 1,470,420,144 236,178,117
Deposits 1,069,409,787 106,940,979
7PUGEWTGFYJQNGUCNGHWPFKPI 243,495,449 92,090,974
5GEWTGFHWPFKPIVTCPUCEVKQPU 4,124,652 -
7PFTCYPRQTVKQPQHEQOOKVVGF
KTTGXQECDNGHCEKNKVKGUCPFQVJGTEQPVKPIGPV 130,077,854 13,833,763
HWPFKPIQDNKICVKQPU
#FFKVKQPCNTGSWKTGOGPVU 23,312,402 23,312,402
6QVCNECUJKPƃQYU 315,131,003 173,897,663
/CVWTKPIUGEWTGFNGPFKPIVTCPUCEVKQPUDCEMGFD[EQNNCVGTCN - -
Committed facilities 3,000,000 -
1VJGTKPƃQYUD[EQWPVGTRCTV[YJKEJCTGOCVWTKPIYKVJKPFC[U 202,682,130 132,795,609
Operational deposits 32,495,733 -
1VJGTECUJKPƃQYU 76,953,140 41,102,054
.KSWKFKV[EQXGTCIGTCVKQ

UVQEMQHJKIJ3WCNKV[NKSWKFCUUGVUVQVCNPGV 519.47%
ECUJQWVƃQYUQXGTVJGPGZVECNGPFCTFC[U
TEMPLATE 5
Net stable funding ratio (NSFR)
Bank
Rs 000 Rs 000
6QVCNCXCKNCDNGUVCDNGHWPFKPI
#5( 1,243,182,006
4GSWKTGFUVCDNGHWPFKPIs1PDCNCPEGUJGGVCUUGVU 931,918,978
4GSWKTGFUVCDNGHWPFKPIs1HHDCNCPEGUJGGVKVGOU 18,132,061
6QVCNTGSWKTGFUVCDNGHWPFKPI
45( 950,051,040
05(4
OKPKOWOTGSWKTGOGPV 130.85%

UNDER PILLAR III
TEMPLATE 6
Main Features of Regulatory Capital Instruments
Description of the capital instrument Stated Capital Debentures - 2006 Debentures - 2016
Type F
Issuer *0$2.% *0$2.% *0$2.%

7PKSWGKFGPVKƂGT
)QXGTPKPINCY
UQHVJGKPUVTWOGPV 5TK.CPMC 5TK.CPMC 5TK.CPMC
1TKIKPCNFCVGQHKUUWCPEG Not Applicable #RTKN 0QXGODGT
Par value of instrument .-4 .-4
Perpetual or dated Perpetual Dated Dated
1TKIKPCNOCVWTKV[FCVGKHCRRNKECDNG Not Applicable /CTEJ 0QXGODGT
#OQWPVTGEQIPKUGFKPTGIWNCVQT[ECRKVCN
KP4UCUCVVJGTGRQTVKPIFCVG
#EEQWPVKPIENCUUKƂECVKQP
GSWKV[NKCDKNKV[ 'SWKV[ .KCDKNKV[ .KCDKNKV[
Issuer call subject to prior supervisory approval
1RVKQPCNECNNFCVGEQPVKPIGPVECNNFCVGUCPFTGFGORVKQPCOQWPV
4U Not Applicable Not Applicable Not Applicable
5WDUGSWGPVECNNFCVGUKHCRRNKECDNG Not Applicable Not Applicable Not Applicable
%QWRQPUFKXKFGPFU Dividends Coupons Coupons
(KZGFQTƃQCVKPIFKXKFGPFEQWRQP Not Applicable Fixed Fixed
Coupon rate and any related index RC RC
0QPEWOWNCVKXGQTEWOWNCVKXG 0QPEWOWNCVKXG Cumulative Cumulative
%QPXGTVKDNGQTPQPEQPXGTVKDNG Not Applicable Not Applicable Not Applicable
+HEQPXGTVKDNGEQPXGTUKQPVTKIIGT
U
+HEQPXGTVKDNGHWNN[QTRCTVKCNN[ Not Applicable Not Applicable Not Applicable

+HEQPXGTVKDNGOCPFCVQT[QTQRVKQPCN Not Applicable Not Applicable Not Applicable
+HEQPXGTVKDNGEQPXGTUKQPTCVG Not Applicable Not Applicable Not Applicable

'HEHQWXUHV%DVHO,,,FRPSOLDQWʶ7LHU 'HEHQWXUHV%DVHO,,,FRPSOLDQWʶ7LHU 'HEHQWXUHV%DVHO,,,FRPSOLDQWʶ7LHU
listed rated unsecured listed rated unsecured listed rated unsecured
VXERUGLQDWHGUHGHHPDEOHGHEHQWXUHVZLWKD VXERUGLQDWHGUHGHHPDEOHGHEHQWXUHVZLWKD VXERUGLQDWHGUHGHHPDEOHGHEHQWXUHVZLWKD
QRQYLDELOLW\FRQYHUVLRQ QRQYLDELOLW\FRQYHUVLRQ QRQYLDELOLW\FRQYHUVLRQ
*0$2.% *0$2.% *0$2.%
5TK.CPMC 5TK.CPMC 5TK.CPMC

5GRVGODGT 5GRVGODGT ,WN[
.-4 .-4 .-4
Dated Dated Dated
5GRVGODGT 5GRVGODGT ,WN[

.KCDKNKV[ .KCDKNKV[ .KCDKNKV[
Not Applicable Not Applicable Not Applicable

Not Applicable Not Applicable Not Applicable
Coupons Coupons Coupons
Fixed Fixed Fixed
RC RC RC
Cumulative Cumulative Cumulative
Convertible Convertible Convertible
#p6TKIIGT'XGPVqKUFGVGTOKPGFD[CPFCVVJG #p6TKIIGT'XGPVqKUFGVGTOKPGFD[CPFCVVJG #p6TKIIGT'XGPVqKUFGVGTOKPGFD[CPFCVVJG
UQNGFKUETGVKQPQHVJG/QPGVCT[$QCTFQHVJG UQNGFKUETGVKQPQHVJG/QPGVCT[$QCTFQHVJG UQNGFKUETGVKQPQHVJG/QPGVCT[$QCTFQHVJG
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KGEQPXGTUKQPQHVJG %GPVTCN$CPMQH5TK.CPMC
KGEQPXGTUKQPQHVJG
UCKF&GDGPVWTGUWRQPQEEWTTGPEGQHVJG6TKIIGT UCKF&GDGPVWTGUWRQPQEEWTTGPEGQHVJG6TKIIGT UCKF&GDGPVWTGUWRQPQEEWTTGPEGQHVJG6TKIIGT
'XGPVYKNNDGCHHGEVGFD[VJG$CPMUQNGN[WRQP 'XGPVYKNNDGCHHGEVGFD[VJG$CPMUQNGN[WRQP 'XGPVYKNNDGCHHGEVGFD[VJG$CPMUQNGN[WRQP
DGKPIKPUVTWEVGFD[VJG/QPGVCT[$QCTFQHVJG DGKPIKPUVTWEVGFD[VJG/QPGVCT[$QCTFQHVJG DGKPIKPUVTWEVGFD[VJG/QPGVCT[$QCTFQHVJG
%GPVTCN$CPMQH5TK.CPMCCPFKUFGƂPGFKPVJG %GPVTCN$CPMQH5TK.CPMCCPFKUFGƂPGFKPVJG %GPVTCN$CPMQH5TK.CPMCCPFKUFGƂPGFKPVJG
$CPMKPI#EV&KTGEVKQP0QQHQH9GD $CPMKPI#EV&KTGEVKQP0QQHQH9GD $CPMKPI#EV&KTGEVKQP0QQHQH9GD
$CUGF4GVWTP%QFG

KKK
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KKK
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$CPMYQWNFDGEQOGPQPXKCDNGKUPGEGUUCT[CU VJG$CPMYQWNFDGEQOGPQPXKCDNGKUPGEGUUCT[ VJG$CPMYQWNFDGEQOGPQPXKCDNGKUPGEGUUCT[
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Fully Fully Fully

Optional. At the discretion of the monetary Optional. At the discretion of the monetary Optional. At the discretion of the monetary
DQCTFQHVJG%GPVTCN$CPMQH5TK.CPMCWRQP DQCTFQHVJG%GPVTCN$CPMQH5TK.CPMCWRQP DQCTFQHVJG%GPVTCN$CPMQH5TK.CPMCWRQP
QEEWTCPEGQHVTKIIGTRQKPVUCUFGVCKNGFCDQXG QEEWTCPEGQHVTKIIGTRQKPVUCUFGVCKNGFCDQXG QEEWTCPEGQHVTKIIGTRQKPVUCUFGVCKNGFCDQXG
6JGRTKEGDCUGFQPVJGUKORNGCXGTCIGQHVJG 6JGRTKEGDCUGFQPVJGUKORNGCXGTCIGQHVJG 6JGRTKEGDCUGFQPVJGUKORNGCXGTCIGQHVJG
FCKN[XQNWOGQHYGKIJVGFCXGTCIGRTKEG
89#2 FCKN[XQNWOGQHYGKIJVGFCXGTCIGRTKEG
89#2 FCKN[XQNWOGQHYGKIJVGFCXGTCIGRTKEG
89#2
QHCPQTFKPCT[XQVKPIUJCTGQHVJG$CPMFWTKPI QHCPQTFKPCT[XQVKPIUJCTGQHVJG$CPMFWTKPI QHCPQTFKPCT[XQVKPIUJCTGQHVJG$CPMFWTKPI
VJGVJTGG
OQPVJURGTKQFKOOGFKCVGN[ VJGVJTGG
OQPVJURGTKQFKOOGFKCVGN[ VJGVJTGG
OQPVJURGTKQFKOOGFKCVGN[
RTGEGFKPIVJGFCVGQHVJG6TKIIGT'XGPV RTGEGFKPIVJGFCVGQHVJG6TKIIGT'XGPV RTGEGFKPIVJGFCVGQHVJG6TKIIGT'XGPV

UNDER PILLAR III
TEMPLATE 6 (Contd.)
Main Features of Regulatory Capital Instruments

Notes
#p6TKIIGT'XGPVqKUFGVGTOKPGFD[CPFCVVJGUQNGFKUETGVKQPQHVJG/QPGVCT[$QCTFQHVJG%GPVTCN$CPMQH5TK.CPMC
KGEQPXGTUKQPQHVJGUCKF
&GDGPVWTGUWRQPQEEWTTGPEGQHVJG6TKIIGT'XGPVYKNNDGCHHGEVGFD[VJG$CPMUQNGN[WRQPDGKPIKPUVTWEVGFD[VJG/QPGVCT[$QCTFQHVJG%GPVTCN
$CPMQH5TK.CPMCCPFKUFGƂPGFKPVJG$CPMKPI#EV&KTGEVKQP0QQHQH9GD$CUGF4GVWTP%QFG

KKK
CDCUCRQKPVGXGPV
DGKPIVJGGCTNKGTQHs

C #FGEKUKQPVJCVCYTKVGFQYPYKVJQWVYJKEJVJG$CPMYQWNFDGEQOGPQPXKCDNGKUPGEGUUCT[CUFGVGTOKPGFD[VJG/QPGVCT[$QCTF14

D 6JGFGEKUKQPVQOCMGCRWDNKEUGEVQTKPLGEVKQPQHECRKVCNQTGSWKXCNGPVUWRRQTVYKVJQWVYJKEJVJG$CPMYQWNFJCXGDGEQOGPQPXKCDNGCU
FGVGTOKPGFD[VJG/QPGVCT[$QCTF
1RVKQPCN#VVJGFKUETGVKQPQHVJGOQPGVCT[DQCTFQHVJG%GPVTCN$CPMQH5TK.CPMCWRQPQEEWTTGPEGQHVTKIIGTRQKPVUCUFGVCKNGFCDQXG
6JGRTKEGDCUGFQPVJGUKORNGCXGTCIGQHVJGFCKN[XQNWOGQHYGKIJVGFCXGTCIGRTKEG
89#2QHCPQTFKPCT[XQVKPIUJCTGQHVJG$CPMFWTKPIVJG
VJTGG
OQPVJURGTKQFKOOGFKCVGN[RTGEGFKPIVJGFCVGQHVJG6TKIIGT'XGPV
TEMPLATE 7
Summary discussion on adequacy/meeting current and future capital requirements

6JG$CPMoUECRKVCNCFGSWCE[TGOCKPGFCVCPFTGURGEVKXGN[CICKPUVVJGTGIWNCVQT[OKPKOWOQHCPFHQTVKGT+ECRKVCNCPFVQVCN
ECRKVCNCFGSWCE[TCVKQUTGURGEVKXGN[*QYGXGTVJG$CPMJCUVJGQRVKQPVQFTCYFQYPQPVJGECRKVCNEQPUGTXCVKQPDWHHGTQHCURGTVJGIWKFGNKPGU
KUUWGFD[VJG%GPVTCN$CPMQH5TK.CPMCYJKEJGHHGEVKXGN[GPCDNGUVQOCKPVCKPVKGT+ECRKVCNCPFVQVCNECRKVCNCFGSWCE[TCVKQUCVCPFTGURGEVKXGN[
#EEQTFKPIN[CVRTGUGPV*0$JCUCNGGYC[KPVGTOUQHKVUECRKVCNNGXGN
*0$JCUDWKNVKPUK\GCDNGKORCKTOGPVQHYKVJTGICTFVQKVUKPXGUVOGPVUKPHQTGKIPEWTTGPE[FGPQOKPCVGFIQXGTPOGPVUGEWTKVKGU(KPCNKUCVKQPQHVJG
FGDVTGUVTWEVWTKPIRTQITCOOGQHVJGIQXGTPOGPVYQWNFDGCMG[FGVGTOKPCPVYKVJTGICTFVQVJGHWVWTGECRKVCNTGSWKTGOGPVU
6JGQRVKQPUCXCKNCDNGYKVJTGICTFVQECRKVCNTCKUKPIKPENWFGTKIJVUKUUWGFGDGPVWTGKUUWG
HQTVKGT++ECRKVCNFKURQUCNQHECRKVCNKPGHƂEKGPVKPXGUVOGPVUVQ
HTGGWRECRKVCNCPFEQPVCKPKPIVJGNQCPDQQMITQYVJ+PVJGGXGPVVJGTGKUCTGSWKTGOGPVVJG$CPMYKNNEQPUKFGTVJGOQUVHGCUKDNGQRVKQPCVVJGVKOG

TEMPLATE 8
Credit risk under standardised approach
Credit risk exposures and credit risk mitigation (CRM) effects - Bank
As at December 31, 2022 Bank

Exposures before Credit Exposures post CCF and CRM RWA and RWA Density (%)
&RQYHUVLRQ)DFWRU&&)DQG
CRM
On-balance Off-Balance On-balance Off-Balance RWA (e) RWA
sheet Sheet sheet Sheet Density
amount (a) Amount (b) amount (c) Amount (d) {e/(c+d)}
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 (%)
%NCKOUQP%GPVTCN)QXGTPOGPVCPF%$5.
%NCKOUQPHQTGKIPUQXGTGKIPUCPFVJGKT%GPVTCN$CPMU
%NCKOUQP2WDNKE5GEVQT'PVKVKGU
25'U
%NCKOUQP1HƂEKCN'PVKVKGUCPF/WNVKNCVGTCN

&GXGNQROGPV$CPMU
/&$U
%NCKOUQP$CPMU'ZRQUWTGU 0.28
Claims on Financial Institutions
Claims on Corporates 0.91
Retail Claims
Claims Secured by Residential property 0.52
Claims Secured by Commercial Real Estate
0QP2GTHQTOKPI#UUGVU
02#U
K 1.07
*KIJGTTKUM%CVGIQTKGU 2.50
Cash items and Other Assets 0.55
Total

UNDER PILLAR III
TEMPLATE 8 (Contd.)
Credit risk exposures and credit risk mitigation (CRM) effects - Group
As at December 31, 2022 Group

Exposures before Credit Exposures post CCF and CRM RWA and RWA Density (%)
&RQYHUVLRQ)DFWRU&&)DQG
CRM
On-balance Off-Balance On-balance Off-Balance RWA (e) RWA
sheet Sheet sheet Sheet Density
amount (a) Amount (b) amount (c) Amount (d) {e/(c+d)}
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 (%)
%NCKOUQP%GPVTCN)QXGTPOGPVCPF%$5. 573,954,646 - 535,490,262 - 33,191,042 0.06
%NCKOUQPHQTGKIPUQXGTGKIPUCPFVJGKTEGPVTCNDCPMU - - - - - -
%NCKOUQP2WDNKE5GEVQT'PVKVKGU
25'U - - - - - -
%NCKOUQP1HƂEKCN'PVKVKGUCPF/WNVKNCVGTCN - - - - - -
&GXGNQROGPV$CPMU
/&$U
%NCKOUQP$CPMU'ZRQUWTGU 105,601,783 - 105,601,783 - 31,470,793 0.30
Claims on Financial Institutions 35,937,282 1,783,110 35,937,282 1,783,110 22,407,846 0.59
Claims on Corporates 439,967,451 257,146,913 414,423,075 74,502,469 447,475,542 0.92
Retail Claims 456,486,795 138,011,682 388,333,867 15,185,763 271,710,205 0.67
Claims Secured by Residential Property 57,964,699 - 57,964,699 - 30,123,783 0.52
Claims Secured by commercial Real Estate - - - - - -
0QP2GTHQTOKPI#UUGVU
02#U
K 49,044,888 - 49,044,888 - 52,547,928 1.07
*KIJGT4KUM%CVGIQTKGU 1,267,590 - 1,267,590 - 3,168,975 2.50
Cash items and Other Assets 109,308,994 - 109,308,995 - 71,779,850 0.66
Total 1,829,534,128 396,941,705 1,697,372,441 91,471,342 963,875,964

TEMPLATE 9
Exposures by asset classes and risk weights (Post CCF & CRM) - Bank
As at December 31,2022 Bank

0% 10% 20% 35% 50% 60% 75% 100% 150% >150% Total
credit
exposures
amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
%NCKOUQP%GPVTCN)QXGTPOGPVCPF%GPVTCN$CPM 354,508,986 - 165,955,209 - - - - - - - 520,464,195

QH5TK.CPMC
%NCKOUQP(QTGKIP5QXGTGKIPUCPFVJGKT%GPVTCN - - - - - - - - - - -
$CPMU
Claims on Public Sector Entities - - - - - - - - - - -
%NCKOUQP1HƂEKCN'PVKVKGUCPF - - - - - - - - - - -
/WNVKNCVGTCN&GXGNQROGPVDCPMU
%NCKOUQP$CPMU'ZRQUWTGU - - 80,782,754 - 10,801,115 - - 6,027,267 117,203 - 97,728,339
Claims on Financial Institutions - - 454,898 - 27,173,655 - - 7,368,239 - - 34,996,792
Claims on Corporates - - 28,687,413 - 36,160,090 - - 409,754,719 - - 474,602,222
Retail Claims - - - - - 72,736,688 154,963,543 80,959,816 - - 308,660,047
%NCKOU5GEWTGFD[IQNF 53,678,625 - - - - - - - - - 53,678,625
Claims secured by Residential Property - - - 42,832,178 - - - 15,132,521 - - 57,964,699
Claims Secured by Commercial Real Estate - - - - - - - - - - -
0QP2GTHQTOKPI#UUGVU
02#U - - - - 130,266 - - 41,778,277 7,136,345 - 49,044,888
*KIJGTTKUM%CVGIQTKGU - - - - - - - - - 1,130,432 1,130,432
Cash Items and Other Assets 36,929,336 - - - - - - 44,567,779 - - 81,497,115
Total 445,116,947 - 275,880,274 42,832,178 74,265,126 72,736,688 154,963,543 605,588,618 7,253,548 1,130,432 1,679,767,354

UNDER PILLAR III
TEMPLATE 9 (Contd.)
Exposures by asset classes and risk weights (Post CCF & CRM) - Group
As at December 31,2022 Group

