NTB records 40% growth

In the interim financials released to the Colombo Stock Exchange on May 5, Nations Trust Bank PLC reported that the Group has achieved an Operating Profit before Income Tax and Value Added Tax of Rs. 404,579 Million for the three months ended March 31, 2009 against Rs. 288,405 Million reported for the comparable period last year, reflecting a 40 percent growth.

Zulfiqar Zavahir

Profit after Taxes grew by 25 percent to Rs. 180,137 Million for the period compared to Rs. 144,208 Million. Corresponding to the growth in total assets of 9 percent and a significant increase in non-fund based income, gross income of the Bank grew by 22 percent. Increased forex volumes and active market participation contributed to a 65 percent growth in foreign exchange income while trading gains on government securities by capitalizing on declining interest rates, credit cards and commissions boosted the other operating income by 55 percent.

'In the wake of a significant slowdown in the local banking industry, according to the Central Bank of Sri Lanka, deposits growth has stabilized to 3.8 percent while loans and advances have decreased by 0.4 percent during the first three months of the year.

'In comparison, we have been able to grow our deposits by 6 percent and loans and advances have also shown a marginal growth in the backdrop of a stringent credit policy being adopted due to unfavourable market conditions" Zulfiqar Zavahir, Director/Chief Executive Officer of Nations Trust Bank explained.

'Our investment in the customer service centres and related delivery channels in the latter part of 2008 in line with our business strategy have contributed to an increase in operating expenses by 32 percent compared to the first quarter of 2008. However, during the first quarter of 2009, the Bank managed to keep the growth in operating expenses at a lower rate than the growth in net-income which was 44 percent, thereby improving the operating efficiency and bringing the Cost Income ratio down from 61 percent to 56 percent compared to the 2008 first quarter. Specific provisions however increased to Rs. 258,587 Million for the period from Rs. 96,116 Million which includes certain prudential provisions made on exposures over and above the provisioning policy of the Bank, which is more stringent than the guidelines of the Central Bank'.

While the Gross NPL ratio deteriorated from 6 percent to 7.6 percent, the increase in the NPL portfolio was relatively lower than the industry, where NPLs increased by 23.4 percent according to figures released by the Central Bank of Sri Lanka.

'In the backdrop of challenging market conditions, our performance has been resilient.

'Continuing to be focused on asset quality, risk management and cost control has paid rich dividends under difficult circumstances.

'Having made the prudential provisions in the first quarter, the Bank is in a strong position to face the rest of the year with greater confidence' , Zavahir added. In July last year, Fitch Ratings Lanka Ltd. reaffirmed the rating assigned to the Bank of A(lka) which denotes a strong credit risk relative to other issuers or issues in the country.

Nations Trust Bank has grown rapidly over the last ten years through a strategy of organic growth and acquisitions.

These included the tie-up with American Express credit cards and the merger with Mercantile Leasing Ltd.

In keeping with the vision of the Bank "Making life simple by being the benchmark of convenience", Nations Trust Bank provides customer convenience through pioneering concepts such as `365 Day Banking', mini branches, Personal Banking Centres, `Bank At Your Doorstep' and extended banking hours which have helped to win over and maintain a strong customer base.