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Evaluating the practices of motivation in hatton national bank

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Taking the initiative in many segments, HNB has embarked on a transformational journey that has enabled exceptional performance. He speaks about the progression of HNB while emphasising that they are here for the long haul. A fact well proven in their 130-year journey. Can you tell us about the Bank's progression? HNB was first established in 1888 in the hills of Hatton to facilitate and support the tea industry. Today the Bank has emerged as one of Sri Lanka's leading private commercial banks.

While we continue to dominate the retail banking sector, HNB has also been recording equally strong performances across the Bank's corporate banking portfolio, which has grown substantially in recent years. Similarly, our project financing and syndication capabilities have also improved significantly, and it is this holistic approach to banking, which has been a source of great strength for HNB.

This approach has been an unparalleled success for HNB, which, has emerged as Sri Lanka's most profitable private commercial banking group by the end of 2016 when we were able to record a group Profit Before Tax PBT of 22.

Based on evaluating the practices of motivation in hatton national bank lessons we learned over the Bank's strong performance in the past three years, we at HNB formulated our Vision 2020 - a comprehensive plan developed through a rigorous process of evaluation and analysis into the fundamental drivers of growth and success for HNB. Leveraging comprehensive market research and client surveys, we asked ourselves how we wanted to grow in the future, what kind of role we wished to play in the Sri Lankan economy and what kind of market segments we should operate in.

And as such, we finalised an aggressive and futuristic strategic plan with challenging targets for HNB. In that regard, we are extremely determined to ensure that the foundations for growth are in place for decades to come. Our strategies are directed not only towards maintaining and preserving our leadership position in the Sri Lankan banking industry.

Instead, we now have our eyes set on the future. Our goal is to serve as a beacon of excellence which others in the banking industry will be able to aspire to and even emulate.

Evaluating the practices of motivation in hatton national bank

In this manner, we hope to infuse the wider industry with technological innovation and best practices as we believe that a stronger overall industry will benefit the entire country and in doing so, open up even more potential avenues for growth, in total alignment with the national socio-economic agenda.

Moving forward, one of our key priorities is to drive further improvements to our Current and Savings Account balances CASA while continuously honing our product and service offering. Over the years HNB has developed a proven track-record of designing and rolling out only the very best banking products in the Sri Lankan market. Similarly, the bank has also developed a strong portfolio, and currently services a client base of over 2.

In that regard, HNB's extensive branch network is another core strength for the Bank. Leveraging our 250 plus branch network, we have moved into every major urban centre to extend the very best banking services to a very diverse range of clientele - from urban clients to dynamic new start-ups and even respected corporate leaders, while also extending much needed financial services into the country's vital rural economy.

Over the years, we have worked evaluating the practices of motivation in hatton national bank support SMEs, entrepreneurs, and different communities through the expansion of the comprehensive microfinance services while also promoting financial inclusivity as well as financial literacy, all with the ultimate goal of empowering this sector to become independent and prosperous. Over the last three years there has been a steady reduction in our non-performing loans and prominent improvements in our recovery management process.

We ended 2016 with a NPA ratio of 1. SMEs are now focused in the regions, corporate banking in Head Office, in addition, we have established a Centre of Excellence that has been able to completely streamline and centralise processing of retail credits from across the island. Such initiatives have drastically reduced the administrative workload on our branches. This strategy in turn has enabled HNB to rapidly bolster the strength of its sales teams, while simultaneously driving unprecedented improvements to efficiency and productivity, and supporting substantial improvements to the bank's overall risk portfolio.

Thus, we continue to make outstanding progress in our journey to further improve asset quality and add value to HNB's stakeholders. In this process, we have also focused on a combined vertical, which looks at bank transformation and client experience. For this purpose we recruited a Client Experience Officer last year to completely transform the client experience at HNB, and drive seamless integration across all channels.

Consequently, whether it be brick and mortar branches, teller counters, ATMs, internet banking, mobile and POS machines, we endeavour to give our loyal customers a consistent, high quality experience that surely does not reduce or vary in quality regardless of how our customers choose to do business with HNB.