0% 10% 20% 35% 50% 60% 75% 100% 150% >150% Total
credit
exposures
amount
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
%NCKOUQP%GPVTCN)QXGTPOGPVCPF%GPVTCN$CPM 369,535,053 - 165,955,209 - - - - - - - 535,490,262

QH5TK.CPMC
%NCKOUQP(QTGKIP5QXGTGKIPUCPFVJGKT%GPVTCN - - - - - - - - - - -
$CPMU
Claims on Public Sector Entities - - - - - - - - - - -
%NCKOUQP1HƂEKCN'PVKVKGUCPF/WNVKNCVGTCN&GXGNQR - - - - - - - - - - -
OGPV$CPMU
%NCKOUQP$CPMU'ZRQUWTGU - - 81,536,452 - 17,920,861 - - 6,027,267 117,203 - 105,601,783
Claims on Financial Institutions - - 454,898 - 29,897,255 - - 7,368,239 - - 37,720,392
Claims on Corporates - - 29,212,446 - 36,160,090 - - 423,553,008 - - 488,925,544
Retail Claims - - - - - 72,736,688 196,144,502 80,959,816 - - 349,841,006
%NCKOU5GEWTGFD[IQNF 53,678,625 - - - - - - - - - 53,678,625
Claims Secured by Residential Property - - - 42,832,178 - - - 15,132,521 - - 57,964,699
Claims Secured by Commercial Real Estate - - - - - - - - - - -

0QP2GTHQTOKPI#UUGVU
02#U - - - - 130,266 - - 41,778,277 7,136,345 - 49,044,888
*KIJGTTKUM%CVGIQTKGU - - - - - - - - - 1,267,590 1,267,590
Cash Items and other Assets 37,529,144 - - - - - - 71,779,850 - - 109,308,994
Total 460,742,822 - 277,159,005 42,832,178 84,108,472 72,736,688 196,144,502 646,598,978 7,253,548 1,267,590 1,788,843,783

TEMPLATE 10
Market risk under standardised measurement method
Bank Group
As at December 31, 2022 2021 2022 2021
Rs 000 Rs 000 Rs 000 Rs 000
Db&DSLWDOFKDUJHIRULQWHUHVWUDWHULVN 1 1
)GPGTCNKPVGTGUVTCVGTKUM
K0GVNQPIQTUJQTVRQUKVKQP 1 1
KK*QTK\QPVCNFKUCNNQYCPEG - -
KKK8GTVKECNFKUCNNQYCPEG - -
KX1RVKQPU - -
5RGEKƂEKPVGTGUVTCVGTKUM
(b) Capital charge for equity 20,161 42,804
K)GPGTCNGSWKV[TKUM 10,080 21,579
KK5RGEKƂEGSWKV[TKUM 10,080 21,225
F&DSLWDOFKDUJHIRUIRUHLJQH[FKDQJH JROG 1,923,651 1,923,651
Capital charge for market risk [(a) + (b) + (c)] * CAR 14,398,617 14,566,345

UNDER PILLAR III
TEMPLATE 11
Operational Risk under basic indicator approach - Bank

Gross income Gross income
Capital Fixed 1st 2nd 3rd 1st 2nd 3rd
Charge Factor Year Year Year Year Year Year
Factor
% Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Gross income 0# 0# 56,578,162 66,006,125 138,270,013
%CRKVCNEJCTIGU 0# 8,486,724 9,900,919 20,740,502
%CRKVCNEJCTIGUHQTQRGTCVKQPCNTKUM 13,042,715
The basic indicator approach 13,042,715
4KUMYGKIJVGFCOQWPVHQTQRGTCVKQPCNTKUM 96,612,704
Operational Risk under basic indicator approach - Group

Gross income Gross income
Capital Fixed 1st 2nd 3rd 1st 2nd 3rd
Charge Factor Year Year Year Year Year Year
Factor
% Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Gross income 0# 0# 72,447,965 84,765,100 161,494,645
%CRKVCNEJCTIGU 0# 10,867,195 12,714,765 24,224,197
%CRKVCNEJCTIGUHQTQRGTCVKQPCNTKUM 15,935,386
The basic indicator approach 15,935,386
4KUMYGKIJVGFCOQWPVHQTQRGTCVKQPCNTKUM 118,039,893

TEMPLATE 12
'LIIHUHQFHVEHWZHHQDFFRXQWLQJDQGUHJXODWRU\VFRSHVDQGPDSSLQJRǏQDQFLDOVWDWHPHQWFDWHJRULHVZLWKUHJXODWRU\ULVN
categories – Bank only
As at December 31, 2022 a b c d e

Carrying Carrying Subject to Subject to Not subject
Values as Values under Credit Risk Market Risk to Capital
Reported in Scope of )UDPHZRUN )UDPHZRUN Requirements
Published Regulatory or Subject to
Financial Reporting Deduction
Statements from Capital
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Assets 1,690,538,964 1,690,538,964 1,510,555,667 111,617 138,736,794

%CUJCPFECUJGSWKXCNGPVU 80,238,881 80,238,881 80,238,881 - -
2NCEGOGPVUYKVJDCPMU 54,371,028 54,371,028 54,371,028 - -
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC 32,344,341 32,344,341 39,108,812 - -
4GXGTUGTGRWTEJCUGCITGGOGPVU - - - - -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 5,370,501 5,370,501 - - -
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 111,617 111,617 - 111,617 -
(KPCPEKCNCUUGVUCVCOQTVKUGFEQUV.QCPUCPFCFXCPEGUVQDCPMU - - - - -
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQ 974,131,252 974,131,252 841,969,564 - 132,161,688
customers
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTKPUVTW 448,791,874 448,791,874 448,791,874 - -
ments
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXG 2,706,660 2,706,660 (929,710) - 3,636,370
income
Investment in joint venture 755,000 755,000 - - 755,000
Investments in subsidiaries 3,017,285 3,017,285 1,973,000 - 1,044,285
Investments in associates - - - - -
Investment properties 464,439 464,439 464,439 - -
2TQRGTV[RNCPVCPFGSWKROGPV 24,835,729 24,835,729 24,835,729 - -
4KIJVQHWUGCUUGVU 5,397,734 5,397,734 - - -
+PVCPIKDNGCUUGVUCPFIQQFYKNN 1,250,154 1,250,154 - - 1,139,451
Deferred tax assets 30,471,351 30,471,351 - - -
Other assets 26,281,118 26,281,118 19,732,050 - -
.KCDKNKVKGU 1,531,211,586 1,531,211,586 - - -
&WGVQDCPMU 6,104,578 6,104,578 - - -
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 25,632 25,632 - - -
5GEWTKVKGUUQNFWPFGTTGRWTEJCUGCITGGOGPVU 6,540,014 6,540,014 - - -
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVFWGVQFGRQUKVQTU 1,407,800,492 1,407,800,492 - - -
Dividends payable 1,008,325 1,008,325 - - -
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU 32,350,594 32,350,594 - - -
Debt securities issued 2,062,950 2,062,950 - - -

Current tax liabilities 30,025,919 30,025,919 - - -
Deferred tax liabilities - - - - -

UNDER PILLAR III
TEMPLATE 12 (Contd.)
As at December 31, 2022 a b c d e

Carrying Carrying Subject to Subject to Not subject
Values as Values under Credit Risk Market Risk to Capital
Reported in Scope of )UDPHZRUN )UDPHZRUN Requirements
Published Regulatory or Subject to
Financial Reporting Deduction
Statements from Capital
Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Other provisions 5,000,513 5,000,513 - - -

Other liabilities 17,378,270 17,378,270 - - -
Due to subsidiaries - - - - -
Subordinated liabilities - - - - -
Subordinated term debts 22,914,299 22,914,299 - - -
1HHDCNCPEGUJGGVNKCDKNKVKGU 809,328,957 809,328,957 - - -
Guarantees 67,645,156 67,645,156 67,645,156 - -
Performance bonds 41,707,165 41,707,165 41,707,165 - -
.GVVGTUQHETGFKV 21,226,810 21,226,810 21,226,810 - -
1VJGTEQPVKPIGPVKVGOU 62,102,573 62,102,573 62,102,573 - -
7PFTCYPNQCPEQOOKVOGPVU 616,647,253 616,647,253 616,647,253 - -
Other commitments - - - - -
5JCTGJQNFGTU GSWKV[
'SWKV[%CRKVCN
UVCVGFECRKVCNCUUKIPGFECRKVCN1HYJKEJCOQWPV 38,679,005 38,679,005 - - -
GNKIKDNGHQT%'6
1HYJKEJCOQWPVGNKIKDNGHQT#6 - - - - -
4GVCKPGFGCTPKPIU 40,706,963 40,706,963 - - -
Accumulated other comprehensive income (1,395,905) (1,395,905) - - -
Other reserves 81,337,315 81,337,315 - - -
6QVCN5JCTGJQNFGTU 'SWKV[ 159,327,378 159,327,378 - - -

TEMPLATE 13 : BANK RISK MANAGEMENT APPROACH
6JG4KUM4GRQTVHTQORCIGUVQKP%)44UGVUQWVVJG$CPMoUCRRTQCEJVQTKUMOCPCIGOGPVKPENWFKPIIQXGTPCPEGUVTWEVWTGURQNKEKGURTQEGUUGU
NKOKVUCPFVJGEWTTGPVTKUMRTQƂNGQHVJG$CPM
TEMPLATE 14 : RISK MANAGEMENT RELATED TO KEY RISK EXPOSURES
Risk Compliance
5GEVKQP+%TGFKV4KUM 4GHGT2CIGUVQ
5GEVKQP++/CTMGV4KUM 4GHGT2CIGUVQ
5GEVKQP++
C+44 4GHGT2CIG
5GEVKQP++
D'SWKV[2QUKVKQP4KUM 4GHGT2CIG
5GEVKQP++
E(QTGKIP'ZEJCPIG 4GHGT2CIG
5GEVKQP+++.KSWKFKV[4KUM
5GEVKQP+++
C-G[4CVKQU 4GHGT2CIG
5GEVKQP+++
D%WTTGPE[9KUG 4GHGT2CIGU
5GEVKQP+81RGTCVKQPCN4KUM /CLQT1RGTCVKQPCN.QUUGUKPEWTTGFD[$CPMQPRCIG
5GEVKQP8+PVGTGUV4CVG4KUMKP$CPMKPI$QQM
+44$$ 4GHGTRCIG

UNDER PILLAR III
TEMPLATE 14 - SECTION II MARKET RISK -(A) INTEREST RATE RISK
Interest Rate Senstivity Gap Analysis as at 31-Dec-2022-LKR

( Values are in Millions LKR )
1M 3M 6M 1Y 3Y 5Y >5Y
Account Type Product 3URGXFW1DPH/HYHO

Rate Sensitive Assets +PƃQYU $CNCPEGUFWGHTQO*GCF1HƂEG 0.00 0.00 0.00 0.00 0.00 0.00
#HƂNKCVGUCPF1YP$TCPEJGU
$KNNUQH'ZEJCPIG 0.00 0.00 0.00 0.00 0.00 0.00
Cash on hand 0.00 0.00 238.70 0.00 0.00 0.00
&GRQUKVUYKVJ%$5.
+PXGUVOGPVU
0GVQHRTQXKUKQPU
.QCPUCPF#FXCPEGU
02.U 0.00 0.00 0.00
0GV+PVGT$TCPEJ6TCPUCEVKQPU 0.00 0.00 0.00 0.00 0.00 0.00
Other Assets 124.49 0.00
Overdraft
Accrued Interest 1.70 0.29
$CNCPEGUFWGHTQO1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(KZGF#UUGVU. 0.00 0.00 0.00 0.00 0.00 0.00

4CVG5GPUKVKXG.KCDKNKVKGU 1WVƃQYU $CNCPEGUFWGVQ1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00 0.00
$KNNU2C[CDNG 0.00 0.00 0.00 0.00 0.00 0.00
Demand Deposits
Interest Payable
1VJGT.KCDKNKVKGU 202.19 258.15
5CXKPIU&GRQUKVU
Time Deposits
$QPFU+UUWGF 0.00 0.00 0.00
$QTTQYKPIU 321.85 409.20 851.89 125.50
%CRKVCN4GUGTXGU 0.00 0.00 0.00 0.00 0.00 0.00
Repo 122.08 441.59 0.00 0.00 0.00
Reserves 0.00 0.00 0.00 0.00 0.00 0.00

Net Gap

Cumulative Gap

Rate Sensitive Assets

'ZEN%CUJQPJCPF&GRQUKVUYKVJ
total %$5.
4CVG5GPUKVKXG.KCDKNKVKGU
'ZEN&GOCPF&GRQUKVU%CRKVCN
total
Net Gap

Cumulative Gap


Interest Rate Sensitivity Gap Analysis as at 31-Dec-2022-USD
( Values are in Thousands USD )
1M 3M 6M 1Y 3Y 5Y >5Y
Account Type Product 3URGXFW1DPH/HYHO

Rate Sensitive Assets +PƃQYU $KNNUQH'ZEJCPIG 0.00 0.00 0.00 0.00 0.00
Cash on hand 0.00 0.00 0.00 0.00 0.00 0.00
+PXGUVOGPVU
0GVQHRTQXKUKQPU 0.00
.QCPUCPF#FXCPEGU
02.U 0.00 0.00 0.00 0.00 0.00
Other Assets 538.31 0.00 0.00 0.00
Overdraft 310.72 598.44 598.39
Accrued Interest 182.78 90.04 198.38 0.00 0.00
$CNCPEGUFWGHTQO1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00

4CVG5GPUKVKXG.KCDKNKVKGU 1WVƃQYU $CNCPEGUFWGVQ1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00 0.00
Demand Deposits
Interest Payable 515.34 0.00
1VJGT.KCDKNKVKGU 242.25 582.44 908.07 908.05
5CXKPIU&GRQUKVU
Time Deposits 0.00

Net Gap
Cumulative Gap
Rate Sensitive Assets
VQVCN
'ZEN%CUJQP
*CPF
4CVG5GPUKVKXG.KCDKNKVKGU
VQVCN
'ZEN&GOCPF
&GRQUKV
Net Gap
Cumulative Gap
Notes
6JGCDQXGƂIWTGUJCXGDGGPRTGRCTGFKPENWFKPIKPVGTGUVECUJƃQYUCPFOC[FKHHGTHTQO5.(45ƂIWTGUIKXGPKPVJG5VCVGOGPVQH
Financial Position
2TGRCTGFCURGTVJGTGSWKTGOGPVUIKXGPKPVJG$CPMKPI#EV&KTGEVKQP0QQHQPp+PVGITCVGF4KUM/CPCIGOGPV(TCOGYQTMq

UNDER PILLAR III
TEMPLATE 14 - SECTION II MARKET RISK -(B) EQUITY POSITION RISK
Equity Carrying Value Fair Value
Investment Portfolio

6TCFKPI2QTVHQNKQ 129 111
TEMPLATE 14 - SECTION II MARKET RISK -(C) FOREIGN EXCHANGE RISK
Report on Liquidity Gap Summary as at 31st Dec 2022 (Consolidated Foreign Currency)
(Amounts are in Thousands USD)
1M 3M 6M 1Y 3Y 5Y >5Y
Particulars Product
6QVCN+PƃQYU $KNNUQH'ZEJCPIG 0.00 0.00 0.00 0.00 0.00
Cash on hand 0.00 0.00 0.00 0.00 0.00 0.00
+PXGUVOGPVU
0GVQHRTQXKUKQPU
.QCPUCPF#FXCPEGU
02.U 0.00 0.00 0.00 0.00 0.00
Other Assets 538.31 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00 0.00
Overdraft
Accrued Interest 182.78 90.73 180.85 198.38 0.00 0.00
Forward Contracts 0.00 319.84 0.00 0.00 0.00

6QVCN1WVƃQYU $CNCPEGUFWGVQ1VJGT$CPMU 0.00 0.00
Demand Deposits 392.39 392.39
.GVVGTUQH%TGFKV)WCTCPVGGU#E 0.00 0.00 0.00 0.00
ceptances
1VJGT.KCDKNKVKGU 252.95 948.17 948.15
5CXKPIU&GRQUKVU
Time Deposits 0.00
Forward Contracts Payable 0.00 319.84 0.00 0.00 0.00

0GV.KSWKFKV[)CR

0GV)CRCUQH6QVCN1WVƃQYU

208.28 127.73 53.05
Cumulative Gap

Notes
6JGCDQXGƂIWTGUJCXGDGGPRTGRCTGFKPENWFKPIKPVGTGUVECUJƃQYUCPFOC[FKHHGTHTQO5.(45ƂIWTGUIKXGPKPVJG5VCVGOGPVQH
Financial Position

TEMPLATE 14 - SECTION III LIQUIDITY RISK - KEY LIQUIDITY RATIOS
Ratio Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 1RY Dec-22
5.#4
.%4
(QT.-4
.%4
(QT#NN%%;
0GV.QCPUVQ6QVCN#UUGVU
.QCPUVQ%WUVQOGT&GRQUKVU
.KSWKF#UUGVUVQ5JQTV6GTO
.KCDKNKVKGU
%QOOKVOGPVUVQ.KSWKF#UUGVU
%QOOKVOGPVUVQ6QVCN.QCPU
%
600
500
400
300
200
100
0
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
SLAR Loans to Customer Deposits

LCR (For LKR) Liquid Assets to Short Term Liabilities
LCR (For All CCY) Commitments to Liquid Assets
Net Loans to Total Assets Commitments to Total Loans

UNDER PILLAR III
TEMPLATE 14 - SECTION III (B) LIQUIDITY RISK- CURRENCY WISE
Report on Liquidity Gap Summary as at 31st Dec 2022 (LKR/ Behavioural)
(Amounts are in Millions LKR)
1M 3M 6M 1Y 3Y 5Y >5Y
Particulars Product
6QVCN+PƃQYU $CNCPEGUFWGHTQO*GCF1HƂEG 0.00 0.00 0.00 0.00 0.00 0.00
#HƂNKCVGUCPF1YP$TCPEJGU
$KNNUQH'ZEJCPIG 0.00 0.00 0.00 0.00 0.00 0.00
Cash on hand 0.00 0.00 238.70 0.00 0.00 0.00
&GRQUKVUYKVJ%$5.
+PXGUVOGPVU
0GVQHRTQXKUKQPU 323.93
.QCPUCPF#FXCPEGU
02.U 0.00 0.00 0.00
0GV+PVGT$TCPEJ6TCPUCEVKQPU 0.00 0.00 0.00 0.00 0.00 0.00

Other Assets 124.49 0.00
Other 0.00 0.00 0.00 0.00 0.00
Overdraft
Accrued Interest 1.70 0.29
$CNCPEGUFWGHTQO1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(KZGF#UUGVU. 0.00 0.00 0.00 0.00 0.00 0.00
Reverse Repo 0.00 0.00 0.00 0.00 0.00 0.00

6QVCN1WVƃQYU $CNCPEGUFWGVQ1VJGT$CPMU 0.00 0.00 0.00 0.00 0.00 0.00

$KNNU2C[CDNG 0.00 0.00 0.00 0.00 0.00 0.00
Demand Deposits
Interest Payable
.GVVGTUQH%TGFKV)WCTCPVGGU 0.00 527.92 0.00 0.00 0.00
Acceptances
1VJGT.KCDKNKVKGU 202.19 258.15
5CXKPIU&GRQUKVU
Time Deposits
$QPFU+UUWGF 0.00 0.00 3.47
$QTTQYKPIU 450.55 913.28
Capital 0.00 0.00 0.00 0.00 0.00 0.00
Repo 0.00 0.00 0.00
Reserves 0.00 0.00 0.00 0.00 0.00 0.00

