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