It does not really matter whether they are at our branch or at the shop, in the office or even at home, when they access our products and services through any of our channels, they should know that they are actually accessing Hatton National Bank. It has to be a tangible, clear and pleasant experience.

  • Similarly, our project financing and syndication capabilities have also improved significantly, and it is this holistic approach to banking, which has been a source of great strength for HNB;
  • The Bank is looking for sustainability; sustainable profit and balance sheet growth;
  • We have had peaks and troughs, however the banking sector has remained resilient and is also agile today in order to move on and adapt and take on new roles in the economy for different segments;
  • The branches, regions, corporate banking, SME, micro finance, and personal banking, also the sales teams have all rallied together exceptionally well.

By doing so, we are able to deliver our services in a new and refreshing manner that conveys vibrancy and efficiency. This is an aspect of our brand which we will work to continuously refine moving forward. Our next vertical is of course, our digital banking business.

We are currently looking at digitalising the entire Bank in order to ensure that HNB will stand as the most future-ready bank in Sri Lanka. We have high aspirations set to achieve this goal. Over the coming months and years, we will be rolling out many more technology enabled products and services. These services will be further complemented by our mobile app, and our state-of-the-art internet as well as mobile banking products, including pioneering products such as HNB MoMo.

Similarly, we have also invested signif-icantly over the last year in a comprehensive payment and cash management solution, catering to the discerning needs of our many corporate banking clients. Accordingly, HNB has sought to provide them with unparalleled convenience in making payments and receiving collections.

We also offer highly sophisticated supply chain financing and distributor financing for our loyal SME clients, which is another vitally important segment for HNB. Additionally, we are also focused on introducing several new technologies to HNB.

At present we have close to 500 ATMs in our network and we will be working to complement these ATMs with several new cash deposit machines, cash recyclers, kiosks and cheque deposit machines. Over the next year, we expect to add at least another 100 ATMs to our already extensive network.

  • A fact well proven in their 130-year journey;
  • We need to realize that today customers have the same amount of information that we bankers and finance companies have;
  • As a nation, we have had our peaks and troughs, however the banking sector has remained resilient throughout;
  • It is actually easier to support their requirements when you experience their operations at first hand;
  • We need to stay connected using the technology available today, we are all there for each other.

In that context, HNB has also made excellent progress in the launching of new digital branches - the first of which was the showcase digital branch in Colpetty. Similarly, there will be more locations where we would provide a digital branch or a digital zone for customers to use our services conveniently in the coming year. These outlets tend to act as hybrid branches, meaning that they offer a comprehensive and growing range of digital services, in addition to having the manned-counters.

For HNB, it means that we approach digital integration in a holistic manner which covers the entire spectrum of the bank's operations. It is equally important evaluating the practices of motivation in hatton national bank customer service that our processes are continuously improved and streamlined, that documentation is made efficient, automation is introduced through our digitalization efforts. We are also working to leverage the power of data analytics in order to deepen engagement and build stronger customer relationships; these are just a few of the critical areas in our digital journey.

HNB has also been working to introduce many other progressive measures, that are aimed at improving the environmental sustainability of operations. Another important vertical for the Bank is in relation to process excellence, or lean management as it is more popularly known. The very first steps in this journey were taken through the establishment of a total dedicated Change Management Division within the Bank back in 2013. Since then, we have achieved tremendous success in this area over the last four years.

The Bank's cost-to-income ratio has improved by over ten percentage points from a previous level of 53 per cent in 2012 to 42. The improvement stands as a further clear testament to the absolute outstanding work that our teams of employees have been truly engaged in over the last three years across our entire branch network.

I can confidently state that our efforts to really focus on getting our branch operating model right - ensuring that they are of the right size, have challenging yet sustainable performance targets, and that they are allocated the proper expertise and correct resources to drive business - has surely led to tremendous performance gains. Meanwhile, HNB has also been working to introduce many other progressive measures, that are aimed at improving the environmental sustainability of operations.

We have been able to introduce solar power to nearly 70 of our branches. Internal discipline has been strictly maintained in order to drive drastic cuts in the use of paper for printing and we continue to make positive progress in this direction. As a bank, we tend to really try and avoid creating excessive paper documentation. Instead all our approvals and plans are captured through the various systems on our tablets and many other systems that we use. Process excellence is extremely important.