0GV.KSWKFKV[)CR

0GV)CRCUQH6QVCN 97.81

47.00 79.77
1WVƃQYU
Cumulative Gap

TEMPLATE 14 - SECTION III (B) LIQUIDITY RISK- CURRENCY WISE
Report on Liquidity Gap Summary as at 31st Dec 2022 (USD/ Behavioural)
(Amounts are in Thousands USD)
1M 3M 6M 1Y 3Y 5Y >5Y
Particulars Product
6QVCN+PƃQYU $KNNUQH'ZEJCPIG 0.00 0.00 0.00 0.00 0.00
Cash on hand 0.00 0.00 0.00 0.00 0.00 0.00
+PXGUVOGPVU
0GVQHRTQXKUKQPU
.QCPUCPF#FXCPEGU
02.U 0.00 0.00 0.00 0.00 0.00
Other Assets 538.31 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00 0.00
Overdraft
Accrued Interest 182.78 90.04 198.38 0.00 0.00

6QVCN1WVƃQYU $CNCPEGUFWGVQ1VJGT$CPMU 0.00 0.00
Demand Deposits
.GVVGTUQH%TGFKV)WCTCPVGGU#E 0.00 0.00 0.00 0.00
ceptances
1VJGT.KCDKNKVKGU 242.25 908.07 908.05
5CXKPIU&GRQUKVU
Time Deposits 0.00

0GV.KSWKFKV[)CR

0GV)CRCUQH6QVCN1WVƃQYU 31.27
15.37
232.34 149.74 58.91
Cumulative Gap

#FLWUVOGPVUHQT$GJCXKQWTCN Time Deposits

Maturities
7PWVKNKUGF1&

0.00 0.00 0.00
7PFKUDWTUGF.QCPU

0.00 0.00
Total Adjustments

#FLWUVGF0GV.KSWKFKV[)CR

#FLWUVGF0GV)CRCUQH6QVCN 210.82 100.24 48.58 9.09 10.95

1WVƃQYU
Adjusted Cumulative Gap
Notes
6JGCDQXGƂIWTGUJCXGDGGPRTGRCTGFKPENWFKPIKPVGTGUVECUJƃQYUCPFOC[FKHHGTHTQO5.(45ƂIWTGUIKXGPKPVJG5VCVGOGPVQH(KPCPEKCN2QUKVKQP

UNDER PILLAR III
TEMPLATE 14 - SECTION (V) INTEREST RATE RISK IN THE BANKING BOOKS (IRRBB)
Present Market Value of RSA/RSL on Movement of Market Interest Rates - LKR

(Values are in Millions LKR)
1M 3M 6M 1Y 3Y 5Y >5Y
Rate Sensitive Assets total
4CVG5GPUKVKXG.KCDKNKVKGUVQVCN
Net Gap

Cumulative Gap

&WTCVKQPYGKIJV 0.08 0.25 0.50 1.00 3.00 5.00 30.00
/CTMGV4CVGU 24.40 34.00 33.54 30.49 29.50 27.90 25.89
2TGUGPV8CNWGCVOCTMGVTCVGU 140
2TGUGPV8CNWGCVOCTMGVTCVGU DCUKURV 124
%JCPIGKP/CTMGVXCNWGHQTDCUKURQKPVKPVGTGUVOQXGOGPV

Present Market Value of RSA/RSL on Movement of Market Interest Rates - USD

(Values are in Thousands USD)
1M 3M 6M 1Y 3Y 5Y >5Y
Rate Sensitive Assets total
4CVG5GPUKVKXG.KCDKNKVKGUVQVCN
Net Gap
Cumulative Gap
&WTCVKQPYGKIJV 0.08 0.25 0.5 1 3 5 10
/CTMGV4CVGU 4.39157 5.48214 4.045 3.837
2TGUGPV8CNWGCVOCTMGVTCVGU
2TGUGPV8CNWGCVOCTMGVTCVGU DCUKURV
%JCPIGKP/CTMGVXCNWGHQTDCUKURQKPVKPVGTGUVOQXGOGPV

Notes
6JGCDQXGƂIWTGUJCXGDGGPRTGRCTGFKPENWFKPIKPVGTGUVECUJƃQYUCPFOC[FKHHGTHTQO5.(45ƂIWTGUIKXGPKPVJG
Statement of Financial Position

INCOME STATEMENT IN US DOLLARS
Bank Group
US$ 000 US$ 000 US$ 000 US$ 000
Gross income 659,625 736,080

Interest income 563,318 600,221
.GUU+PVGTGUVGZRGPUGU 283,381 296,639
Net interest income 279,937 303,582
Fee and commission income 42,231 44,956
.GUU(GGCPFEQOOKUUKQPGZRGPUGU 941 1,686
Net fee and commission income 41,290 43,270
Net interest, fee and commission income 321,227 346,852
0GVICKPU
NQUUGUHTQOVTCFKPI 13,330
13,131

0GVICKPHTQOƂPCPEKCNKPXGUVOGPVUCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXG
income 61 63
Net insurance premium income - 34,695
0GVICKPUCTKUKPIQPFGTGEQIPKVKQPQHƂPCPEKCNCUUGVU - - 29
0GVQVJGTQRGTCVKPIKPEQOG 40,685 43,014
Total operating income 375,303 437,755
.GUU+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 246,153 249,621
Net operating income 129,150 188,134
Less : Operating expenses
Personnel expenses 40,887 50,314
$GPGƂVUENCKOUCPFWPFGTYTKVKPIGZRGPFKVWTG - 31,878
Other expenses 41,800 53,327
Total operating expenses 82,687 135,519
2SHUDWLQJSUR̍WEHIRUHWD[HVRQ̍QDQFLDOVHUYLFHV 46,463 52,615
.GUU6CZGUQPƂPCPEKCNUGTXKEGU 13,881 14,279
2SHUDWLQJSUR̍WDIWHUWD[HVRQ̍QDQFLDOVHUYLFHV 32,582 38,336
PGVQHKPEQOGVCZ - 903
PROFIT BEFORE INCOME TAX 32,582 39,239
.GUU+PEQOGVCZGZRGPUG (5,604) (3,614)
PROFIT FOR THE YEAR 38,186 42,853
2TQƂVCVVTKDWVCDNGVQ
'SWKV[JQNFGTUQHVJG$CPM 38,186 41,711
Earnings per share

$CUKEGCTPKPIURGTQTFKPCT[UJCTG
0.07 0.08 0.18
&KNWVGFGCTPKPIURGTQTFKPCT[UJCTG
0.07 0.08 0.18
'LYLGHQGSHUVKDUH
&KXKFGPFRGTUJCTG)TQUU
*0.01 0.04 *0.01 0.04
'ZEJCPIGTCVGQH75YCU4UCUCVUV&GEGODGT
4UCUCVUV&GEGODGT
6JGKPEQOGUVCVGOGPVIKXGPQPVJKURCIGKUUQNGN[HQTVJGEQPXGPKGPEGQHVJGUVCMGJQNFGTUQHƂPCPEKCNUVCVGOGPVUCPFFQGUPQVHQTORCTVQHVJG
CWFKVGFƂPCPEKCNUVCVGOGPVU
(KPCNFKXKFGPFRTQRQUGFYJKEJKUVQDGCRRTQXGFCVVJG#PPWCN)GPGTCN/GGVKPI
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE

INCOME IN US DOLLARS
Bank Group
US$ 000 US$ 000 US$ 000 US$ 000

2WKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOQRWEHUHFODVVL̍HGWRSUR̍WRUORVVLQ
subsequent periods
%JCPIGKPHCKTXCNWGQHKPXGUVOGPVUKPGSWKV[KPUVTWOGPVUFGUKIPCVGFCVHCKTXCNWG
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG (4,405)
(4,405)

4GOGCUWTGOGPVQHRQUVGORNQ[OGPVDGPGƂVQDNKICVKQPU 5,054 5,200
4GXCNWCVKQPICKPQPHTGGJQNFNCPFCPFDWKNFKPIU - 544
5JCTGQHQVJGTEQORTGJGPUKXGKPEQOGQHLQKPVXGPVWTGVJCVYKNNPQVDGTGENCUUKƂGF
VQRTQƂVQTNQUU - 1,219
.GUU6CZGZRGPUGTGNCVKPIVQKVGOUVJCVYKNNPQVDGTGENCUUKƂGFVQRTQƂVQTNQUU
KPENWFKPIVJGGHHGEVQHTCVGEJCPIG (3,149)
(6,646)

7RWDORWKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOQRWEHUHFODVVL̍HGWRSUR̍WRUORVV (2,500) (4,088)
2WKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOEHUHFODVVL̍HGWRSUR̍WRUORVVLQ
subsequent periods
'HEWLQVWUXPHQWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH
0GVICKPU
NQUUGUQPKPXGUVOGPVUKPFGDVKPUVTWOGPVUOGCUWTGFCVHCKTXCNWG
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG (9,889)
(14,387)

%WOWNCVKXGPGVICKPU
NQUUGUQPFGDVKPUVTWOGPVUOGCUWTGF
CVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG
VJCVCTGTGENCUUKƂGFVQCOQTVKUGFEQUV 15,177 - 17,093 -
4GENCUUKƂECVKQPQHPGVICKPUQPFGTGEQIPKVKQPQHFGDVKPUVTWOGPVUCVHCKTXCNWG
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOGVQKPEQOGUVCVGOGPV - -

0GVEJCPIGKPGZRGEVGFETGFKVNQUUGUQHFGDVUGEWTKVKGUOGCUWTGFCVHCKTXCNWG
VJTQWIJQVJGTEQORTGJGPUKXGKPEQOG (804) 920 (804) 920
Transfer to life policy holder reserve fund - 3,386
Share of other comprehensive income of joint venture that
YKNNDGTGENCUUKƂGFVQRTQƂVQTNQUU - (19) 304
.GUU6CZGZRGPUGTGNCVKPIVQKVGOUVJCVYKNNDGTGENCUUKƂGFVQRTQƂVQTNQUU
KPENWFKPIVJGGHHGEVQHTCVGEJCPIG (1,269) (1,055)
7RWDORWKHUFRPSUHKHQVLYHLQFRPHWKDWZLOOEHUHFODVVL̍HGWRSUR̍WRUORVV 3,215
4,214

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 715 126
TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX 38,901 42,979
6QVCNEQORTGJGPUKXGKPEQOGCVVTKDWVCDNGVQ
'SWKV[JQNFGTUQHVJG$CPM 38,901 41,141
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 38,901 42,979
4UCUCVUV&GEGODGT
6JGUVCVGOGPVQHRTQƂVQTNQUUCPFQVJGTEQORTGJGPUKXGKPEQOGIKXGPQPVJKURCIGKUUQNGN[HQTVJGEQPXGPKGPEGQHVJGUVCMGJQNFGTUQHƂPCPEKCN
UVCVGOGPVUCPFFQGUPQVHQTORCTVQHVJGCWFKVGFƂPCPEKCNUVCVGOGPVU

STATEMENT OF FINANCIAL POSITION IN US DOLLARS
Bank Group
As at 31st December 2022 2021 2022 2021
US$ 000 US$ 000 US$ 000 US$ 000
ASSETS
%CUJCPFECUJGSWKXCNGPVU 218,337 219,400
2NCEGOGPVUYKVJDCPMU 147,948 158,291
$CNCPEGUYKVJ%GPVTCN$CPMQH5TK.CPMC 88,012 88,012
4GXGTUGTGRWTEJCUGCITGGOGPVU - 3,757
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 14,614 14,614
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJRTQƂVQTNQUU 304 509 643
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVNQCPUCPFCFXCPEGUVQEWUVQOGTU 2,650,697 2,760,596
(KPCPEKCNCUUGVUOGCUWTGFCVCOQTVKUGFEQUVFGDVCPFQVJGTƂPCPEKCNKPUVTWOGPVU 1,221,202 1,305,543
(KPCPEKCNCUUGVUOGCUWTGFCVHCKTXCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 7,365 16,496
Investment in joint venture 2,055 9,933
Investment in subsidiaries 8,210 -
Investment properties 1,264 2,546
2TQRGTV[RNCPVCPFGSWKROGPV 67,580 135,010
4KIJVQHWUGCUUGVU 14,688 6,704
+PVCPIKDNGCUUGVUCPFIQQFYKNN 3,402 4,819
Deferred tax assets 82,915 83,709
Other assets 71,513 83,193
Total assets 4,600,106 4,893,266
LIABILITIES
&WGVQDCPMU 16,611 16,611
&GTKXCVKXGƂPCPEKCNKPUVTWOGPVU 70 70
Dividends payable 2,744 2,826
(KPCPEKCNNKCDKNKVKGUOGCUWTGFCVCOQTVKUGFEQUVQVJGTDQTTQYKPIU 88,029 90,845
Debt securities issued 5,613 6,953
Current tax liabilities 81,703 82,885
Deferred tax liabilities - 17,592
+PUWTCPEGRTQXKUKQPNKHG - 66,918
+PUWTCPEGRTQXKUKQPPQPNKHG - 11,379
Other provisions 13,607 14,877
Other liabilities 47,288 49,093
Subordinated term debts 62,352 71,160
Total liabilities 4,166,563 4,376,023
EQUITY
Stated capital 105,249 105,249
Statutory reserve fund 25,333 25,333
4GVCKPGFGCTPKPIU 110,767 136,728
Other reserves 192,194 231,443
Total shareholders’ equity 433,543 498,753
Total equity 433,543 517,243
7RWDOHTXLW\DQGOLDELOLWLHVb 4,600,106 4,893,266
%QPVKPIGPVNKCDKNKVKGUCPFEQOOKVOGPVU 2,202,256 2,202,256
0GVCUUGVUXCNWGRGTQTFKPCT[UJCTG
0.81 1.40 0.93
4UCUCVUV&GEGODGT
6JGUVCVGOGPVQHƂPCPEKCNRQUKVKQPIKXGPQPVJKURCIGKUUQNGN[HQTVJGEQPXGPKGPEGQHVJGUVCMGJQNFGTUQHƂPCPEKCNUVCVGOGPVUCPFFQGUPQVHQTORCTV
QHVJGCWFKVGFƂPCPEKCNUVCVGOGPVU
SOURCES AND UTILISATION OF INCOME
2017 2018 2019 2020 2021 2022

Rs 000 Rs 000 Rs 000 Rs 000 Rs 000 Rs 000
Sources of Income
Interest 207,019,354
Non interest income 35,393,137
Total 242,412,491
Utilisation of Income
Employees
Salaries and other payment to staff 15,025,888
6XSSOLHUVDQG3URYLGHUVRI)XQGLQJ
Interest paid 104,142,478
Other expenses 12,935,090
117,077,568
3URYLVLRQVDQG'HSUHFLDWLRQ
Depreciation and amortisation 2,567,704
Impairment for loans and other losses 90,461,305
93,029,009
1HW,QFRPHEHIRUH*RYHUQPHQW7D[HVDQG 17,280,026
/HYLHV
*RYHUQPHQW
+PEQOGVCZ8#65)655%.%TQR+PUWTCPEG 30,880,002
&4.
Shareholders
&KXKFGPFU%CUJ -
4GVCKPGFVJTQWIJUETKRFKXKFGPF 2,672,884
4GVCKPGFRTQƂVU 11,360,609
Deferred taxation

(27,633,469)
Total 242,412,491
Sources and Utilisation of Income 2022
19%
15% 81%
85%
Interest Dividends - scrip

Non interest income Retained profits

VALUE ADDED STATEMENT
2022 2021
Rs 000 % Rs 000 %
Value Added
+PEQOGGCTPGFD[RTQXKFKPIDCPMKPIUGTXKEGU 237,001,785
Cost of services 117,077,568
8CNWGCFFGFD[DCPMKPIUGTXKEGU 119,924,217

0QPDCPMKPIKPEQOG 489,368
0GVICKP
NQUUHTQOVTCFKPIƂPCPEKCN
investments 4,921,338

Impairment for loans and other losses (90,461,305)

34,873,618
Value Allocated to Employees

5CNCTKGUYCIGUQVJGTDGPGƂVU 15,025,888 43.09 28.52
7R3URYLGHUVRI&DSLWDO
&KXKFGPFUVQUJCTGJQNFGTUECUJ - 0.00
7R*RYHUQPHQW
Income tax 25,573,882
8CNWGCFFGFVCZQPƂPCPEKCNUGTXKEGU 4,932,774
5QEKCN5GEWTKV[%QPVTKDWVKQP.GX[ 168,598
%TQR+PUWTCPEG.GX[ 150,000
.QECNVCZGU 21,205
Stamp duty 33,543 30,880,002 88.55
7R([SDQVLRQDQG*URZWK
Retained income 11,360,609 32.58 33.31
4GVCKPGFVJTQWIJUETKRFKXKFGPF 2,672,884 7.66 3.49
&GRTGEKCVKQPCOQTVK\CVKQP 2,567,704 7.36
Deferred taxation (27,633,469) (79.24)

34,873,618 100.00 100.00
Analysis of Value Additions

89%
100
80
60
43%
34%
29%
28%
40
20
-32%
9%
0
-20
-40
Employees
Providers of
capital
Government
Expansion &
growth
2022 2021
VALUE CREATED TO STAKEHOLDERS

Rs 000 Rs 000
Direct Economic Value Generated

Fee commission income 15,520,113
0GVICKP
NQUUHTQOVTCFKPIƂPCPEKCNKPXGUVOGPV 4,921,338

1VJGTQRGTCVKPIKPEQOG 14,951,686
Total Direct Economic Value Generated 242,412,491
Economic Value Distributed

6QFGRQUKVQTUFGDGPVWTGJQNFGTUCUKPVGTGUV 104,142,478
To employees as emoluments 15,025,888
&GRTGEKCVKQPCOQTVKUCVKQPUGVCUKFG 2,567,704
+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 90,461,305
To providers of supplies and services 11,629,186
6QIQXGTPOGPVCUVCZCVKQP 30,880,002
+PEQOGVCZ 25,573,882
8#6CPF55%.QPƂPCPEKCNUGTXKEGU 5,101,372
%TQR+PUWTCPEG.GX[ 150,000
5VCORFWV[CPFQVJGTNQECNVCZGU 54,748
6Q%GPVTCN$CPMQH5TK.CPMCCUFGRQUKVKPUWTCPEGRTGOKWO 1,276,819
To shareholders as dividends 2,672,884
6QEQOOWPKV[CUFQPCVKQP%54 29,085
Total Economic value distributed 258,685,351
Economic Value Retained (16,272,860)

TEN YEAR STATISTICAL SUMMARY
Year ended 31st December (Rs Mn) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
OPERATING RESULTS
Income 242,412
Interest expense 104,142
Non interest income 35,393
1RGTCVKPIGZRGPUGU
+PENƂPCPEKCN8#6
55%.&4. 126,296
2TQƂVDGHQTGKPEQOGVCZ 11,974
+PEQOGVCZQPRTQƂV (2,060)
2TQƂVCHVGTVCZCVKQP 14,033
/,$%,/,7,(6$1'6+$5(+2/'(56
)81'6
Customer deposits 1,407,800
4GƂPCPEGDQTTQYKPIU 9,950
Other liabilities 113,461
Deferred tax liabilities 379 231 -
Shareholders' funds 159,327
Total 1,690,539
ASSETS
.QCPUCPFTGEGKXCDNGUVQEWUVQOGTU
PGV 974,131
%CUJUJQTVVGTOHWPFUCPFUVCVWVQT[
FGRQUKVUYKVJVJG%GPVTCN$CPMQH
5TK.CPMC 112,583
2TQRGTV[RNCPVCPFGSWKROGPV 24,836
Deferred tax assets 287 807 30,471
Other assets 548,517
Total 1,690,539
RATIOS
4GVWTPQPCXGTCIGUJCTGJQNFGTUHWPFU
14.3 19.9 17.8 13.9 11.5 8.8 12.1 9.0
+PEQOGITQYVJ
18.4
2.8 37.9 14.2 3.8

