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| Sunday, 14 November 2004 |
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| News Business Features Editorial
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NTB profits soar Nations Trust Bank's profitability picked up in the third quarter recording a Group Profit after Tax of Rs. 60.2 mn for the nine months ended September 2004, almost double the Group Profit after Tax recorded in June of Rs. 31.8 mn. Operating profit was Rs. 123 mn compared to Rs. 301 mn during the same period last year. The profits made by the bank last year were boosted by capital gains. Excluding these gains and other one-off items, net income increased by 34%. Higher taxation that consisted of VAT on profits of the bank's subsidiary, the increase in the VAT rate to 15%, as well as other amendments to the tax regulations, in particular, those relating to brought forward tax losses, depressed profits significantly. Further, the recently passed tax legislation could also impact on the industry as a whole, if the relief requested by the Banks' Association is not granted. This could well result in price revisions, to lessen the effect on bank's profitability. Customer deposits increased considerably from Rs. 6.6 Bn in December 2003 to Rs. 9.1 Bn at the end of the third quarter, an increase of 38%. Loans and advances also grew from Rs. 6.5 Bn to Rs. 8.2 Bn, an increase of 26% during the same period. The American Express Cards business returned an outstanding performance that was well ahead of expectations. The prudent risk management policies of the bank were evidenced by the improved quality of the advances portfolio with the non-performing loans ratio at a very healthy 5% which is well below the average for the industry in Sri Lanka. |
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