NTB continues to grow

Nations Trust Bank PLC released its annual report 2008 to the Colombo Stock Exchange yesterday. Performance as given in the Audited Financial Statements contained therein is a reflection of the continued strong performance during what was clearly a challenging year for the bank, in its relatively short, but eventful decade long history. Achieving a milestone, the Nations Trust Bank Group has reported a profit before tax of Rs. 1,028,507 Mn. for the year against Rs. 847,394 Mn. reported for 2007, reflecting a 21% growth. Profit after tax grew by 17% to Rs. 593,119 Mn. for the year compared to Rs. 504,818 Mn. reported for the last year.

Gross income

Gross income of the Group grew by 49%, with net interest income growing by 38% and non-funds based income in the form of fees, commissions and foreign exchange income showing a very healthy growth of 34%. Deposits grew by a pleasing 19% from Rs. 28,665 Bn. to Rs. 34,146 Bn, while advances grew by 16% from Rs. 34,500 Bn. to Rs. 39,940 Bn. Deposits and advances growth for the industry were 7.4% and 6% respectively. Total assets grew by 22% from Rs. 55,687 Bn. to Rs. 67,732 Bn.

Being the first year of operations under the new strategic plan 2008-2012, 2008 was an eventful year for the bank.

Market share

Ajit Gunewardene, the Chairman of the Nations Trust Bank in his message in the annual report states that "The new strategic plan envisaged a number of initiatives relating to brand building, delivery channels, products and processes. It also identified the resource requirements of the bank, over the 5-year period in terms of capital, space, human resources etc. In this regard, I am happy to mention that a majority of the initiatives were implemented and resources were secured during the year as planned". Commenting on the performance, he also states that "Even in the backdrop of a slowing down of the Sri Lankan banking industry, your bank managed to grow its business volumes at above the industry growth rates, thus signifying an increase in the market share." Further, while talking about the possible challenges in 2009 and beyond he states, "We also foresee significant opportunities to expand and capture profitable market share in this environment. We believe that we are well poised to grab these opportunities."

While the bank has managed to grow business volumes and income and contain operating expenses, the non-performing assets ratio was affected by the deteriorating risk environment and resulted in an increase in provisioning for bad and doubtful debts. Zulfiqar Zavahir, Director/CEO of Nations Trust Bank PLC in his review in the annual report states "The banking industry was not immune to the effects of the market turmoil and economic slow down experienced during the year. "