HNB Finance has spent the past few years strategically reshaping its business, strengthening its portfolio through a greater focus on secured lending and sustainable growth. This transformation has contributed to the company’s strongest financial year to date, with profit after tax growing by 120%, reflecting the success of a disciplined strategy centered on stability, resilience, and long-term value creation.
This conversation with Chaminda Prabhath, Managing Director and Chief Executive at HNB Finance, looks behind those numbers at the broader story of transformation, spanning technology, people, and community. The company has been investing in a new core banking platform and digital lending tools, while holding onto the branch network that have long connected it to customers in rural and underserved areas. It has also leveraged the strength, trust, and credibility of its parent company, Hatton National Bank PLC, while continuing to establish its own distinct identity in the market.
Looking back, what prompted the shift to a secured lending portfolio, and how has it reshaped the identity of the brand?
We have been active in a number of customer segments over the years, including microfinance, which played an important role in expanding access to financial services. However, the industry has evolved considerably, with significant regulatory developments being introduced and further regulatory enhancements continuing to shape the sector.
Drawing on our experience across these segments, we carefully assessed the opportunities, challenges, and long-term sustainability of our portfolio. These insights helped us identify areas where we could further strengthen our business model and leverage our core strengths more effectively. As a result, we strategically restructured our portfolio towards a stronger secured lending base, while continuing to support a diverse customer segment.
Supported by our extensive branch network, experienced workforce, strong customer relationships, and robust infrastructure, this transition has positioned HNB Finance for more sustainable and resilient growth.
Beyond the numbers, what do you believe has been the biggest driver behind your turnaround in recent years?
A key factor behind the turnaround was our ability to leverage the strong foundation already in place within the organisation. We had an extensive branch network, established operational infrastructure, and, most importantly, a highly experienced workforce with deep customer and market knowledge. Rather than building new capabilities from the ground up, we upskilled and redeployed our existing teams to support the growth of our secured lending portfolio. This enabled us to accelerate the turnaround while preserving valuable institutional knowledge, customer relationships, and service excellence. By building on our existing strengths, we were able to execute our strategy efficiently and position the business for sustainable long-term growth.
Technology has been a major part of HNB Finance’s transformation, from a new core banking platform to digital loan origination and workflow automation. How have these investments changed the way customers experience the brand, rather than simply making the business more efficient?
Frankly, this work is still in progress. We are currently developing a fully automated, AI-supported core banking system, which will go live very soon. While our existing systems have served us well, there are areas where workflows and processes can be further enhanced, and this new platform has been designed to address those opportunities. It will support a more seamless and user-friendly experience for both customers and internal stakeholders.
Our primary focus is to create a simpler, more seamless, and customer-centric business model while enhancing the experience of both our customers and internal stakeholders. Technology plays a critical role in this journey by improving accessibility, streamlining processes, and enabling greater agility across the organisation. While the benefits will continue to materialise over time, these investments are laying the foundation for a more efficient, responsive, and future-ready HNB Finance.
Mobile banking and digital lending continue to grow, yet HNB Finance has maintained a strong presence within communities through its branch network. How do you strike the right balance between digital convenience and the personal relationships that have always defined the brand?
We already have the infrastructure in place for that balance, but customer perception remains a challenge. There is still a perception that we operate differently to banks, as we cater to a different segment of the country, and that perception is difficult to change. This is true across the country as a whole, and as a single company, we cannot change it alone. We are doing our best, but it would help to have more support from the government on this front, and I know a number of initiatives are already underway there.
While we have the necessary digital infrastructure and channels in place, customer adoption is a journey that takes time. Many customers still value the personal interaction and reassurance that comes from visiting a branch. Our focus is therefore on gradually building awareness, confidence, and trust in digital channels while continuing to offer the convenience and human touch our customers appreciate. As customer behaviour evolves, adoption will naturally increase. The foundation is already in place; the next phase is guiding customers through that journey and helping them become comfortable with new ways of engaging with us.
How has your relationship with HNB Group helped shape your journey while allowing the company to carve out a distinct place in the market?
Being part of the HNB Group gives us significant brand strength, which we draw on for business development. Customers place confidence in us because of the strength and reputation of the HNB brand, and although we cater to a different customer segment from the bank, we benefit from that shared identity and the strong synergies within the Group.
It also supports our credit rating, while strengthening our ability to grow the business. The brand’s strong presence in rural areas also makes it much easier for us to engage with customers and expand our reach at the grassroots level.
As HNB Finance shifted its strategy, how did you bring employees on that journey, and what role has culture played in the company’s evolution?
Culture has played a central role because we have always had a strong culture of serving customers at the grassroots level. We have a very human touch, which is reflected in our value statement and in the way we do business.
That culture was instrumental in helping us transform our people. By investing in our teams and building strong customer relationships, we were able to establish our brand in this segment, strengthen customer confidence, and successfully grow the business.
As HNB Finance moves towards the Rs100 billion asset milestone, how do you ensure that growth is matched by stronger customer trust, better service, and a brand that continues to stay relevant in a changing market?
We are guided by the core values of the company, which include being professional in how we deal with people and responding quickly whenever issues arise, in order to build trust with our customers. This approach has given us a strong foundation, and we intend to continue in the same way going forward by staying true to our core values.
As you look ahead, what do you want the next chapter of the HNB Finance story to be, and what do you hope customers will associate with the brand in the years to come?
The next chapter of the HNB Finance story is about being at the forefront of financial solutions while advancing financial inclusion across Sri Lanka. Building on a strong foundation of trust, accessibility, and customer-centricity, our focus is on creating smarter, more convenient, and more inclusive financial experiences through technology, innovation, and customer insight. This is closely aligned with our brand promise of “Unity Beyond Barriers”, reflecting our commitment to connecting more people and communities with opportunities for financial progress.
At the same time, we want to be recognised as a responsible brand that creates value beyond transactions. This means promoting financial literacy, encouraging responsible financial practices, and helping individuals, entrepreneurs, and communities achieve sustainable progress.
In the years ahead, I hope customers will associate HNB Finance with trust, empowerment, and progress. Trust in our ability to act responsibly and transparently, empowerment through solutions that help customers achieve their aspirations, and progress through our commitment to making financial services more accessible and relevant. Ultimately, we want to be recognised not only as a financial institution, but as a trusted partner in helping people build a better future.