110.7
4GVWTPQPCXGTCIGCUUGVU
1.5 1.7 1.8 1.8 1.5 1.3 0.9 1.3 0.9
&KXKFGPFEQXGT
VKOGU 2.1 3.0 4.0 4.0 3.7 3.5 2.8 3.7 5.3
2TQRGTV[RNCPVCPFGSWKROGPVVQ
UJCTGJQNFGTU HWPFU
18.5 15.3 18.1 18.4 15.5 15.6
6QVCNCUUGVUVQUJCTGJQNFGTU HWPFU
VKOGU 9.9 9.4 11.1 11.2 8.8 9.4 8.8 8.9 10.6
.KSWKFCUUGVUVQNKCDKNKVKGU
23.3 22.8 23.9 23.5 24.1 24.4 28.0 34.0
SHARE INFORMATION
/CTMGVXCNWGRGTUJCTG
4U
8QVKPI 147.00 194.90 225.00 249.00 214.00 172.20 135.00 78.90
0QPXQVKPI 119.00 152.90 177.90 190.00 195.00 135.50 122.25 70.00
)TQWRGCTPKPIURGTUJCTG
4U 19.20 24.50 34.99 35.50 35.25 29.32 25.58 28.62
)TQWRGCTPKPIURGTUJCTG
CFLWUVGF
4U 14.55 20.07 30.32 33.53 27.89 24.90 35.52 28.62
2TKEGGCTPKPIUTCVKQ 8.07 7.01 5.87 4.95 3.73 2.76
)TQWRPGVCUUGVURGTUJCTG
4U 247.79 290.78 301.28 335.93 342.25
**Group net assets per share

CFLWUVGF
4U 109.45 129.12 173.59 232.00 252.25 293.30 329.88 342.25
&KXKFGPFRGTUJCTG
4U 8.50 8.50 8.50 8.50 8.50 8.50 8.00 8.00 9.00 5.00
%CUJFKXKFGPFRGTUJCTG
4U 8.50 8.50 5.00 5.00 5.00 4.50 4.50 -
)TQUUFKXKFGPFU
4U/P 2,673
OTHER INFORMATION
No of employees 5,156
No of customer centres 250 249 249 251 251 250 252 252 255 255
0QQHUVWFGPVDCPMKPIEGPVTGU 150 152 155 162
'CTPKPIURGTUJCTGJCUDGGPCFLWUVGFHQTYGKIJVGFCXGTCIGPWODGTQHUJCTGUQWVUVCPFKPIFWTKPIVJGEWTTGPV[GCT
** Net asset per share has been computed for the current number of shares issued as at 31st December 2022.
QUARTERLY STATISTICS
For the three months ended 2022 *2021

December September June March December September June March
31st 30th 30th 31st 31st 30th 30th 31st
Statement of Financial Position (Rs. Mn)
Total assets 1,690,539 1,632,094 1,597,327 1,505,748
.QCPUCPFCFXCPEGUVQEWUVQOGTU 974,131 973,929 991,284 948,088
Due to customers 1,407,800 1,346,076 1,292,900 1,216,530
5JCTGJQNFGTUoHWPFU 159,327 154,868 149,870 150,092
#XGTCIGCUUGVU 1,606,427 1,523,376 1,487,137 1,432,042
6WDWHPHQWRI3UR̍WRU/RVV5V
Net interest income 31,799,463 30,918,265 23,295,356 16,863,792
Net fee and commission income 4,171,801 3,855,045 3,902,514 3,244,890
0GVICKPU
NQUUGUHTQOVTCFKPI (36,058) (4,867,897) 2,303,227 7,499,447

0GVICKPU
NQUUGUHTQOƂPCPEKCNKPXGUVOGPVUCVHCKT
XCNWGVJTQWIJQVJGTEQORTGJGPUKXGKPEQOG 12,720 (201,505) 54,446 156,958
0GVQVJGTQRGTCVKPIKPEQOG 2,460,239 6,482,166 5,786,690 222,591
Total operating income 38,408,165 36,186,074 35,342,233 27,987,678
.GUU+ORCKTOGPVEJCTIGHQTNQCPUCPFQVJGTNQUUGU 30,185,979 20,181,419 26,740,331 13,353,576

Net operating income 8,222,186 16,004,655 8,601,902 14,634,102
.GUU1RGTCVKPIGZRGPUGU 7,570,897 7,960,562 7,837,496 7,018,612

6CZGUQPƂPCPEKCNUGTXKEGU 838,608 1,870,162 715,814 1,676,788
Income tax expenses (3,935,742) 1,393,528 (641,204) 1,123,831
3UR̍WIRUWKHTXDUWHUHQGHG 3,748,423 4,780,403 689,796 4,814,871
2WKHUFRPSUHKHQVLYHLQFRPHIRUWKHTXDUWHUHQGHG 912,388 1,894 2,700,251 (3,352,019)

7RWDOFRPSUHKHQVLYHLQFRPHIRUWKHTXDUWHUHQGHG 4,660,811 4,782,297 3,390,047 1,462,852
Ordinary share information

Market price per share (Rs) V NV V NV V NV V NV V NV V NV V NV V NV
*KIJ 84.30 77.00 90.10 85.20 110.75 101.25 142.40 100.00 171.00 147.75 142.75 133.75 139.00 111.75 130.75
.QY 72.00 64.90 77.30 69.90 76.50 73.00 132.80 100.00 133.00 120.25 128.00 105.50 123.00 91.50 125.00
%NQUKPI 78.90 70.00 84.70 74.50 79.50 73.80 109.25 105.00 135.00 122.25 141.00 133.75 134.00 107.25 97.20
88QVKPI080QP8QVKPI
0GV#UUGV8CNWGRGT5JCTG
#FLWUVGF 297.50 289.17 279.84 280.25 283.89 255.07
Financial measures
3UR̍WDELOLW\$QQXDOLVHG
+PVGTGUV/CTIKP 6.40 6.22 5.40 4.71 3.70 3.59 3.53
4GVWTPQP#UUGVU
DGHQTG6CZ 0.75 1.08 0.81 1.66 1.48 1.49 1.71
4GVWTPQP'SWKV[ 9.14 9.22 7.31 12.75 12.09 11.77 13.23 13.88
3URGXFWLYLW\
Cost to Income Ratio 19.71 22.00 22.18 25.08 25.57 38.75 37.99
BASEL III
5LVNZHLJKWHGFDSLWDOUDWLRV
%QOOQP'SWKV[6KGT+%CRKVCN
11.06 11.31 11.39 12.23 14.53 14.43 15.31 14.82
6KGT+%CRKVCN
11.06 11.31 11.39 12.23 14.53 14.43 15.31 14.82
6QVCN%CRKVCN
14.00 14.36 14.54 15.59 18.22 18.42 17.88
.GXGTCIG4CVKQ 6.22 6.36 6.59 7.14 7.97 8.03
Asset quality
)TQUU02#TCVKQ
N/A N/A N/A N/A 3.38 3.92 4.25 4.28
0GV02#TCVKQ
N/A N/A N/A N/A 0.15 0.42 0.78
+ORCKTGFNQCPU
UVCIG4CVKQ 3.40 3.34 2.46 2.41 2.55 0# 0# 0#
+ORCKTOGPV
UVCIGVQUVCIGNQCPU4CVKQ 56.99 56.30 63.00 58.59 0# 0# 0#
3WCTVGTN[KPHQTOCVKQPJCUDGGPCOGPFGFDCUGFQPENCUUKƂECVKQPEJCPIGUOCFGKP

INVESTOR RELATIONS
1 STOCK EXCHANGE LISTING

6JGKUUWGFQTFKPCT[UJCTGUQH*CVVQP0CVKQPCN$CPM2.%CTGNKUVGFYKVJVJG%QNQODQ5VQEM'ZEJCPIG6JGCWFKVGF+PEQOG5VCVGOGPVHQTVJG
[GCTGPFGFUV&GEGODGTCPFVJGCWFKVGF$CNCPEG5JGGVQHVJG$CPMCUCVFCVGJCXGDGGPUWDOKVVGFVQVJG%QNQODQ5VQEM'ZEJCPIG
YKVJKPVJTGGOQPVJUQHVJG$CNCPEG5JGGVFCVG
5VQEM'ZEJCPIGEQFGHQT*CVVQP0CVKQPCN$CPM2.%UJCTGUKUp*0$q4GWVGTUEQFGQH*CVVQP0CVKQPCN$CPM2.%KUp*0$%/q
2 ORDINARY SHAREHOLDERS
SHARE INFORMATION - VOTING
6JGTGYGTGTGIKUVGTGF8QVKPI5JCTGJQNFGTUCUCVUV&GEGODGT
FKUVTKDWVGFCUHQNNQYU
Resident Non-Resident Total

No of Share No of % No of Share No of No of Share No of
holders Shares holders Shares % holders Shares %
1 5,148 1,166,314 0.32 44 12,172 0.02 5,192 1,178,486 0.28

2,209 6,684,721 1.81 40 136,535 0.24 2,249 6,821,256 1.60
660 19,651,709 5.32 24 726,598 1.25 684 20,378,307 4.77
109 23,472,797 6.35 13 3,546,588 6.11 122 27,019,385 6.32
Over 29 318,469,887 86.20 6 53,597,055 92.38 35 372,066,942 87.04
8,155 369,445,428 100.00 127 58,018,948 100.00 8,282 427,464,376 100.000
ANALYSIS OF SHAREHOLDERS
4GUKFGPV0QP4GUKFGPV
31st December 2022 31st December 2021

No of Share No of % No of Share No of
holders Shares holders Shares %
Resident 8,155 369,445,428 86.43 85.45

0QP4GUKFGPV 127 58,018,948 13.57 128 14.55
Total 8,282 427,464,376 100.00 100.00
+PFKXKFWCNU+PUVKVWVKQPU

Individuals 7,843 91,768,791 21.47 21.02

Institutions 439 335,695,585 78.53 451 78.98
Total 8,282 427,464,376 100.00 100.00
#UCVVJGCXGTCIGUK\GQHJQNFKPIQHQTFKPCT[UJCTGJQNFKPIYCUXQVKPIUJCTGU
XQVKPIUJCTGUKPENWFKPI
WPTGIKUVGTGFUJCTGU
#URGTVJGTWNG0Q
KXQHVJG.KUVKPI4WNGUQHVJG%QNQODQ5VQEM'ZEJCPIGRGTEGPVCIGQHRWDNKEJQNFKPIQHXQVKPIUJCTGUCUCVUV
&GEGODGTYCUCRRTQZKOCVGN[
CUCVUV&GEGODGT
#URGTVJGTWNG0QQHVJG.KUVKPI4WNGUQHVJG%QNQODQ5VQEM'ZEJCPIG0QQHUJCTGJQNFGTUTGRTGUGPVKPIRWDNKEJQNFKPICUCVUV
&GEGODGT
CUCVUV&GEGODGT
UJCTGUTGOCKPWPTGIKUVGTGFCTKUKPIHTQOCFKTGEVKQPIKXGPD[VJG%$5.FCVGFVJ#WIWUVKPVGTOUQH5GE
+%
EQHVJG$CPMKPI
#EVCPFVJGUGWPTGIKUVGTGFUJCTGUCTGPQVKPENWFGFJGTGKP
INVESTOR RELATIONS
3 SHARE INFORMATION - NON VOTING

6JGTGYGTGTGIKUVGTGF0QP8QVKPI5JCTGJQNFGTUCUCVUV&GEGODGT
FKUVTKDWVGFCUHQNNQYU
Resident Non-Resident Total

No of Share No of % No of Share No of No of Share No of
holders Shares holders Shares % holders Shares %
1 6,978 2,270,698 2.15 40 14,393 1.17 7,018 2,285,091 2.13

3,542 11,160,910 10.54 40 146,469 11.85 3,582 11,307,379 10.56
614 15,695,036 14.82 13 509,601 41.24 627 16,204,637 15.13
54 14,261,045 13.47 3 565,090 45.74 57 14,826,135 13.84
Over 6 62,489,215 59.02 0 0 0 6 62,489,215 58.34
11,194 105,876,904 100.00 96 1,235,553 100.00 11,290 107,112,457 100.00
4GUKFGPV0QP4GUKFGPV

Resident 11,194 105,876,904 98.85

0QP4GUKFGPV 96 1,235,553 1.15 97 1.32
Total 11,290 107,112,457 100.00 100.00
,QGLYLGXDOV,QVWLWXWLRQV

Individuals 11,048 42,470,894 39.65 34.51

Institutions 242 64,641,563 60.35 311
Total 11,290 107,112,457 100.00 100.00
#UCVVJGCXGTCIGUK\GQHJQNFKPIQHQTFKPCT[UJCTGJQNFKPIYCUPQPXQVKPIUJCTGU
PQPXQVKPIUJCTGU
#URGTVJGTWNG0Q
KXQHVJG.KUVKPI4WNGUQHVJG%QNQODQ5VQEM'ZEJCPIGRGTEGPVCIGQHRWDNKEJQNFKPICUCVUV&GEGODGTYCU
CRRTQZKOCVGN[
CUCVUV&GEGODGT
#URGT4WNG0QQHVJG.KUVKPI4WNGUQHVJG%QNQODQ5VQEM'ZEJCPIG0QQHUJCTGJQNFGTUTGRTGUGPVKPIRWDNKEJQNFKPICUCVUV
&GEGODGT
CUCVUV&GEGODGT

INVESTOR RELATIONS
4 SHARE TRADING
VOTING 2022 2021
Number of Transactions 13,373

0WODGTQH5JCTGU6TCFGF
/P 31 151
8CNWGQH5JCTGU6TCFGF
4U/P 2,701
NON VOTING 2022 2021
Number of Transactions 6,199

0WODGTQH5JCTGU6TCFGF
/P 4 102
8CNWGQH5JCTGU6TCFGF
4U/P 479
5 DIVIDENDS
2022 2021
%CUJ&KXKFGPF
4U - Cash Dividend
5ETKR&KXKFGPF
4U 5 Scrip Dividend 2.50
%CUJ&KXKFGPFRC[QWVTCVKQ
- %CUJ&KXKFGPFRC[QWVTCVKQ
20
6 EARNINGS
VOTING 2022 2021
)TQWR'CTPKPIU2GT5JCTG
4U 28.62
2TKEG'CTPKPIUTCVKQ
6KOGU8QVKPI5JCTGU 2.76 3.73
7 MARKET VALUES
Highest /RZHVW Year End

Rs. Rs. Rs.
8QVKPI 271.00 220.00 249.00

0QP8QVKPI 214.00 184.10 195.00
8QVKPI 257.50 200.00 214.00
0QP8QVKPI 200.00 150.00
8QVKPI 214.90 130.50 172.20
0QP8QVKPI 118.30 135.50
8QVKPI 173.20 91.70
0QP8QVKPI 74.70
8QVKPI 170.00 123.50 135.00
0QP8QVKPI 92.00 122.25
2022 8QVKPI 145.00 72.00 78.90
0QP8QVKPI 135.50 64.90 70.00
INVESTOR RELATIONS
Dividend Per Share and Shareholder Funds and HNB Group Net Assets Per Share and
Dividend Yield Market Capitalization Closing Price Per Share
Rs % Rs Mn Rs
10 14 200,000 400
12 350
8 150,000 300
10
6 250
8
100,000 200
4 6 150
4 50,000 100
2
2 50
0 0 0 0
2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
Group net assets per share
Dividend per share Capital & reserves
Closing price per share
Dividend yield % - cash (voting) HNB market capitalization
Dividend yield % - total (voting)
8 MARKET CAPITALISATION (AS AT 31ST DECEMBER)
%CRKVCN *0$ CSE *0$/CTMGV /CTMGV

Reserves /CTMGV /CTMGV %CRKVCNK\CVKQP %CRKVCNK\CVKQP
%CRKVCNK\CVKQP %CRKVCNK\CVKQP CUCQH 4CPMKPI
%5'/CTMGV
%CRKVCNK\CVKQP
Rs Mn Rs Mn Rs Mn
2017 3.37 5

2018 2.98 5
2019 2.42 9
2020 1.75
2021 1.04 22
2022 159,327 33,804 3,847,150 0.88 26
*0$/CTMGV%CRKVCNKUCVKQPKPENWFGQPN[8QVKPIUJCTGU
9 PUBLIC SHAREHOLDING
2022 % 2021 %
Number Number
0WODGTQHUJCTGJQNFGTUTGRTGUGPVKPIVJGRWDNKEJQNFKPI
8QVKPI 8,260 69
0WODGTQHUJCTGJQNFGTUTGRTGUGPVKPIVJGRWDNKEJQNFKPI
0QP8QVKPI 11,274 99 99
%QORNCKPVWPFGT1RVKQP(NQCV#FLWUVGF/CTMGV%CRKVCNK\CVKQP
4U$P 23.3 39.2

10. INFORMATION ON MOVEMENT IN SHARE CAPITAL
Year Issue $CUKU No. of Shares
Prior to Public issue

1971 Public issue
1977 4KIJVUKUUWG
"4U
1980 4KIJVUKUUWG
"4U
1982 $QPWU
1988 $QPWU
1990 $QPWU
1993 $QPWU
$QPWU
1998 $QPWU
1999 $QPWU
1999 4KIJVU
PQP8QVKPI"4U
2002 $QPWU
2004 4KIJVU
XQVKPI"4UCPFPQP8QVKPI"4U
2005 +UUWGQHWPFGTN[KPI5JCTGUHQT)&4
2007 $QPWU
2009 Shares issued under ESOP
2011 Sub Division of Shares
2011 4KIJVU
XQVKPI"4UCPFPQP8QVKPI"4U
2011 2TKXCVGRNCEGOGPVQHWPUWDUETKDGFTKIJVU
2012 Scrip Dividend
Shares issued under ESOP
Scrip Dividend
2017 Scrip Dividend
2017 4KIJVU+UUWG
XQVKPI"4UCPFPQPXQVKPI"4U
2018 Scrip Dividend
2019 Scrip Dividend
2020 Scrip Dividend
2021 Scrip Dividend
2022 Scrip Dividend 9,650,869
Total
INVESTOR RELATIONS
11 20 MAJOR SHAREHOLDERS (VOTING) OF THE BANK AS AT 31ST DECEMBER 2022
Name % on total % on total No. of Shares No. of Shares

capital YRWLQJFDSLWDO 2022 2021
1. $41905+08'56/'0652.%
%105+56+0)1(5#/2#6*$#0-
2.%$41905+08'56/'0652.%$41905+08'56/'065
2.%#%%17065 7.99 9.99 42,781,221
2. '/2.1;''52418+&'06(70& 7.80 9.75 41,760,448
3. 54+.#0-#+0574#0%'%14214#6+10.6&.+('(70& 8.27 35,420,657
4. /+.(14&':21465
%';.10
286.+/+6'& **7.91 33,879,251
5. 56#55'0':21465
286.+/+6'& 5.48 29,365,409
MR. S.E. CAPTAIN 5.21 27,893,390
7. 510'661*1.&+0)5.+/+6'& 3.93 4.91 21,057,534
8. 54+.#0-#+0574#0%'%14214#6+10.6&)'0'4#.(70& 3.40 4.25 18,197,265
9. &+56+..'4+'5%1/2#0;1(54+.#0-#2.% 2.45 **3.07 13,138,456
10. %+6+$#0-0'9;14-5#014)'5$#0-#%%1706 2.95 12,648,965
11. 0#6+10#.5#8+0)5$#0- 2.30 2.87 12,293,280
12. &10#0&&10*1.&+0)5
24+8#6'.+/+6'&
%105+56+0)
1(2'12.' 5.'#5+0)(+0#0%'2.%&10#0&&10
*1.&+0)5
24+8#6'.+/+6'&&10#0&&10*1.&+0)5

24+8#6'.+/+6'& 2.17 2.71 11,612,806
13. 4$%+08'56145'48+%'5647564$%'/'4)+0)/#4-'65
5/#..%#2'37+6;(70& 1.75 2.19 9,396,056
14. /4&00.1-7)' 2.08 8,909,890
15. 56#0&#4&%*#46'4'&$#0-5+0)#214'5#*.$#0-
5+0)#214'$4#0%* 1.50 1.88 8,041,493
/5.#%#26#+0 1.50 1.87 8,007,163
17. (+0%1*1.&+0)5
24+8#6'.+/+6'& 1.57 6,747,077
18. 5+/10#5647565'48+%'286.6& 0.81 1.02 4,360,582
19. '/2.1;''564756(70&$1#4& 0.59 0.74 3,162,155
20. /45851/#570&'4#/ 0.51 2,745,697
Sub total 82.02 351,418,795
7PTGIKUVGTGF5JCTGU 0.18 0.23 978,609
$CNCPEGJGNFD[XQVKPIUJCTGJQNFGTU 14.20 17.75 76,045,581

6QVCNXQVKPIUJCTGJQNFGTU
6QVCNXQVKPIUJCTGU 80.00 100.00 428,442,985
5JCTGUJGNFD[0QPXQVKPIUJCTGJQNFGTU 20.00 107,112,457
Total No. of Ordinary shares 100.00 535,555,442
+%
EQHVJG$CPMKPI#EV
2WTUWCPVVQVJGRTQXKUKQPUQHVJG$CPMKPI#EV&KTGEVKQPU0QQHVJGVQVCNEQNNGEVKXGXQVKPITKIJVUKPVJG$CPMQH/KNHQTF'ZRQTVU
%G[NQP
.KOKVGF5VCUUGP'ZRQTVU.KOKVGFCPF&KUVKNNGTKGU%QORCP[QH5TK.CPMC
YJQEQNNGEVKXGN[JQNFQHVJGXQVKPIUJCTGUQHVJG$CPMCTGNKOKVGFVQ
QHVJGVQVCNXQVKPITKIJVUQHVJG$CPMYKVJGHHGEVHTQOVJ/CTEJCUVJGXQVKPITKIJVUKPGZEGUUQHUWEJRGTEGPVCIGKUFGGOGFKPXCNKFHTQO
that date.