There are multiple projects taking place to improve and streamline our processes, which at this point in time may be long-winded and are less customer friendly. We want to keep improving in those areas because it provides both clarity and convenience to our staff while also resulting in notable improvements to customer service.

Those are the major verticals that will drive the business through the new vision, however we will also rely on other supporting verticals including the new business vertical, the operational risk vertical and the balance sheet optimisation vertical to promote many more improvements to the Bank's growth trajectory. In the last three years we have seen the HNB family really expressing itself. It has been a fabulous team effort and it is inspiring to see our team rallying together in the way that they have.

Today we have many young managers and executives and it is a real pleasure to see that the energy and enthusiasm levels are at an all-time high, thus leading to performance improvements across the board, and these results speak for themselves. Our first and most important corrective measure was to carefully examine all of our processes in order to enforce a truly meaningful improvement to the way that we do business that simultaneously uplifts the bank, our staff, and our clients.

People are the cornerstone of Vision 2020. Everything that HNB will do over the next three to five years revolves around its people. Hence we will also work to ensure that our strategies are accurate with regard to talent acquisition, development, management and retention. That is the way forward for us. The Bank is looking for sustainability; sustainable profit and balance sheet growth.

We are truly focused and we are always in it for the long haul. There is new energy in the Bank and much new thinking.

What can you tell us about this? I first joined HNB in 2002 and served until 2005.

Evaluating the practices of motivation in hatton national bank

As such, I had a very good feel for the organisation. I knew that the organisation had good people, a massive client following and strong brand loyalty that had been built over a century. That period gave me great insight into the many strategic possibilities open to HNB. At the time that I joined we had 28 very senior corporate management members who gave great confidence to the CEO. By the time I took over in 2013, the bank team was quite different and had reduced to about 13; which was less than half of what we had in terms of a corporate management team.

Even today we are probably one of the smallest teams for a large bank of this size.

  1. We need to stay connected using the technology available today, we are all there for each other.
  2. The transformation from operations to sales; the transformation from administration to more client focus; the transformation from long winding processes to more lean as well as efficient processes; and also the change from hierarchies to flatter structures in terms of people have all contributed to the performance of HNB. One is that we have continued to support and align ourselves with nationally significant projects; whether it is building hospitals, roads, bridges, sanitation, water projects and irrigation we have been there doing our share.
  3. My team also supports me fully by not arranging meetings on those days whenever possible. As such, I had a very good feel for the organisation.
  4. A comparative study of financial performance of state and private was 2 or satisfactory, hatton national bank hnb quality and credit-administration practices.
  5. There are multiple projects taking place to improve and streamline our processes, which at this point in time may be long-winded and are less customer friendly. In that regard, we are extremely determined to ensure that the foundations for growth are in place for decades to come.

We knew that we only had ourselves and that we had to make it work, so we didn't over extend ourselves, but instead placed greater emphasis on getting the basics right. There was intense focus, intent and passion to continue and build on all of the positive attributes of the Bank for its customers and staff and we were all very clear in terms of what we wanted to achieve.

Soon after I took over we encountered the gold debacle.

We had a significant pawning portfolio at the time and gradually reducing this portfolio over two years was really quite a painful exercise, but it was something that ultimately worked to further demonstrate HNB's resilience and agility. Such a significant decline could not be replaced with retail banking assets over night.

Fortunately, our corporate banking was able to step in and fill the void left by the gold pawning business, while continuing to sustain the momentum and drive loan growth for the Bank. We have been hitherto focused on opera-tions and were previously quite process heavy and there were many administrative bottle-necks that had to be navigated. Processes were long winded and we knew these delays were slowing down the organisation and demotivating our staff.

This was also reflected in the customer service that was offered at the bank at the time. Therefore, our first and most important corrective measure was to carefully examine all of our processes in order to enforce a truly meaningful improvement to the way that we do business that simultaneously uplifts the bank, our staff, and our clients.

Our strategy of transforming all frontline operations into sales and service outlets while removing all of the clutter and unnecessary processes of the branches and regions back to the head office is proving to be extremely effective.