Upgraded to A(lka): Nations Trust Bank makes excellent progress

Nations Trust Bank has made excellent progress in the first six months, having achieved a Group Operating Profit before Tax of Rs. 279.7 million for the half year ended June 30, 2006.

On a combined entity basis (with the merger of Mercantile Leasing Limited (MLL) on January 1, 2006), Group Operating Profit before Tax showed an increase of 73%. These exceptional results were seen on the back of an all round improvement with strong growth in Deposits and Advances, a pleasing increase in Fees and Commissions and while maintaining good control of Non-Performing loans, Provisions and Operating costs.

Group Profit after Tax was Rs. 132.9 million with the effective tax rate increasing from 41% to 52.5% due to the increased Financial Services VAT of 20% and a higher Income Tax rate of 35% in 2006.

The combination of the good performance and the increase in Capital (resulting from the merger with MLL) has led to the upgrading of the Bank's rating to A(lka) from A-(lka), by Fitch Ratings Sri Lanka. A(lka) National ratings denote a strong credit risk relative to other issues or issues in the same country.

Chief Executive Officer Zulfiqar Zavahir said, "The performance is indeed gratifying, with all the business units contributing strongly and making their presence felt in the market. We have significantly grown our customer numbers and volumes while continuing to be extremely focused on service delivery. We are confident that the momentum will be maintained and look forward to a superior performance in the second half of 2006, as well."