12 20 MAJOR SHAREHOLDERS (NON-VOTING) OF THE BANK AS AT 31ST DECEMBER 2022
Name QPVQVCN QPVQVCN No. of Shares No. of Shares

capital XQVKPIECRKVCN 2022 2021
1. $41905+08'56/'0652.%
%105+56+0)1(5#/2#6*$#0-
2.%$41905+08'56/'0652.%$41905+08'56/'065
2.%#%%17065 9.17 45.87 49,131,696
2. #%7+6;2#460'45
286.+/+6'&/4'.#;#6*#/$;
6*#8#)0#0#5114+;#//4'.#;#6*#/$;
6*#8#)0#0#570&#4#/ 1.00 5.02 5,372,196
3. #-$#4$416*'45286.6&#%01 0.89 4.43 4,745,503
4. MR. S.E. CAPTAIN 0.31 1.55 1,658,622
5. '/2.1;''564756(70&$1#4& 0.30 1.48 1,581,198
*#66100#6+10#.$#0-2.%#%01 0.14 0.72 770,799
7. 5#$114%*#6114
286.6& 0.14 733,462
8. MR. E. CHATOOR 0.13 694,370
9. /4,&$#0&#4#0#;#-'
,1+06&48
$#0&#4#0#;#-',1+06/+55+$#0&#4#0#;#-' 0.11 0.55 588,621
10. /4,&$#0&#4#0#;#-'
,1+06/+550
$#0&#4#0#;#-',1+06&48$#0&#4#0#;#-' 0.11 0.55 588,521
11. '9$#.#574+;#%1
286.6& 0.10 0.50 535,046
12. 2'12.' 5.'#5+0)(+0#0%'2.%/4+&42'4'4# 0.10 0.49 525,613
13. &10#0&&10*1.&+0)524+8#6.+/+6'& 0.09 0.44 471,409
14. /+554*#$&7.*755'+0 0.09 0.43 461,334
15. /4/,('40#0&1 0.08 0.41 438,508
&44&$#0&#4#0#+-' 0.08 0.39 414,547
17. *#66100#6+10#.$#0-2.%#42+%1#6#4#:+#'37+6;
+0%1/'(70& 0.07 0.37 392,414
18. .#0-#5;06*'6+%(+$4'%1.6& 0.07 390,200
19. /4;*#$&7.*755'+0 0.07 380,768
20. /4/86*'#)#4#,#* 0.07 0.32 356,904
Sub total 13.11 70,231,731
$CNCPEGJGNFD[0QPXQVKPIUJCTGJQNFGTU 34.43 36,880,726

6QVCN0QPXQVKPIUJCTGJQNFGTU
6QVCN0QPXQVKPIUJCTGU 20.00 100.00 107,112,457
5JCTGUJGNFD[XQVKPIUJCTGJQNFGTU 59.82 320,351,919
7PTGIKUVGTGFXQVKPI5JCTGU 0.18 978,609
6QVCNXQVKPIUJCTGU 80.00 428,442,985
Total No. of Ordinary shares 100.00 535,555,442
+%
EQHVJG$CPMKPI#EV
INVESTOR RELATIONS
13 DEBENTURE INFORMATION
HNB SUBORDINATED DEBENTURES 2006
i) Market Value
12 months ended 31st December 2022.
6JGUGFGDGPVWTGUJCXGPQVVTCFGFFWTKPIVJG[GCTGPFGFUV&GEGODGT
ii) Interest Rate
12 months ended 31st December.

Amount Coupon Annual Interest Amount Coupon Annual Interest
Rs 000 Rate % (IIHFWLYH Rate of Rs 000 Rate % (IIHFWLYH Rate of
Rate % comparable Rate % comparable
*RYW *RYW
Security % Security %
[GCT(KZGF4CVG
RC 1,193,302 - 11.25 25.72 11.25 9.13

<GTQ%QWRQP

i) Market Value
Market Value Traded Yield (%)

Highest Rs /RZHVW5V Last Traded Rs Highest /RZHVW Last Traded
[GCT(KZGF4CVG
RC 100.76 100.76 100.76 13.9 13.9 13.9
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC N/A N/A N/A N/A 7.88

HNB SENIOR DEBENTURES 2013
i) Market Value
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC 1,978,910 8.00 14.25 24.68 8.00 14.25 8.58
HNB SENIOR DEBENTURES 2014

i) Market Value
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC 84,040 8.33 8.50 26.51 8.33 8.50 9.50
INVESTOR RELATIONS

i) Market Value
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC 4,086,904 13.00 13.00 24.99 13.00 13.00 8.75

i) Market Value
Market Value Traded Yield (%)

Highest Rs /RZHVW5V Last Traded Rs Highest /RZHVW Last Traded
[GCT(KZGF4CVG
RC 74 74 74 30.4 30.4 30.4
[GCTFGDGPVWTGUJCXGPQVVTCFGFFWTKPIVJG[GCTGPFGFUV&GEGODGT
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC 1,987,358 12.30 12.30 26.61 12.30 12.30 9.32
[GCT(KZGF4CVG
RC 8,360,693 12.80 12.80 27.58 12.80 12.80

i) Market Value
ii) Interest Rate

*RYW *RYW
[GCT(KZGF4CVG
RC 7,286,042 9.50 9.50 25.91 9.50 9.50 11.79
Note: HNB Senior Debenture information is listed under Debt Securities issued, Note 47 of the Financial Position.
Note: HNB Debenture information is listed under Subordinated Term Debts, Note 52 of the Financial Position.
Ratios 2022 2021
&GDVVQ'SWKV[4CVKQ
30.91 28.27
+PVGTGUV%QXGT
6KOGU 3.98 5.49
.KSWKFKV[#UUGV4CVKQ
.#4
33.95 28.02
&GDVKPENWFGU$QTTQYKPIUCPF&GDGPVWTGU
+PENWFGUKPVGTGUVRCKFQP$QTTQYKPIUCPF&GDGPVWTGU
INDEPENDENT ASSURANCE STATEMENT
Introduction &08oUCUUWTCPEGGPICIGOGPVUCTGDCUGFQPVJGCUUWORVKQPVJCVVJG
&08TGRTGUGPVGFD[&08$WUKPGUU#UUWTCPEG.CPMC
2TKXCVG.KOKVGF data and information provided by the client to us as part of our review
n&08oJCUDGGPEQOOKUUKQPGFD[VJGOCPCIGOGPVQH*CVVQP0CVKQPCN JCXGDGGPRTQXKFGFKPIQQFHCKVJCPFHTGGHTQOOCVGTKCNOKUUVCVGOGPVU

$CPM2.%
n*0$oQTnVJG$CPMo%QTRQTCVG4GIKUVTCVKQP0WODGT23 QTGTTQTU9GYGTGPQVKPXQNXGFKPVJGRTGRCTCVKQPQHCP[UVCVGOGPVUQT
VQECTT[QWVCPKPFGRGPFGPVCUUWTCPEGGPICIGOGPVQHKVUPQPƂPCPEKCN data included in the Report except for this Assurance Statement.
UWUVCKPCDKNKV[RGTHQTOCPEGFKUENQUGFKPVJG$CPMoU#PPWCN4GRQTV
9GFKFPQVEQOGCETQUUNKOKVCVKQPUVQUEQRGQHVJGCITGGFCUUWTCPEG
nVJG4GRQTVoKPKVURTKPVGFHQTOCV6JGPQPƂPCPEKCNRGTHQTOCPEGKPVJKU
CITGGOGPVFWTKPIQWTCUUWTCPEGRTQEGUU9GWPFGTUVCPFVJCVCP[
4GRQTVEQXGTUVJGFKUENQUWTGUTGNCVGFVQOCVGTKCNVQRKEUHQTVJGTGRQTVKPI
TGRQTVGFFCVCQPƂPCPEKCNRGTHQTOCPEGQHVJG$CPMCPFVJG)TQWR
RGTKQFUV,CPWCT[VQUV&GEGODGT6JGUWUVCKPCDKNKV[
KPENWFKPIKVUUWDUKFKCTKGUYKVJKPVJG4GRQTVCTGDCUGFQPƂPCPEKCN
FKUENQUWTGUKPVJKU4GRQTVJCXGDGGPRTGRCTGFD[*0$DCUGFQPVJG
disclosures and data which has been subjected to a separate
)WKFKPI2TKPEKRNGUCPF%QPVGPV'NGOGPVUQHVJG+PVGTPCVKQPCN+4
independent statutory audit process and is not included in our scope of
(TCOGYQTM
&GEGODGTVJGn+4 (TCOGYQTMoQHVJG+PVGTPCVKQPCN
YQTM
+PVGITCVGF4GRQTVKPI%QWPEKN
n++4%oCPFVJG)NQDCN4GRQTVKPI+PKVKCVKXGoU
)4+oU5WUVCKPCDKNKV[4GRQTVKPI5VCPFCTFU
n)4+5VCPFCTFUoVQDTKPI Basis of our opinion
QWVVJGXCTKQWU%QPVGPV'NGOGPVUQHVJG+4 (TCOGYQTMCUYGNNCU
RGTHQTOCPEGVTGPFUTGNCVGFVQKFGPVKƂGFOCVGTKCNVQRKEU6JGTGRQTVKPI 9GRNCPPGFCPFRGTHQTOGFQWTYQTMVQQDVCKPVJGGXKFGPEGEQPUKFGTGF
VQRKEDQWPFCTKGUHQTPQPƂPCPEKCNRGTHQTOCPEGCTGDCUGFQPVJGKPVGTPCN PGEGUUCT[VQRTQXKFGCDCUKUHQTQWTCUUWTCPEGQRKPKQPCPFCURCTVQH
CPFGZVGTPCNOCVGTKCNKV[CUUGUUOGPVECTTKGFQWVD[*0$CPFEQXGTU VJGCUUWTCPEGGPICIGOGPVCOWNVKFKUEKRNKPCT[VGCOQHUWUVCKPCDKNKV[
KFGPVKƂGFOCVGTKCNVQRKEUHQTVJG$CPMoUQRGTCVKQPUCUDTQWIJVQWVKPVJG and assurance specialists conducted onsite and remote assessments and
4GRQTVKPVJGUGEVKQPn#DQWVVJG4GRQTVo KPVGTCEVKQPUYKVJMG[KPVGTPCNUVCMGJQNFGTUCVVJG$CPMoU*GCF1HƂEGKP
%QNQODQCPFUKZ
QRGTCVKQPCNDTCPEJGUQHVJG$CPMKP5TK.CPMCDCUGF
9GRGTHQTOGFQWTCUUWTCPEG
6[RG/QFGTCVGNGXGNCEVKXKVKGUDCUGFQP QP&08oUUCORNKPIRNCP9GCFQRVGFCTKUMDCUGFCRRTQCEJVJCVKUYG
#EEQWPV#DKNKV[oU###UUWTCPEG5VCPFCTFXCPF&08oUCUUWTCPEG EQPEGPVTCVGFQWTQPUKVGCPFTGOQVGXGTKƂECVKQPGHHQTVUQPVJGKUUWGU
OGVJQFQNQI[8GTK5WUVCKPTM1RTQVQEQN+PFQKPIUQYGGXCNWCVGFVJG QHJKIJOCVGTKCNTGNGXCPEGVQVJG$CPMCPFKVUMG[UVCMGJQNFGTU9G
SWCNKVCVKXGCPFSWCPVKVCVKXGFKUENQUWTGURTGUGPVGFKPVJG4GRQTVVQIGVJGT WPFGTVQQMVJGHQNNQYKPICEVKXKVKGU
YKVJWUKPIVJG)WKFKPI2TKPEKRNGUQHVJG+4 (TCOGYQTMVQIGVJGTYKVJ r 4GXKGYGFVJG$CPMoUCRRTQCEJVQCFFTGUUKPIVJG)WKFKPI2TKPEKRNGU
*0$oURTQVQEQNUHQTJQYVJGPQPƂPCPEKCNRGTHQTOCPEGYCUOGCUWTGF CPF%QPVGPV'NGOGPVUQHVJG+4 (TCOGYQTMKPENWFKPIUVCMGJQNFGT
TGEQTFGFCPFTGRQTVGF1WTCUUWTCPEGGPICIGOGPVYCURNCPPGFCPF GPICIGOGPVCPFKVUOCVGTKCNKV[FGVGTOKPCVKQPRTQEGUU
carried out in December 2022 to February 2023.
r 8GTKƂGFVJGXCNWGETGCVKQPFKUENQUWTGUTGNCVGFVQVJGECRKVCNU
6JGKPVGPFGFWUGTQHVJKUCUUWTCPEGUVCVGOGPVKUVJG/CPCIGOGPV KFGPVKƂGFD[VJG$CPM
ECRKVCNUQHVJG+4 (TCOGYQTMCPF&KIKVCN
QH*0$9GFKUENCKOCP[NKCDKNKV[QTTGURQPUKDKNKV[VQCVJKTFRCTV[HQT %CRKVCNCUYGNNCUENCKOUOCFGKPVJG4GRQTV
FGEKUKQPUYJGVJGTKPXGUVOGPVQTQVJGTYKUGDCUGFQPVJKU#UUWTCPEG
r #UUGUUGFVJGTQDWUVPGUUQHVJGFCVCOCPCIGOGPVU[UVGOFCVC
5VCVGOGPV9GRNCPPGFCPFRGTHQTOGFQWTYQTMVQQDVCKPVJGGXKFGPEG
CEEWTCE[KPHQTOCVKQPƃQYCPFEQPVTQNUHQTVJGTGRQTVGFFKUENQUWTGU
we considered necessary to provide a basis for our assurance opinion
CPFVJKURTQEGUUFKFPQVKPXQNXGGPICIGOGPVYKVJCP[GZVGTPCN r 'ZCOKPGFCPFTGXKGYGFUGNGEVGFGXKFGPEGKPENWFKPIFQEWOGPVU
UVCMGJQNFGTU FCVCCPFQVJGTKPHQTOCVKQPOCFGCXCKNCDNGD[VJG$CPMTGNCVGFVQ
PQPƂPCPEKCNFKUENQUWTGURTGUGPVGFYKVJKPVJG4GRQTV
Responsibilities of the Management of HNB and of the
Assurance Provider r %QPFWEVGFKPVGTXKGYUYKVJVQRCPFUGPKQTOCPCIGOGPVVGCOQHVJG
$CPMCPFQVJGTTGRTGUGPVCVKXGUKPENWFKPIFCVCQYPGTUCPFFGEKUKQP
6JG/CPCIGOGPVQHVJG$CPMJCUVJGUQNGTGURQPUKDKNKV[HQTVJG
OCMGTUHTQOFKHHGTGPVFKXKUKQPUCPFHWPEVKQPUQHVJG$CPMVQXCNKFCVG
RTGRCTCVKQPQHVJG4GRQTVCUYGNNCUVJGRTQEGUUGUHQTEQNNGEVKPI
VJGPQPƂPCPEKCNFKUENQUWTGU9GYGTGHTGGVQEJQQUGKPVGTXKGYGGU
CPCN[\KPICPFTGRQTVKPIVJGKPHQTOCVKQPRTGUGPVGFKPVJG4GRQTVCPF
CPFKPVGTXKGYGFVJQUGYKVJQXGTCNNTGURQPUKDKNKV[VQFGNKXGTVJG$CPMoU
CNUQTGURQPUKDNGHQTGPUWTKPIVJGOCKPVGPCPEGCPFKPVGITKV[QHKVU
UWUVCKPCDKNKV[QDLGEVKXGU
YGDUKVGCPFCP[TGHGTGPEGFFKUENQUWTGUQPPQPƂPCPEKCNRGTHQTOCPEG
CPFOCPCIGOGPVCRRTQCEJ+PRGTHQTOKPIVJKUCUUWTCPEGYQTM&08oU
r 4GXKGYQHRTQEGUUGUCPFU[UVGOUHQTRTGRCTKPIUKVGNGXGN
TGURQPUKDKNKV[KUVQVJG/CPCIGOGPVQH*0$JQYGXGTVJKUUVCVGOGPV
UWUVCKPCDKNKV[PQPƂPCPEKCNFCVCCPFKORNGOGPVCVKQPQHUWUVCKPCDKNKV[
represents our independent opinion and is intended to inform the
UVTCVGI[VJTQWIJQPUKVGCPFTGOQVGCUUGUUOGPVUCPFKPVGTXKGYUYKVJ
QWVEQOGQHVJGCUUWTCPEGVQVJGUVCMGJQNFGTUQHVJG*0$
OCPCIGOGPVVGCOUCV*0$oU4GIKQPCN1HƂEGCPFUKZ
DTCPEJGU
1
The VeriSustain protocol is available on request from www.dnv.com .The protocol is based on our professional experience, international assurance best practice including
International Standard on Assurance Engagements 3000 (ISAE 3000) Revised (Assurance Engagements other than Audits or Reviews of Historical Financial Information)
>`ÌiL>,i«ÀÌ}Ì>ÌÛi½Ã,½Ã®*ÀV«iÃvÀiw},i«ÀÌ
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Project Number: PRJN-506928-2023-AST-LKA

