Nations Trust Bank records resilient performance

Nations Trust Bank closed the 6 months period ending June 30 with a post-tax profit of Rs.1,875 million and a pre-tax profit of Rs.3,882 million underpinned by good growth in business volumes and improved operating margins.

Despite increased impairment charges slowing the bottom line growth, the bank recorded a resilient performance in the backdrop of industry witnessing tightening of market liquidity, moderating credit growth and increased non-performing loans during the first half of the year, the bank said in a media release.

Net interest income increased by 35 per cent mainly attributable to growth in volumes with a marginal improvement in NIMs. Interest income recorded a faster growth of 26 per cent over interest expense growth of 20 per cent due to the higher drop in cost of funds over the previous period.

Impairment charges for the current year increased due to cash flow stress witnessed in selective portfolios which is also reflected in the increase in the NPL ratio to 3.06 per cent from 2.29 per cent reported in December 2017, mirroring industry trends. Industry NPLs stood at 2.50 per cent in December 2017 increasing to 3.30 per cent by end May 2018.

Expenses recorded a growth of 20 per cent which is partly due to the front loading of certain expenses particularly related to branding, marketing activities and investments made on up-skilling of knowledge, employee engagement and culture building. Investments made in technology and digital platforms during the second half of 2017 also had a direct bearing in expenses growth in the current year, the release said.

Loans and advances recorded a growth of 12 per cent primarily driven by corporate portfolio lending. Deposits recorded a growth of 16 per cent while CASA grew by 15 per cent. CASA mix was maintained at 28 per cent.

Commenting on the results and achievements, Renuka Fernando, CEO/Executive Director stated, “It has indeed been a resilient performance across the enterprise as we were able to balance business growth amidst fast changing market dynamics whilst pursuing strategies we embarked at the beginning of the year for future business transformation.”