NTB PAT tops Rs. 2 b

Nations Trust Bank Group recorded a profit after tax of Rs 2,127 million compared to Rs 1,951 million in the previous year, a moderate earnings growth of 9%.

The Bank continuously reviewed its internal pricing strategies to balance risk and rewards on customer assets whilst the mobilisation effort on deposits continued with emphasis given to acquire low cost deposits.

The faster rate of growth in interest income over the interest expenses resulted in widening NIMs, and an increase in net interest income by 33% for the year.

Non fund based income recorded a decrease of 13% mainly due to foreign exchange losses. The high volatility that prevailed in the SWAP premiums during the year negatively impacted FX income arising from funding SWAPS.

These losses were partly compensated by trading and mark to market gains on the FIS portfolio due to favourable movement in the yield curve. American Express credit card business related fees recorded a substantial growth of over 25% compared to the previous year. Strategic venturing into Master credit card business showed encouraging results for the year with an accelerated card issuance contributing modestly towards the top line non fund based revenue in the first year of launch.

With the slowdown witnessed in external trade, trade finance income fell below previous year level. Much emphasis was placed to enhance export business volumes to mitigate negative impact on trade business due to drop in imports.

Significant investments were made during the year on the execution of lean management concepts and the phased implementation of the core banking project to uplift efficiencies and productivity levels to an unprecedented level over the medium term.

Operating expenses increased by 23% over the preceding year. Nevertheless, cost management strategies adopted across the organisation resulted in maintaining the cost-income ratio below 60% thereby partly mitigating the adverse impact of the higher costs incurred on the strategic initiatives to the bottom line.Commitment to drive the cost-income ratio below 50% in the medium term remains a key management focus as the Bank transformation through efficiencies continue.

Impairment for loans and advances for current year was Rs 451 million compared to Rs 432 million for the previous year.

The amount attributable to pawning was at a manageable level of Rs 165 million due to the relatively small size of the pawning portfolio, which is 2.7% of the loan book. The push for CASA growth gathered momentum during the year through the launch of new products and rejuvenated sales efforts. Total deposits recorded a growth of 11% with CASA contributing to over 50% of the growth. Low cost mix improved substantially and reached 25% by end of the year. Group closed the year with total net advances growing by 12% despite the slump in private sector credit growth which prevailed in the industry throughout the year.