HTQOVJG/CTKVKOGFKUVTKEVQH,CHHPC0QTVJGTP2TQXKPEGQH5TK.CPMC YGTGTGXKGYGFFWTKPIVJGTGRQTVKPIRGTKQFVJTQWIJXKGYUQHUGPKQT
KPENWFKPI2QKPV2GFTQ$TCPEJ0GNNKCF[$TCPEJ%JWPPCMCO$TCPEJ OCPCIGOGPVCUYGNNCUMG[UVCMGJQNFGTITQWRUCPF*0$EQPƂTOGFVJG
6JKTWPGNXGN[$TCPEJ,CHPC/GVTQ$TCPEJCPF,CHPC/CKPDTCPEJ9G EQPVKPWKPITGNGXCPEGQHKVUGZKUVKPIOCVGTKCNVQRKEUCPFVQRKEDQWPFCTKGU
YGTGHTGGVQEJQQUGVJGUKVGUYGUCORNGFHQTQWTQPUKVGCUUGUUOGPVU +PQWTQRKPKQPVJG%QORCP[FQGUPQVOKUUQWVCP[MPQYPOCVGTKCN
VQRKEUTGNCVGFVQKVUEJQUGPTGRQTVKPIDQWPFCT[
r 2GTHQTOGFUCORNGDCUGFTGXKGYUQHVJGOGEJCPKUOUHQT
KORNGOGPVKPIVJG$CPMoUUWUVCKPCDKNKV[TGNCVGFRQNKEKGUCUFGUETKDGF Nothing has come to our attention to suggest that the Report does not
KPVJG4GRQTV iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv>ÌiÀ>ÌÞ°
r 2GTHQTOGFUCORNGDCUGFEJGEMUQHVJGRTQEGUUGUHQTIGPGTCVKPI Responsiveness
ICVJGTKPICPFOCPCIKPIVJGSWCPVKVCVKXGFCVCCPFSWCNKVCVKXG
/iiÝÌiÌÌÜV>À}>â>ÌÀiÃ«`ÃÌÃÌ>iìÀÃÃÕiÃ°
information included in the Report based on the selected GRI
Standards. 6JG4GRQTVDTKPIUQWVVJG%QORCP[oUTGURQPUGUVQMG[OCVGTKCN
KUUWGUVJTQWIJFGUETKRVKQPUQHVJG%QORCP[oURQNKEKGUUVTCVGIKGUCPF
Opinion and Observations OCPCIGOGPVU[UVGOUKPENWFKPIMG[RGTHQTOCPEGKPFKECVQTUHQTVJG
1PVJGDCUKUQHQWTCUUWTCPEGYQTMWPFGTVCMGPPQVJKPIJCUEQOGVQQWT KFGPVKƂGFOCVGTKCNVQRKEUWUKPIUGNGEVGF)4+5VCPFCTFUCPFQVJGTINQDCN
CVVGPVKQPVQUWIIGUVVJCVVJG4GRQTVFQGUPQVRTQRGTN[FGUETKDG*0$oU UVCPFCTFUYJKEJCTGQHTGNGXCPEGVQVJG%QORCP[CPFKVUUVCMGJQNFGTU
CFJGTGPEGVQVJGETKVGTKCQHTGRQTVKPI
)WKFKPI2TKPEKRNGUCPF%QPVGPV Nothing has come to our attention to suggest that the Report does not
'NGOGPVUTGNCVGFVQVJG+4 (TCOGYQTMTGRTGUGPVCVKQPQHVJGOCVGTKCN iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv,iÃ«ÃÛiiÃÃ°
VQRKEUDWUKPGUUOQFGNFKUENQUWTGUQPXCNWGETGCVKQPVJTQWIJKFGPVKƂGF
ECRKVCNUTGNCVGFUVTCVGIKGUCPFOCPCIGOGPVCRRTQCEJCPFEJQUGPVQRKE Impact
URGEKƂEFKUENQUWTGUHTQOVJG)4+5VCPFCTFUHQTKFGPVKƂGFOCVGTKCNVQRKEU
9KVJQWVCHHGEVKPIQWTCUUWTCPEGQRKPKQPYGCNUQRTQXKFGVJGHQNNQYKPI /iiÛiÌÜV>À}>â>ÌÌÀÃ]i>ÃÕÀiÃ>`Ã
observations. >VVÕÌ>LivÀÜÌÃ>VÌÃ>vviVÌÌÃLÀ>ìÀiVÃÞÃÌiÃ°
6JG4GRQTVDTKPIUQWVVJGMG[RGTHQTOCPEGOGVTKEUUWTXG[UCPF
OCPCIGOGPVRTQEGUUGUWUGFD[*0$VQOQPKVQTOGCUWTGCPFGXCNWCVG
Principles of the AA1000 Accountability Principles Standard KVUUKIPKƂECPVFKTGEVCPFKPFKTGEVKORCEVUNKPMGFVQKFGPVKƂGFOCVGTKCN
(2018) Inclusivity VQRKEUCETQUUVJG%QORCP[KVUUKIPKƂECPVXCNWGEJCKPGPVKVKGUCPFMG[
/i«>ÀÌV«>ÌvÃÌ>iìÀÃìÛi«}>`>ViÛ}> UVCMGJQNFGTITQWRU
>VVÕÌ>Li>`ÃÌÀ>Ìi}VÀiÃ«ÃiÌ-ÕÃÌ>>LÌÞ° Nothing has come to our attention to suggest that the Report does not
6JG4GRQTVDTKPIUQWVVJGGPICIGOGPVRNCVHQTOUCPFU[UVGOUYJKEJ iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv«>VÌ°
JCXGDGGPGUVCDNKUJGFHQTKFGPVKH[KPIMG[UVCMGJQNFGTEQPEGTPUCPF
GZRGEVCVKQPU6JG%QORCP[JCUKFGPVKƂGFGORNQ[GGUCPFEQPVTCEVWCN 6SHFĽF(YDOXDWLRQRIWKH,QIRUPDWLRQRQ6XVWDLQDELOLW\
GORNQ[GGUXGPFQTUNQECNEQOOWPKVKGUTGIWNCVQTUKPXGUVQTU Performance
UJCTGJQNFGTUEWUVQOGTUCPFOGFKCCUKVUMG[UVCMGJQNFGTITQWRU6JG 9GEQPUKFGTVJGOGVJQFQNQI[CPFVJGRTQEGUUHQTICVJGTKPIKPHQTOCVKQP
%QORCP[KFGPVKƂGUCPFRTKQTKVK\GUKVUHQTOCNCPFKPHQTOCNRTQEGUUGU FGXGNQRGFD[*0$HQTKVUUWUVCKPCDKNKV[RGTHQTOCPEGTGRQTVKPIVQDG
HQTGPICIGOGPVYKVJKVUUKIPKƂECPVUVCMGJQNFGTUDCUGFQPUKIPKƂECPEG CRRTQRTKCVGCPFDQVJSWCNKVCVKXGCPFSWCPVKVCVKXGFCVCKPENWFGFKP
QHCEVWCNCPFRQVGPVKCNKORCEVUQHVJG%QORCP[oUCEVKXKVKGUCPFVJGUG VJG4GRQTVYCUHQWPFVQDGKFGPVKƂCDNGCPFVTCEGCDNGVJGRGTUQPPGN
RTQEGUUGUCTGDTQWIJVQWVYKVJKPVJG4GRQTVCNQPIYKVJVJGKFGPVKƂGF TGURQPUKDNGYGTGCDNGVQFGOQPUVTCVGVJGQTKIKPCPFKPVGTRTGVCVKQPQH
GZRGEVCVKQPUCPFEQPEGTPUQHUVCMGJQNFGTUCUYGNNCU*0$oUTGURQPUGU the data and its reliability.
Nothing has come to our attention to suggest that the Report does not
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Reliability
Materiality /i>VVÕÀ>VÞ>`V«>À>LÌÞvvÀ>Ì«ÀiÃiÌi`ÌiÀi«ÀÌ]
/i«ÀViÃÃvìÌiÀ}ÌiÃÃÕiÃÌ>Ì>ÀiÃÌÀiiÛ>ÌÌ> >ÃÜi>ÃÌiµÕ>ÌÞvÕìÀÞ}`>Ì>>>}iiÌÃÞÃÌiÃ°
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6JG4GRQTVDTKPIUQWV*0$oURTQEGUUHQTKFGPVKƂECVKQPQHOCVGTKCN SWCNKVCVKXGCPFSWCPVKVCVKXGFKUENQUWTGUEQPUKFGTKPIVJGRTKPEKRNGQH
VQRKEUYJKEJJCXGFKTGEVCPFKPFKTGEVKORCEVUQPVJG%QORCP[oUCDKNKV[ 4GNKCDKNKV[/QUVFCVCCPFKPHQTOCVKQPXGTKƂGFVJTQWIJCUUGUUOGPVUYKVJ
VQETGCVGRTGUGTXGCPFGPJCPEGXCNWGUHQTUWUVCKPCDNGFGXGNQROGPV VJG%QORCP[oU%QTRQTCVG1HƂEGCPFUCORNGFUKVGUYGTGHQWPFVQDG
which was carried out in 2022. This process and related outcomes CEEWTCVG5QOGQHVJGFCVCKPCEEWTCEKGUKFGPVKƂGFFWTKPIVJGXGTKƂECVKQP
INDEPENDENT ASSURANCE STATEMENT
RTQEGUUYGTGHQWPFVQDGCVVTKDWVCDNGVQVTCPUETKRVKQPKPVGTRTGVCVKQP 6JG4GRQTVDTKPIUQWVUWUVCKPCDKNKV[KUUWGUEJCNNGPIGUUVCMGJQNFGT
CPFCIITGICVKQPGTTQTU6JGUGKFGPVKƂGFGTTQTUYGTGEQOOWPKECVGFCPF EQPEGTPUCPFRGTHQTOCPEGKPCPGWVTCNVQPGKPVGTOUQHEQPVGPVCPF
UWDUGSWGPVN[EQTTGEVKQPUOCFGKPVJGTGRQTVGFFKUENQUWTGU RTGUGPVCVKQPCRRN[KPICFGSWCVGEQPUKFGTCVKQPVQPQVWPFWN[KPƃWGPEG
Nothing has come to our attention to suggest that the Report does not UVCMGJQNFGTUoQRKPKQPUOCFGDCUGFQPVJGTGRQTVGFFKUENQUWTGU
iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv,i>LÌÞ° Nothing has come to our attention to suggest that the Report does not
iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv iÕÌÀ>ÌÞ°
Additional principles as per DNV VeriSustain Completeness
Statement of Competence and Independence
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ÌiÀ}>â>Ì>`ÌÃÃÌ>iìÀÃÃÀi«ÀÌi`° &08CRRNKGUKVUQYPOCPCIGOGPVUVCPFCTFUCPFEQORNKCPEGRQNKEKGU
HQTSWCNKV[EQPVTQNKPCEEQTFCPEGYKVJ+51+'%%QPHQTOKV[
6JG4GRQTVDTKPIUQWVFKUENQUWTGUTGNCVGFVQ*0$oUPQPƂPCPEKCN
#UUGUUOGPV4GSWKTGOGPVUHQTDQFKGURTQXKFKPICWFKVCPFEGTVKƂECVKQP
UWUVCKPCDKNKV[RGTHQTOCPEGEQPUKFGTKPIVJGRTKPEKRNGQH%QORNGVGPGUU
QHOCPCIGOGPVU[UVGOUCPFCEEQTFKPIN[OCKPVCKPUCEQORTGJGPUKXG
CPFVJGEJQUGPUEQRGDQWPFCT[CPFVKOGRGTKQFQHTGRQTVKPI
U[UVGOQHSWCNKV[EQPVTQNKPENWFKPIFQEWOGPVGFRQNKEKGUCPFRTQEGFWTGU
6JG4GRQTVCTVKEWNCVGUFGUETKRVKQPUQHVJG%QORCP[oURQNKEKGUCPF
TGICTFKPIEQORNKCPEGYKVJGVJKECNTGSWKTGOGPVURTQHGUUKQPCNUVCPFCTFU
OCPCIGOGPVCRRTQCEJGUKPENWFKPIMG[RGTHQTOCPEGKPFKECVQTUHQTVJG
CPFCRRNKECDNGNGICNCPFTGIWNCVQT[TGSWKTGOGPVU
KFGPVKƂGFOCVGTKCNVQRKEUWUKPIUGNGEVGF)4+6QRKEURGEKƂE5VCPFCTFU
CPFQVJGTUVCPFCTFUHTCOGYQTMUHQWPFTGNGXCPVVQVJG%QORCP[CPFKVU 9GJCXGEQORNKGFYKVJVJG&08%QFGQH%QPFWEV2FWTKPIVJG
UVCMGJQNFGTU CUUWTCPEGGPICIGOGPVCPFOCKPVCKPKPFGRGPFGPEGYJGTGTGSWKTGF
Nothing has come to our attention to suggest that the Report does not D[TGNGXCPVGVJKECNTGSWKTGOGPVUKPENWFKPIVJG###5X%QFGQH
iiÌÌiÀiµÕÀiiÌÃÀi>Ìi`ÌÌi*ÀV«iv
«iÌiiÃÃÜÌ 2TCEVKEG6JKUGPICIGOGPVYQTMYCUECTTKGFQWVD[CPKPFGRGPFGPV
respect to scope, boundary, and time. VGCOQHUWUVCKPCDKNKV[CUUWTCPEGRTQHGUUKQPCNU9GYGTGPQVKPXQNXGF
in the preparation of any statements or data included in the Report
Neutrality GZEGRVHQTVJKU#UUWTCPEG5VCVGOGPVCPF/CPCIGOGPV4GRQTV&08
/iiÝÌiÌÌÜV>Ài«ÀÌ«ÀÛìÃ>L>>Vi`>VVÕÌv> OCKPVCKPUEQORNGVGKORCTVKCNKV[VQYCTFUVCMGJQNFGTUKPVGTXKGYGFFWTKPI
À}>â>Ì½Ã«iÀvÀ>Vi]ìÛiÀi`>iÕÌÀ>Ìi° VJGCUUWTCPEGRTQEGUU9GFKFPQVRTQXKFGCP[UGTXKEGUVQ*0$QTKVU
UWDUKFKCTKGUKPVJGUEQRGQHCUUWTCPEGHQTVJGTGRQTVKPIRGTKQFVJCVEQWNF
EQORTQOKUGVJGKPFGRGPFGPEGQTKORCTVKCNKV[QHQWTYQTM
(QT&08
Tapan Panda Lead Assessor Prakash Tikare Bhargav Lankalapalli

&08$WUKPGUU#UUWTCPEG %QWPVT[/CPCIGTs+PFKC5TK.CPMC&08$WUKPGUU Technical Reviewer
+PFKC2TKXCVG.KOKVGF #UUWTCPEG.CPMC
2TKXCVG.KOKVGF &08$WUKPGUU#UUWTCPEG+PFKC
India. 5TK.CPMC 2TKXCVG.KOKVGF+PFKC
%QNQODQ5TK.CPMCVJ(GDTWCT[
&08$WUKPGUU#UUWTCPEG.CPMC
2TKXCVG.KOKVGFKURCTVQH&08s$WUKPGUU#UUWTCPEGCINQDCNRTQXKFGTQHEGTVKƂECVKQPXGTKƂECVKQPCUUGUUOGPVCPF
VTCKPKPIUGTXKEGUJGNRKPIEWUVQOGTUVQDWKNFUWUVCKPCDNGDWUKPGUURGTHQTOCPEGYYYFPXEQO
2
DNV Corporate Governance & Code of Conduct - https://www.dnv.com/about/in-brief/corporate-governance.html.

ANNEXURE
APPLICATION OF <IR> GUIDING PRINCIPLES

6JKUTGRQTVKURTGRCTGFKPCEEQTFCPEGYKVJVJG+4 (TCOGYQTMCPFJCUCRRNKGFVJGHQNNQYKPIIWKFKPIRTKPEKRNGU
+4)WKFKPI2TKPEKRNG How we have Complied
5VTCVGIKE(QEWUCPF(WVWTG1TKGPVCVKQP 6JGUVTCVGIKEHQEWUCPFHWVWTGQTKGPVCVKQPKUFGTKXGFD[VJGOCPCIGOGPVVGCOEQPUKFGTKPIKPRWVU
HTQOFKXGTUGUQWTEGUKPENWFKPIQWTTKUMOCPCIGOGPVRTQEGUUCPFGXCNWCVKQPQHGZVGTPCNGPXKTQPOGPV
1WT$CPMUVTCVGI[TGNCVGFVQMG[OCVGTKCNVQRKEUCTGRTGUGPVGFQPRCIGCPFQWTHWVWTGRNCPU
CTGIKXGPKPCNNDWUKPGUUNKPGTGXKGYUCPFVJG%JCKTOCPoUCPF/CPCIKPI&KTGEVQT%'1oUOGUUCIGUQP
RCIGUVQTGURGEVKXGN[
Connectivity of Information 9GJCXGRTQXKFGFNKPMUVQQVJGTTGRQTVUHQTCFFKVKQPCNCPFUWRRQTVKPIKPHQTOCVKQPTGNCVGFVQKFGPVKƂGF

OCVGTKCNVQRKEU6JGXCNWGETGCVKQPHQTUVCMGJQNFGTUQPRCIGRTQXKFGUCPQXGTXKGYQHQWT
DWUKPGUUQRGTCVKQPUCPFKPVGTCEVKQPUDGVYGGPECRKVCNUDWUKPGUUNKPGUTKUMUCPFQRRQTVWPKVKGUCPF
XCNWGFGNKXGTGFVQ5VCMGJQNFGTU
5VCMGJQNFGT4GNCVKQPUJKRU 9GJCXGCRTQEGUUQHUVCMGJQNFGTKFGPVKƂECVKQPCPFGPICIGOGPVCPFFGVCKNUQHUVCMGJQNFGT
GPICIGOGPVCPFTGNCVKQPUJKROCPCIGOGPVKUFKUEWUUGFCPFUKIPRQUVGFQPRCIG
Materiality 6JGRTQEGUUHQTFGVGTOKPKPIOCVGTKCNKV[KUDCUGFQPKFGPVKH[KPITGNGXCPVOCVVGTUCPFGXCNWCVKPI
KORQTVCPEGDCUGFKP+4 HTCOGYQTMCPFKUFGUETKDGFQPRCIG
Conciseness 9GJCXGOCFGGXGT[GHHQTVVQRTGUGPVTGNGXCPVOCVGTKCNKPHQTOCVKQPKPENWFKPIQTICPKUCVKQPCN
EQPVGZVUVTCVGI[IQXGTPCPEGRGTHQTOCPEGCPFRTQURGEVUKPCEQPEKUGCPFGHHGEVKXGOCPPGT
4GNKCDKNKV[%QORNGVGPGUU 9GJCXGGUVCDNKUJGFCPKPVGTPCNCPFGZVGTPCNRTQEGUUQHGXCNWCVKPIQWTPQPƂPCPEKCNFKUENQUWTGUHWTVJGT
GZVGTPCNCWFKVQTUJCXGRTQXKFGFCUUWTCPEGQPƂPCPEKCNUVCVGOGPVUCUIKXGPRCIGCPFPQP
ƂPCPEKCNFKUENQUWTGUTGNCVGFVQVJGKPVGITCVGFTGRQTVKPIHTCOGYQTMJCUDGGPCUUWTGFD[&08CPFVJGKT
+PFGRGPFGPVCUUWTCPEGUVCVGOGPVKUIKXGPQPRCIG
%QPUKUVGPE[%QORCTCDKNKV[ 9GJCXGRTQXKFGFRQUUKDNGEQORCTCDNGKPHQTOCVKQPQPCEQPUKUVGPVDCUKUHQTVJGDGPGƂVQH
UVCMGJQNFGTUVQWPFGTUVCPFQWTRGTHQTOCPEGVTGPFU9JGTGVJGTGJCUDGGPCFGRCTVWTGKP
EQORWVCVKQPQTOGCUWTGOGPVETKVGTKCQTTGUVCVGOGPVUUCOGJCUDGGPKPFKECVGFKPVJGTGNGXCPV
UGIOGPV
GRI INDEX
STATEMENT OF USE
*CVVQP0CVKQPCN$CPM2.%JCUTGRQTVGFKPCEEQTFCPEGYKVJVJG)4+5VCPFCTFUHQTVJGRGTKQFUV,CPWCT[VQUV&GEGODGT
GRI 1 USED
)4+(QWPFCVKQP
GRI Standards Disclosures Reference SDG Goals SDG Targets TCFD Page No
GRI 2: General Disclosures 2021
1TICPK\CVKQPCNFGVCKNU Inner
DCEM
cover
'PVKVKGUKPENWFGFKPVJGQTICPK\CVKQPoUUWUVCKPCDKNKV[TGRQTVKPI 4
4GRQTVKPIRGTKQFHTGSWGPE[CPFEQPVCEVRQKPV 4
Restatements of information
External assurance

