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| Sunday, 22 August 2004 |
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| News Business Features Editorial
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Nations Trust Bank keeps up steady progress Nations Trust Bank continued the steady progress made in the first quarter and recorded a Group Profit after Tax of Rs 31.8m for the six months ended June 2004. Operating profit was Rs 71.4m when compared to Rs 160.6m recorded during the same period last year. The profits recorded by the Bank in 2003 were boosted by capital gains. Excluding these gains and other oneoff items, the net income increased by nearly 40% , and the operating profit by 11 %.The extension of the VAT on profits to the bank's subsidiary, the increase in the VAT rate to 15% as well as other amendments to tax regulations, in particular those relating to brought forward losses, increased the Bank's tax liability significantly. While costs increased by 34 %, the bulk of the increase was due to credit card operations, which commenced in August 2003. There was also the additional costs of running the four new branches opened this year. For the six months, Customer Deposits increased from Rs 6.6 billion to Rs 7.9Billion (20%) and Loans and Advances From Rs6.5 billion to Rs7.3 Billion (12%). This growth could be considered commendable in the light of the uncertain environment and the significant changes in the operating model which the Bank has been implementing as part of its strategy review. The latter half of the quarter saw the momentum picking up, which augurs well for the rest of the year. The performance of the American Express Cards business continued to exceed expectations. The quality of the Advances portfolio remains very satisfactory. This is also reflected in the provisioning requirements for the quarter. Non Performing Loan Ratio stood at a praiseworthy 5.6 % at the end of the half-year, well below the average for the industry in Sri Lanka. The Branch expansion programme was on schedule with the Kotahena branch being opened in June, bringing the total of branches opened this year to four. Three off- site ATM's were opened during the quarter at the Lanka IOC multi-service stations at Elvitigala Mawatha, Maradana and Dematagoda. At the end of the half year, the number of branches was 24, while the number of off-site ATM's was 5. With a view to improving service levels, the Flexcube core banking system is being upgraded in the next few months, to the latest version. This will enhance the existing delivery channels including internet banking , personalized ATM transactions , as well as tele and SMS banking. Zulfiqar Zavahir, the Chief Executive Officer stated, "We are pleased with the steady progress in the core activities of the Bank in the face of the uncertainty which prevailed in the second quarter. The performance of the bank especially in the latter part of the quarter, gives us much comfort in that the hard work in effecting the significant changes to implement our revised strategy, is now beginning to pay dividends. We will continue to remain focused and are confident that the Bank will maintain the momentum of growth and profitability in the next six months." |
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