The group reported earnings of 2.74 rupees per share for the quarter, in interim accounts filed with the Colombo Stock Exchange.
At stand alone bank level return on equity fell sharply to 8.01 percent from 14.26 percent.
Interest income fell in absolute terms 4 percent to 13.8 billion rupees in the March 2014 quarter and interest expense fell at a slower 2 percent to 7.5 billion rupees, but net interest income fell at a faster 7 percent to 5.7 billion rupees.
The interest margin fell to 4.34 percent from 5.09 percent and return on assets fell from 2.09 percent to 1.13 percent.
HNB's group loan book rose 3 percent to 361 billion rupees and financial investments - loans receivable rose 17 percent to 74.8 billion rupees.