#EVKXKVKGUXCNWGEJCKPCPFQVJGTDWUKPGUUTGNCVKQPUJKRU
Employees 8 8.3
9QTMGTUYJQCTGPQVGORNQ[GGU 8 8.3
Governance structure and composition
0QOKPCVKQPCPFUGNGEVKQPQHVJGJKIJGUVIQXGTPCPEGDQF[ 110
%JCKTQHVJGJKIJGUVIQXGTPCPEGDQF[ 103
4QNGQHVJGJKIJGUVIQXGTPCPEGDQF[KPQXGTUGGKPIVJG 109
OCPCIGOGPVQHKORCEVU
&GNGICVKQPQHTGURQPUKDKNKV[HQTOCPCIKPIKORCEVU
4QNGQHVJGJKIJGUVIQXGTPCPEGDQF[KPUWUVCKPCDKNKV[ 231
TGRQTVKPI
%QPƃKEVUQHKPVGTGUV
Communication of critical concerns
%QNNGEVKXGMPQYNGFIGQHVJGJKIJGUVIQXGTPCPEGDQF[ 88
'XCNWCVKQPQHVJGRGTHQTOCPEGQHVJGJKIJGUVIQXGTPCPEG 110
body
Remuneration policies
Process to determine remuneration
Annual total compensation ratio
5VCVGOGPVQPUWUVCKPCDNGFGXGNQROGPVUVTCVGI[
Policy commitments
'ODGFFKPIRQNKE[EQOOKVOGPVU
2TQEGUUGUVQTGOGFKCVGPGICVKXGKORCEVU
/GEJCPKUOUHQTUGGMKPICFXKEGCPFTCKUKPIEQPEGTPU
%QORNKCPEGYKVJNCYUCPFTGIWNCVKQPU
Membership associations 4
#RRTQCEJVQUVCMGJQNFGTGPICIGOGPV
%QNNGEVKXGDCTICKPKPICITGGOGPVU
MATERIAL TOPICS
)4+/CVGTKCN6QRKEU Process to determine material topics
.KUVQHOCVGTKCNVQRKEU
ECONOMIC PERFORMANCES
)4+/CVGTKCN6QRKEU /CPCIGOGPVQHOCVGTKCNVQRKEU
)4+'EQPQOKE2GTHQTOCPEG &KTGEVGEQPQOKEXCNWGIGPGTCVGFCPFFKUVTKDWVGF
(KPCPEKCNKORNKECVKQPUCPFQVJGTTKUMUCPFQRRQTVWPKVKGUFWG 13 13.1
VQENKOCVGEJCPIG
&GƂPGFDGPGƂVRNCPQDNKICVKQPUCPFQVJGTTGVKTGOGPVRNCPU 47
MARKET PRESENCE
)4+/CTMGV2TGUGPEG 2TQRQTVKQPQHUGPKQTOCPCIGOGPVJKTGFHTQOVJGNQECN 8 8.5
community

INDIRECT ECONOMIC IMPACTS
)4++PFKTGEV'EQPQOKE+ORCEVU Infrastructure investments and services supported 372

5KIPKƂECPVKPFKTGEVGEQPQOKEKORCEVU

PROCUREMENT PRACTICES
)4+2TQEWTGOGPV2TCEVKEGU 2TQRQTVKQPQHURGPFKPIQPNQECNUWRRNKGTU
ANTI CORRUPTION
)4+/CVGTKCN6QRKEU /CPCIGOGPVQHOCVGTKCNVQRKEU 117
)4+#PVKEQTTWRVKQP 1RGTCVKQPUCUUGUUGFHQTTKUMUTGNCVGFVQEQTTWRVKQP 117
%QOOWPKECVKQPCPFVTCKPKPICDQWVCPVKEQTTWRVKQPRQNKEKGU
and procedures
%QPƂTOGFKPEKFGPVUQHEQTTWRVKQPCPFCEVKQPUVCMGP
ANTI-COMPETITIVE BEHAVIOUR
)4+#PVKEQORGVKVKXG$GJCXKQWT .GICNCEVKQPUHQTCPVKEQORGVKVKXGDGJCXKQWTCPVKVTWUVCPF 119
monopoly practices
TAX
)4+6CZ Approach to tax 118
6CZIQXGTPCPEGEQPVTQNCPFTKUMOCPCIGOGPV
5VCMGJQNFGTGPICIGOGPVCPFOCPCIGOGPVQHEQPEGTPU
related to tax
ENERGY
)4+'PGTI[ 'PGTI[EQPUWORVKQPYKVJKPVJGQTICPK\CVKQP 75
'PGTI[EQPUWORVKQPQWVUKFGQHVJGQTICPK\CVKQP 75
'PGTI[KPVGPUKV[ 75

4GFWEVKQPQHGPGTI[EQPUWORVKQP 75

4GFWEVKQPUKPGPGTI[TGSWKTGOGPVUQHRTQFWEVUCPFUGTXKEGU 75
BIODIVERSITY
)4+$KQFKXGTUKV[ 5KIPKƂECPVKORCEVUQHCEVKXKVKGURTQFWEVUCPFUGTXKEGUQP 79
biodiversity
Habitats protected or restored 79
EMISSIONS
)4+'OKUUKQPU &KTGEV
5EQRG)*)GOKUUKQPU /GVTKEU 78
6CTIGVUD
'PGTI[KPFKTGEV
5EQRG)*)GOKUUKQPU /GVTKEU 78
6CTIGVUD
1VJGTKPFKTGEV
5EQRG)*)GOKUUKQPU 78
GHG emissions intensity 78
Reduction of GHG emissions 5VTCVGI[D 78
WASTE
)4+9CUVG 9CUVGIGPGTCVKQPCPFUKIPKƂECPVYCUVGTGNCVGFKORCEVU 78

/CPCIGOGPVQHUKIPKƂECPVYCUVGTGNCVGFKORCEVU 78
9CUVGIGPGTCVGF 78

9CUVGFKXGTVGFHTQOFKURQUCN 78
9CUVGFKTGEVGFVQFKURQUCN 78
GRI INDEX
SUPPLIER ENVIRONMENTAL ASSESSMENT
)4+5WRRNKGT'PXKTQPOGPVCN 0GYUWRRNKGTUVJCVYGTGUETGGPGFWUKPIGPXKTQPOGPVCNETKVGTKC
#UUGUUOGPV
0GICVKXGGPXKTQPOGPVCNKORCEVUKPVJGUWRRN[EJCKPCPF
CEVKQPUVCMGP
EMPLOYMENT
)4+'ORNQ[OGPV New employee hires and employee turnover
$GPGƂVURTQXKFGFVQHWNNVKOGGORNQ[GGUVJCVCTGPQV
RTQXKFGFVQVGORQTCT[QTRCTVVKOGGORNQ[GGU
OCCUPATIONAL HEALTH &
SAFETY
)4+1EEWRCVKQPCN*GCNVJCPF 1EEWRCVKQPCNJGCNVJCPFUCHGV[OCPCIGOGPVU[UVGO
Safety 2018
*C\CTFKFGPVKƂECVKQPTKUMCUUGUUOGPVCPFKPEKFGPV
KPXGUVKICVKQP
Occupational health services
9QTMGTRCTVKEKRCVKQPEQPUWNVCVKQPCPFEQOOWPKECVKQPQP
occupational health and safety
9QTMGTVTCKPKPIQPQEEWRCVKQPCNJGCNVJCPFUCHGV[
2TQOQVKQPQHYQTMGTJGCNVJ
TRAINING AND EDUCATION
)4+6TCKPKPICPF'FWECVKQP #XGTCIGJQWTUQHVTCKPKPIRGT[GCTRGTGORNQ[GG

2TQITCOUHQTWRITCFKPIGORNQ[GGUMKNNUCPFVTCPUKVKQP 8
CUUKUVCPEGRTQITCOU
2GTEGPVCIGQHGORNQ[GGUTGEGKXKPITGIWNCTRGTHQTOCPEGCPF
career development reviews
DIVERSITY AND EQUAL OPPORTUNITY
)4+&KXGTUKV[CPF'SWCN &KXGTUKV[QHIQXGTPCPEGDQFKGUCPFGORNQ[GGU
1RRQTVWPKV[
Ratio of basic salary and remuneration of women to men
NON DISCRIMINATION
)4+0QPFKUETKOKPCVKQP +PEKFGPVUQHFKUETKOKPCVKQPCPFEQTTGEVKXGCEVKQPUVCMGP 135
LOCAL COMMUNITIES
)4+.QECN%QOOWPKVKGU 1RGTCVKQPUYKVJNQECNEQOOWPKV[GPICIGOGPVKORCEV
CUUGUUOGPVUCPFFGXGNQROGPVRTQITCOU
1RGTCVKQPUYKVJUKIPKƂECPVCEVWCNCPFRQVGPVKCNPGICVKXG
impacts on local communities
SUPPLIER SOCIAL ASSESSMENT
)4+5WRRNKGT5QEKCN#UUGUUOGPV 0GYUWRRNKGTUVJCVYGTGUETGGPGFWUKPIUQEKCNETKVGTKC

0GICVKXGUQEKCNKORCEVUKPVJGUWRRN[EJCKPCPFCEVKQPUVCMGP
PUBLIC POLICY
)4+2WDNKE2QNKE[ Political contributions

MARKETING AND LABELING
)4+/CTMGVKPICPF.CDGNKPI 4GSWKTGOGPVUHQTRTQFWEVCPFUGTXKEGKPHQTOCVKQPCPF 12 12.8
NCDGNKPI
+PEKFGPVUQHPQPEQORNKCPEGEQPEGTPKPIRTQFWEVCPFUGTXKEG
KPHQTOCVKQPCPFNCDGNKPI
+PEKFGPVUQHPQPEQORNKCPEGEQPEGTPKPIOCTMGVKPI
communications
CUSTOMER PRIVACY
)4+%WUVQOGT2TKXCE[ 5WDUVCPVKCVGFEQORNCKPVUEQPEGTPKPIDTGCEJGUQHEWUVQOGT
privacy and losses of customer data
Other Disclosures (SDG / TCFD)
SDG TCFD
Reference Goals Targets Component Page No
/ Disclosure
ECONOMIC PERFORMANCE
End poverty in all its forms everywhere 1
ENERGY
4GPGYCDNGGPGTI[ 7 7.2
ENVIRONMENTAL COMPLIANCE
5WUVCKPCDNGOCPCIGOGPVCPFGHƂEKGPVWUGQHPCVWTCNTGUQWTEGU 12 12.2
Provide relevant information and awareness for sustainable development and lifestyles in harmony with nature 12 79
+ORTQXGGFWECVKQPCYCTGPGUUTCKUKPICPFJWOCPCPFKPUVKVWVKQPCNECRCEKV[QPENKOCVGEJCPIGOKVKICVKQP 13 13.3 5VTCVGI[E
CFCRVCVKQPKORCEVTGFWEVKQPCPFGCTN[YCTPKPI
)TGCVGTCFQRVKQPQHENGCPCPFGPXKTQPOGPVCNN[UQWPFVGEJPQNQIKGUCPFKPFWUVTKCNRTQEGUUGU 9 9.4
TRAINING AND EDUCATION
Support for education development in the country 4 72
LOCAL COMMUNITIES
2TQXKFGƂPCPEKCNUWRRQTVVQVJGCITKEWNVWTGUGEVQTVQCEJKGXGHQQFUGEWTKV[CPFKORTQXGFPWVTKVKQPCPFRTQOQVG 2 2.3 71
UWUVCKPCDNGCITKEWNVWTG
2TQXKFGCEEGUUVQUCHGCPFCHHQTFCDNGFTKPMKPIYCVGTHQTCNN 71
5CHGCPFCHHQTFCDNGJQWUKPIHQTCNN 11 11.1 70
Health care development in the country 3
4GFWEGGZRQUWTGCPFXWNPGTCDKNKV[VQENKOCVGTGNCVGFGZVTGOGGXGPVUCPFQVJGTGEQPQOKEUQEKCNCPF 1 1.5
GPXKTQPOGPVCNUJQEMUCPFFKUCUVGTU
2TQXKFGƂPCPEKCNUGTXKEGUHQEWUKPIQPYQOGP C 71
REPORTING PRACTICE
+PVGITCVGUWUVCKPCDKNKV[KPHQTOCVKQPKPVQTGRQTVKPIE[ENG 12
PROCUREMENT PRACTICES
2TQOQVGRWDNKERTQEWTGOGPVRTCEVKEGUVJCVCTGUWUVCKPCDNGKPCEEQTFCPEGYKVJPCVKQPCNRQNKEKGUCPFRTKQTKVKGU 12 12.7
EMPLOYMENT
2QNKEKGUCPFRTQEGFWTGUVQETGCVGHTKGPFN[YQTMKPIGPXKTQPOGPV
5.c
DIVERSITY AND EQUAL OPPORTUNITY
5WRRQTVYQOGPoUJGCNVJCPFYGNNDGKPIECTGGTCFXCPEGOGPVGFWECVKQPCEEGUUVQƂPCPEGQTƂPCPEKCN
CUSTOMER PRIVACY
2CTVPGTUJKRYKVJKPVGTPCVKQPCNCPFPCVKQPCNQTICPKUCVKQPVQRTQOQVGUWUVCKPCDNGFGXGNQROGPV 17 17.9
SUSTAINABILITY DISCLOSURE TOPICS &

ACCOUNTING METRICS
TOPIC #%%1706+0)/'64+% CATEGORY 70+61( CODE PAGE NO

/'#574'
Data Security
0WODGTQHFCVCDTGCEJGU
RGTEGPVCIGKPXQNXKPIRGTUQPCNN[ Quantitative 0WODGT (0%$C
KFGPVKƂCDNGKPHQTOCVKQP
2++
PWODGTQHCEEQWPVJQNFGTU 2GTEGPVCIG
affected

&GUETKRVKQPQHCRRTQCEJVQKFGPVKH[KPICPFCFFTGUUKPIFCVC Discussion and PC (0%$C 55
UGEWTKV[TKUMU Analysis
(KPCPEKCN+PENWUKQP
0WODGTCPF
COQWPVQHNQCPU Quantitative 0WODGT (0%$C 50
%CRCEKV[$WKNFKPI QWVUVCPFKPISWCNKƂGFVQRTQITCOUFGUKIPGFVQRTQOQVGUOCNN 4GRQTVKPI
business and community currency
development

0WODGTCPF
COQWPVQHRCUVFWGCPF Quantitative 0WODGT (0%$C 199
PQPCEETWCNNQCPUSWCNKƂGFVQRTQITCOU 4GRQTVKPI
FGUKIPGFVQRTQOQVGUOCNNDWUKPGUUCPF currency
community development
0WODGTQHPQEQUVTGVCKNEJGEMKPICEEQWPVU Quantitative Number (0%$C
RTQXKFGFVQRTGXKQWUN[WPDCPMGFQT
WPFGTDCPMGFEWUVQOGTU
0WODGTQHRCTVKEKRCPVUKPƂPCPEKCNNKVGTCE[ Quantitative Number (0%$C
KPKVKCVKXGUHQTWPDCPMGFWPFGTDCPMGFQT
underserved customers
Incorporation of %QOOGTEKCNCPFKPFWUVTKCNETGFKVGZRQUWTGD[KPFWUVT[ Quantitative 4GRQTVKPI (0%$C 194
'PXKTQPOGPVCN5QEKCN currency
and Governance Factors
in Credit Analysis
Description of approach to incorporation of Discussion and PC (0%$C 123
GPXKTQPOGPVCNUQEKCNCPFIQXGTPCPEG
'5) Analysis
factors in credit analysis
$WUKPGUU'VJKEU Total amount of monetary losses as a result of Quantitative 4GRQTVKPI (0%$C
NGICNRTQEGGFKPIUCUUQEKCVGFYKVJHTCWF currency
KPUKFGTVTCFKPICPVKVTWUVCPVKEQORGVKVKXG
DGJCXKQTOCTMGVOCPKRWNCVKQPOCNRTCEVKEGQT
QVJGTTGNCVGFƂPCPEKCNKPFWUVT[NCYUQT
TGIWNCVKQPU
Description of whistleblower policies and Discussion and PC (0%$C
procedures Analysis
5[UVGOKE4KUM )NQDCN5[UVGOKECNN[+ORQTVCPV$CPM
)5+$ Quantitative $CUKURQKPVU (0%$C 185
/CPCIGOGPV UEQTGD[ECVGIQT[
DRU
Description of approach to incorporation of results of mandatory Discussion and PC (0%$C
CPFXQNWPVCT[UVTGUUVGUVUKPVQECRKVCNCFGSWCE[RNCPPKPINQPI Analysis
VGTOEQTRQTCVGUVTCVGI[CPFQVJGTDWUKPGUUCEVKXKVKGU
ACTIVITY METRICS
ACTIVITY METRIC CATEGORY 70+61(/'#574' CODE PAGE NO
0WODGTCPF
XCNWGQHEJGEMKPICPFUCXKPIU Quantitative 0WODGT4GRQTVKPIEWTTGPE[ (0%$# 50
CEEQWPVUD[UGIOGPV
CRGTUQPCNCPF
DUOCNN
business
0WODGTCPF
XCNWGQHNQCPUD[UGIOGPV
C Quantitative 0WODGT4GRQTVKPIEWTTGPE[ (0%$$ 432
RGTUQPCN
DUOCNNDWUKPGUUCPF
EEQTRQTCVG

GLOSSARY OF FINANCIAL/BANKING TERMS
# AVERAGE WEIGHTED DEPOSIT RATE FGVGTOKPGVJGDWUKPGUUOQFGNKVKUPGEGUUCT[

(AWDR) to understand the objectives of each business
#%%'26#0%'5 model. An entity would need to consider all
#9&4KUECNEWNCVGFD[VJG%GPVTCN$CPM
6JGUKIPCVWTGQPC$KNNQH'ZEJCPIGKPFKECVGU TGNGXCPVKPHQTOCVKQPKPENWFKPIHQTGZCORNG
OQPVJN[DCUGFQPVJGYGKIJVGFCXGTCIGQH
that the person on whom it is drawn accepts how business performance is reported to the
CNNQWVUVCPFKPI+PVGTGUVDGCTKPIFGRQUKVUQH
VJGEQPFKVKQPUQHVJG$KNN+PQVJGTYQTFUC$KNN GPVKV[oUMG[OCPCIGOGPVRGTUQPPGNCPFJQY
EQOOGTEKCNDCPMUCPFVJGEQTTGURQPFKPI
QH'ZEJCPIGVJCVJCUDGGPCEEGRVGF OCPCIGTUQHVJGDWUKPGUUCTGEQORGPUCVGF
Interest rates.
#%%1706+0)21.+%+'5 $75+0'55%106+07+6;2.#0
#8'4#)'9'+)*6'&24+/'.'0&+0)
6JGURGEKƂERTKPEKRNGUDCUGUEQPXGPVKQPU A document that consist of the critical
4#6'
#92.4
rules and practices adopted by an entity in KPHQTOCVKQPCPQTICPK\CVKQPPGGFUVQEQPVKPWG
#92.4KUECNEWNCVGFD[VJG%GPVTCN$CPM
RTGRCTKPICPFRTGUGPVKPIƂPCPEKCNUVCVGOGPVU QRGTCVKPIFWTKPICPWPRNCPPGFGXGPV6JG
YGGMN[DCUGFQPEQOOGTEKCNDCPMUoNGPFKPI
$%2UJQWNFUVCVGVJGGUUGPVKCNHWPEVKQPUQHVJG
TCVGUQHHGTGFVQVJGKTRTKOGEWUVQOGTUFWTKPI
DWUKPGUUKFGPVKH[YJKEJU[UVGOUCPFRTQEGUUGU
#%%47#.$#5+5 VJGYGGM
OWUVDGUWUVCKPGFCPFFGVCKNJQYVQOCKPVCKP
4GEQIPKUKPIVJGGHHGEVUQHVTCPUCEVKQPU VJGO+VUJQWNFVCMGKPVQCEEQWPVCP[RQUUKDNG
and other events when they occur without
B business disruption.
YCKVKPIHQTTGEGKRVQTRC[OGPVQHECUJQTECUJ
GSWKXCNGPV $#5'.+++
%
6JG$CUGNEQOOKVVGGQPDCPMKPI5WRGTXKUKQP
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RTGXKQWUTGRQTVKPIFCVG(QTGKIPGZEJCPIG have not yet been reported to the insurer or
TCVGEQOOQFKV[RTKEGUGVE#J[RQVJGVKECN
KPEQOGCNUQCTKUGUHTQOVTCFKPIKPHQTGKIP
combination of the derivative and its UGNHKPUWTGT
currencies.
WPFGTN[KPIVJCVGNKOKPCVGUTKUM
+0&+8+&7#..;5+)0+(+%#06.1#05
(149#4&':%*#0)'%1064#%6
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#ITGGOGPVDGVYGGPVYQRCTVKGUVQGZEJCPIG FGEKFGFD[VJG$CPMoUOCPCIGOGPVYJKEJ
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one currency for another at a future date at a UJQWNFDGCUUGUUGFHQTQDLGEVKXGGXKFGPEG
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that an entity has the positive intention and OGCUWTGOGPVCPFTGEQIPKVKQPQHKORCKTOGPV
ability to hold to maturity. on an individual basis.
(149#4&.11-+0)+0(14/#6+10
Incorporation of macroeconomic scenarios *+)*37#.+6;.+37+&#55'65
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into the impairment calculations. +/2#+4/'062418+5+105
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Impairment is measured individually for
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The GRI is an international independent
individually.
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+
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understand and communicate their impacts on +/2#+4'&.1#05 +44'81%#$.'%1//+6/'06
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and corruption. GRI promotes sustainability due to be contractually funded in the future.
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expects to collect them later than they are
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sustainable development.
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physical substance held for use in the
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rental to others or for administrative purposes.

