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Sunday, 22 November 2015

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Nations Trust continues steady performance

The Bank closed the nine months ending September 30, 2015 with a post-tax profit of Rs. 1,939 mn, down by 2% over the previous period. The performance for the quarter was negatively impacted by the marked to market losses recorded on the FIS portfolio in contrast to significant gains made in the corresponding period last year.

Nevertheless, core earnings recorded a moderate growth with net interest income and fees growing by 7% while the growth in operating expenses and impairment charges was managed within 5%. Loans and advances posted a growth of 14% with a larger share of the growth recorded in the current quarter mirroring industry trends.

Narrowing NIMs slowed net interest income growth particularly in the current quarter. The Bank strategically pushed for higher loan growth with incremental new business booked at relatively lower margins.

Portfolios such as Corporate and Leasing in particular, felt the pinch of declining yields and heavy competition.

The Bank aggressively pursued strategies to grow CASA to keep borrowing cost low. Low cost deposits recorded a 6% growth with the CASA mix improving to 33% of deposits.

Net fees and commission income grew by 17% for the period under review primarily driven by credit card fee based income and transactional fees. Concerted efforts to penetrate trade hubs paid off with trade related fee income posting a growth of 16%.

Net trading income recorded a significant drop owing to marked to market losses recorded on the FIS portfolio as a result of unfavorable movements in the yields of the underlying Government Securities.

The loss recorded for the current period amounted to Rs.233 mn compared to a gain of Rs.169 mn for the corresponding period last year.

Foreign exchange income recorded an impressive growth of 20% with enhanced customer volumes and favourable rate movements benefiting proprietary trading.

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