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WPFGTURGEKƂEVGTOUCPFEQPFKVKQPU5WEJ of the loan to the borrower.
+06'4'56524'#& WPFGTVCMKPIUCTGGUVCDNKUJGFHQTVJGRWTRQUG
This represents the difference between the QHHCEKNKVCVKPIKPVGTPCVKQPCNVTCFG .155)+8'0&'(#7.6
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interest rate paid on funds.
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#NGXGTCIGTCVKQ+UCP[QPGQHUGXGTCNƂPCPEKCN default.
+0574#0%'4+5- OGCUWTGOGPVUVJCVNQQMCVJQYOWEJECRKVCN
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the holder of a contract to the issuer.
/
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QDNKICVKQPU /#4-'6%#2+6#.+5#6+10
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sale.
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#TCVKQUJQYKPIVJGPWODGTQHVKOGUKPVGTGUV The expected credit losses that result from all spreads and other asset prices.
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and tax. QHCƂPCPEKCNKPUVTWOGPV /#6'4+#.+6;
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Assets that are held in cash or in a form that YJKEJEQWNFKPƃWGPEGVJGFGEKUKQPUQHWUGTUQH
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4GHGTUVQJKIJN[NKSWKFCUUGVUJGNFD[$CPMU assets such as loans and securities and what it
economic activity that is subject to joint
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control.
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assets. A parent is an entity that has one or more RTKEGQPCURGEKƂGFHWVWTGFCVG
subsidiaries.
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liabilities of a life insurer. EQWPVGTRCTV[JCUHCKNGFVQOCMGCRC[OGPV CUUGVUWUGFCNQPIYKVJ41'CUCOGCUWTG
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performance comparison.
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or indirectly to a parent.
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trade transactions.
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an asset over the life of a lease.
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and commitments. the buyer to complete payment and for the COQPICNNV[RGUQHCUUGVU6JGTKUMKPJGTGPV
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when contractual payments are more than 30 Total capital is the sum of Tier I capital and
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behalf. 7
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statements of transactions and events should
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OUR BRANCH & SMART SELF-SERVICE MACHINE (SSM) NETWORK
Branches : 255
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ATMs : 314 Atchchuveli

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Manipay
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NOTICE OF MEETING
1. NOTICE OF MEETING AND AGENDA

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ORDINARY RESOLUTION- DECLARATION OF DIVIDEND AND APPROVAL OF ITS METHOD OF SATISFACTION:
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# (QTXQVKPIUJCTGU
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G 6*#6
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PGYQTFKPCT[XQVKPIUJCTGUCPFQTFKPCT[PQPXQVKPIUJCTGUQHVJG$CPM

SPECIAL RESOLUTION – APPROVAL OF THE HOLDERS OF VOTING SHARES UNDER SECTION 99 OF THE COMPANIES ACT NO. 7
OF 2007, FOR THE ISSUE OF SHARES BY WAY OF A SCRIP DIVIDEND
+6+5*'4'$;4'51.8'&6*#6VJGKUUWGD[VJG$CPMQH
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KKK 6QTGGNGEV&T6CNRCYKNC-CPMCPCOIG&QP#TWPC2TCUCF5COCTCUKPIJGCUC0QP'ZGEWVKXG&KTGEVQTQHVJG$CPMKPVGTOUQH#TVKENGQHVJG
#TVKENGUQH#UUQEKCVKQPQHVJG$CPM
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C 6QCRRQKPV/GUUTU-2/)5TK.CPMC
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$[QTFGTQHVJG$QCTFQH*CVVQP0CVKQPCN$CPM2.%
Shiromi Halloluwa (Ms)

Head of Legal /Board Secretary
%QNQODQ5TK.CPMC
17th February 2023
NOTICE OF MEETING
NOTES:
#OGODGTGPVKVNGFVQCVVGPFQTCVVGPFCPFXQVGCVVJGOGGVKPIKUGPVKVNGFVQCRRQKPVCRTQZ[VQCVVGPFQTCVVGPFCPFXQVGCUVJGECUGOC[DGKP
his stead.
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6JGEQORNGVGF(QTOQH2TQZ[UJQWNFDGGOCKNGFVQKPHQ"JPDNMQTFGRQUKVGFYKVJVJG$QCTF5GETGVCT[CVVJG4GIKUVGTGF1HƂEGQHVJG%QORCP[CV
0Q6$,C[CJ/CYCVJC%QNQODQ
CVp*0$6QYGTUq.GXGNPQVNGUUVJCPJQWTUDGHQTGVJGVKOGCRRQKPVGFHQTJQNFKPIVJGOGGVKPI
SUMMARY OF ARTICLE 22 OF THE ARTICLES OF ASSOCIATION OF HATTON NATIONAL BANK PLC ON PROCEDURE ON VOTING
AND HOW A POLL IS TO BE TAKEN
8QVKPICVCOGGVKPIQHUJCTGJQNFGTUUJCNNWPNGUUCRQNNKUFGOCPFGFDGD[CUJQYQHJCPFUQTXQVKPID[XQKEGCUOC[DGFGVGTOKPGFD[VJG
Chairman.
5WDLGEVVQCP[TKIJVUQTTGUVTKEVKQPUHQTVJGVKOGDGKPICVVCEJGFVQCP[ENCUUQTENCUUGUQHUJCTGUQPCUJQYQHJCPFUQTXQVKPID[XQKEGCUCHQTGUCKF
GXGT[OGODGTYJQKURTGUGPVCVVJGOGGVKPIUJCNNJCXGQPG
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is demanded.
#VCOGGVKPIQHUJCTGJQNFGTUCRQNNOC[DGFGOCPFGFQPCRCTVKEWNCTSWGUVKQPCURTQXKFGFHQTKPVJG%QORCPKGU#EV0QQHD[
VJG%JCKTOCP
PQVNGUUVJCPƂXG
UJCTGJQNFGTUJCXKPIVJGTKIJVVQXQVGCVVJGOGGVKPIQT
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XQVGCVVJGOGGVKPI
#RQNNOC[DGFGOCPFGFGKVJGTDGHQTGQTCHVGTVJGXQVGKUVCMGPQPCTGUQNWVKQP#FGOCPFHQTCRQNNOC[DGYKVJFTCYPCP[VKOGDGHQTGVJGRQNNKU
VCMGP
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vote.
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CPGPVT[OCFGVQVJCVGHHGEVKPVJGOKPWVGDQQMUJCNNDGEQPENWUKXGGXKFGPEGQHVJGHCEVYKVJQWVRTQQHQHVJGPWODGTQTRTQRQTVKQPQHVJGXQVGU
TGEQTFGFHQTQTCICKPUVUWEJCTGUQNWVKQP

FORM OF PROXY (VOTING)
+9G...............................................................................................................................................................................
.......................................................................................... of ...........................................................................................................…….............................................
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...............................................................................................................................................................................................................................................................
of ……………………………………….................................................................................................................................................................................................
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/WFK[CPUGNCIG/CFWTC&WOKPFC4CVPC[CMGQTHCKNKPIJKO/WVWVCPVTKIG2CTCMTCOC&GXCMC%QQTC[QTHCKNKPIJKO&KNUJCP2GVGT0KTQUJ4QFTKIQ
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-CPMCPCOIG&QP#TWPC2TCUCF5COCTCUKPIJGCUO[QWTRTQZ[VQCVVGPFXQVGCPFURGCMQPO[QWTDGJCNHCPFVQTGRTGUGPVOGWUCVVJG(KHV[
(QWTVJ
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%QNQODQQPVJG6JKTVKGVJ
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+YGVJGWPFGTUKIPGFJGTGD[CWVJQTK\GO[QWTRTQZ[VQXQVGQPO[QWTDGJCNHKPCEEQTFCPEGYKVJVJGRTGHGTGPEGKPFKECVGFDGNQY

K 6QFGENCTGVJGTGEQOOGPFGFFKXKFGPFQH4URGTUJCTGKPVJGHQTOQHCUETKRFKXKFGPFCUVJGƂPCNFKXKFGPFHQTVJGƂPCPEKCN In favour
year ended 31st December 2022 and #ICKPUV

C VQCFQRV1TFKPCT[4GUQNWVKQP&GENCTCVKQPQH&KXKFGPFCPFCRRTQXCNQHKVUOGVJQFQHUCVKUHCEVKQP In favour
#ICKPUV

D VQCFQRV5RGEKCN4GUQNWVKQPs#RRTQXCNQHVJGJQNFGTUQHXQVKPIUJCTGUWPFGTUGEVKQPQHVJG%QORCPKGU#EV0QQH In favour
HQTVJGKUUWGQHUJCTGUD[YC[QHCUETKRFKXKFGPF #ICKPUV

KK 6QTGGNGEV&T6CNRCYKNC-CPMCPCOIG&QP#TWPC2TCUCF5COCTCUKPIJG In favour
#ICKPUV

KKK 6QCRRQKPV/GUUTU-2/)5TK.CPMC
%JCTVGTGF#EEQWPVCPVUCUVJG$CPMoU#WFKVQTUHQTVJGGPUWKPI[GCTCPFCWVJQTK\GVJG In favour
&KTGEVQTUVQƂZVJGKTTGOWPGTCVKQP #ICKPUV

KX 6QCWVJQTK\GVJG&KTGEVQTUVQFGVGTOKPGRC[OGPVUHQT(;HQTEJCTKVCDNGCPFQVJGTRWTRQUGU In favour
#ICKPUV
* Delete inappropriate words ** Mark your preference with “3” or “2“
5KIPGFVJKU FC[
5KIPCVWTGU
..........................................................................................................................
FORM OF PROXY (VOTING)
*i>Ãi«ÀÛìÌivÜ}ìÌ>Ã\
5JCTGJQNFGToU0+%0Q%QORCP[4GIKUVTCVKQP0Q
(QNKQ0Q0WODGTQH5JCTGUJGNF
2TQZ[JQNFGToU0+%0Q
KHPQVC&KTGEVQT
Instructions to complete proxy

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dated.
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FORM OF PROXY [NON-VOTING]
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company or corporate body in accordance with the Articles of Association or the Constitution of that company or corporate body.
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INVESTOR FEEDBACK FORM
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Name
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...................................................................................................................................................................................................
...................................................................................................................................................................................................
...................................................................................................................................................................................................
Contact Numbers

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Country Code Area Code Number

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Country Code Area Code Number
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...................................................................................................................................................................................................
...................................................................................................................................................................................................
Name of Company
...................................................................................................................................................................................................

+H#RRNKECDNG
...................................................................................................................................................................................................
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...................................................................................................................................................................................................

+H#RRNKECDNG
...................................................................................................................................................................................................
Company Address
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+H#RRNKECDNG
...................................................................................................................................................................................................
...................................................................................................................................................................................................
Queries/Comments
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Yes No
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9QWNF[QWNKMGVQTGEGKXGCP[KPHQTOCVKQPQPQWTRTQFWEVUUGTXKEGU!
CORPORATE INFORMATION
GENERAL BOARD OF DIRECTORS AND COMMITTEES
NAME OF COMPANY CREDIT RATINGS BOARD OF DIRECTORS

Hatton National Bank PLC The Bank has been assigned a national long (as at 17th February 2023)
term rating of A(lka) /RWN by Fitch Ratings Mrs. Aruni Goonetilleke (Chairperson)
LEGAL FORM Lanka Limited Mr. Jonathan Alles (Managing Director / CEO)
Mr. Amal Cabraal
A public limited company incorporated
JOINT VENTURE COMPANIES Mr. Madu Ratnayake
on 5th March 1970 under the Laws of the
Mr. Devaka Cooray
Republic of Sri Lanka. The Company was Acuity Partners (Pvt) Ltd
re-registered under the Companies Act Mr. Dilshan Rodrigo (Executive Director / COO)
(Financial Services) Mr. Osman Chandrawansa
No 7 of 2007 on 27th September 2007. It
Voting rights - 50% Mr. Rimoe Saldin
is a Licensed Commercial Bank under the
Banking Act No 30 of 1988 (as amended). Mr. Nihal Jayawardene PC
SUBSIDIARY COMPANIES Mr. Rasitha Gunawardana
Mr. Kithsiri Gunawardena
COMPANY REGISTRATION NUMBER HNB Assurance PLC
Dr. Prasad Samarasinghe
PQ 82 (Previous PBS 613) (Insurance Services) (appointed w.e.f 26.10. 2022)
Voting rights - 60%
BOARD SECRETARY
ACCOUNTING YEAR END
Sithma Development (Pvt) Ltd Ms. Shiromi Halloluwa
31st December 2022
(Property Development) Attorney-at-Law
Voting rights - 100% STATUTORY BOARD SUB-COMMITTEES
STOCK EXCHANGE LISTING
(as at 31st December 2022)
The ordinary shares and senior and HNB Finance PLC
subordinated debentures of the Bank AUDIT COMMITTEE
are listed on the Colombo Stock Exchange (Financial Services)
Mr. Devaka Cooray (Chairman)
in Sri Lanka. Voting rights - 51%
Mr. Osman Chandrawansa
Mr. Kithsiri Gunawardena
REGISTERED OFFICE AUDITORS Mr Rasitha Gunawardana
“HNB Towers” KPMG Sri Lanka
Chartered Accountants NOMINATION COMMITTEE
No. 479, T B Jayah Mawatha,
32A, Sir Mohamed Macan Markar Mawatha, Mr. Devaka Cooray (Chairman)
Colombo 10,
Sri Lanka. Colombo 03, Mr. Madu Ratnayake
Sri Lanka. Mrs. Aruni Goonetilleke
HEAD OFFICE HR & REMUNERATION COMMITTEE

INVESTOR INFORMATION
“HNB Towers”, Mr. Madu Ratnayake (Chairman)
No. 479, T B Jayah Mawatha, Institutional Investors, Stockbrokers Mr Amal Cabraal
Colombo 10, CPF5GEWTKV[#PCN[UVUTGSWKTKPIƂPCPEKCN Mrs. Aruni Goonetilleke
Sri Lanka. information should contact the Chief Mr Kithsiri Gunawardena
(KPCPEKCN1HƂEGT
Cable Address : HATNABANK BOARD INTEGRATED
Telephone Nos : +94 11 266 4664 “HNB Towers”
RISK MANAGEMENT COMMITTEE
: +94 11 246 2462 Level 16, No. 479,
T B Jayah Mawatha, Mr. Rimoe Saldin (Chairman)
: +94 11 476 4764
Colombo 10, Mr. Jonathan Alles (Managing Director / CEO)
Fax No : +94 11 266 2832
Sri Lanka. Mr. Madu Ratnayake
Swift : Bic Code - HBLILKLX
Dr. Prasad Samarasinghe
e-mail : hnbconnect@hnb.lk
Web : www.hnb.net Telephone : +94 11 266 1178 Mr Rasitha Gunawardana
Facebook : HNBPLC Fax : +94 11 266 2815 Mr. Ruwan Manatunga
Instagram : hnbsrilanka e-mail : investor.relations@hnb.lk s%JKGH4KUM1HƂEGT&)/
4KUM
Twitter : @hnbplc Mr. Neil Rasiah – AGM (Compliance)
Invitee
Mr. Devaka Cooray - Only on need basis
Designed & produced by
Digital Plates & Printing by Softwave Printing & Packaging (Pvt) Ltd
Photography by Wildlight (Pvt) Ltd
www.hnb.net
H AT T O N N AT I O N A L B A N K P L C
“HNB Towers” No 479, T B Jayah Mawatha (Darley Road),
P O Box 837, Colombo 10, Sri Lanka
Telephone Nos : +94 11 266 4664, +94 11 476 4764
Fax No : +94 11 266 2832, e-mail : hnbconnect@hnb.lk.

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H AT T O N

Ours is the promise of progressive growth both here

Hatton National Bank. We’re

2 | Annual Report 2022

Independent Assurance Report 169 Form of Proxy (Voting) 499

Directors’ Interest in Form of Proxy (Non - Voting) 501

Hatton National Bank PLC | 3

ABOUT THE REPORT

The 10th Integrated Annual Report of

REPORT EVOLUTION REPORTING PRINCIPLES

4 | Annual Report 2022

THE CAPITALS STAKEHOLDERS STRATEGY

Financial Capital Customers Business growth

Human Capital Employees Business Sustainability

Intellectual Capital Business Partners People Development

Digital Capital Government & Regulators Technology Enablement

Social & Relationship Capital Investors

Aruni Goonetilleke Devaka Cooray Jonathan Alles

Colombo, Sri Lanka

Hatton National Bank PLC | 5

ABOUT HNB GROUP

As the holding company Connected

governance and prudent

> Leading with courage

6 | Annual Report 2022

42% HNB Finance PLC

Sithma Developers Ltd

HNB Group in Numbers

8,581 Group 3,069 Group

Rs 1,443 Bn Group Rs 1,108 Bn Group

Rs 1,798 Bn Group Rs 183 Bn Group

Hatton National Bank PLC | 7

CONNECTED & RESILIENT

> Issuance of a Global

> Launch of Acuity Partners

> .CWPEJQH/1/1ƂTUV 2013

8 | Annual Report 2022

> Secured no 1 position in Business

> Acquiring 51% voting

Hatton National Bank PLC | 9

OUR ECONOMIC IMPACT

NURTURING > 4,500

ADDRESSING LEADING THE WAY IN DIGITALISATION

10 | Annual Report 2022

VJGKPETGCUKPIEQPƂFGPEG Leasing Custody Services

Premier Current Account Margin Trading

Custody & Trustee

Value Chain Financing

Hatton National Bank PLC | 11

12 | Annual Report 2022

DIGITAL SOCIAL & RELATIONSHIP

178k 99.7% Rs 29 Mn 130%

1,846 MWh NATURAL

Property, Plant & Equipment Rs 9.4 Bn 22% 13%

Hatton National Bank PLC | 13

14 | Annual Report 2022

Hatton National Bank PLC | 15

16 | Annual Report 2022

As one of the largest player in the MSME

Hatton National Bank PLC | 17

18 | Annual Report 2022

To Our Stakeholders, The benchmark AWDR and AWPLR moved

Hatton National Bank PLC | 19

> .CWPEJQH/1/1ƂTUV 2013

wÀÃÌ>vvÓäÓÓ°7i government announced the suspension of all

GOSL Debt 5KPEG+/(JCUENCUUKƂGF5TK.CPMCoUFGDVCUWPUWUVCKPCDNG

More Information $WUKPGUUNKPGTGXKGYUQPRCIGUVQ Human Capital Report on page 56

4.4, 8.4, 8.5,8.6

16.5, 16.6,16.7

2-22, 2-25

1.5, 2.4, 1,2,7