NTB posts record financial performance, further strengthening capital adequacy and stability

Monday, 27 February 2023 01:55 - - {{hitsCtrl.values.hits}}

Chairman Gihan Cooray

Director/CEO Hemantha Gunetilleke

Operating Income of Rs. 38.8 b, YoY growth of 67%
Profit Before Tax of Rs. 13.4 b, YoY growth of 29%
Profit After Tax of Rs. 7.2 b, YoY growth of 8%
Strong Capital Adequacy with Tier I of 14.8% and Total CAR of 16.9%

Nations Trust Bank PLC (NTB) said yesterday it continued the steady performance to close the financial year ending December 2022 with an Operating Income of Rs. 38.8 billion, reflecting a solid growth of 67% year-on-year (YoY).

Carefully navigating the challenging socio-economic environment, the bank posted a Profit Before Tax of Rs. 13.4 billion, a notable growth of 29% and Profit After Tax of Rs. 7.2 billion, an increase of 8%, YoY, thereby reporting a record year for the bank.

Director and CEO Hemantha Gunetilleke said: “We have delivered a strong full year result, building on the trend demonstrated through 2022 with a PBT of Rs. 13.4 billion and a PAT of Rs. 7.2 billion. These results underpin the fundamental strengths of the bank’s Liquidity, Capital Adequacy and Risk Management Framework. These strengths along with a focus on digital innovation, teamwork and adherence to prudent banking practices, ensured that we were able to consistently provide banking service excellence to our customers despite the challenging external environment.”

Interest rate movement and margin expansion during the year resulted in strong Revenue growth of 67%. Operating Expenses were carefully managed throughout the year resulting in Total Operating Expenses increasing by only 27% YoY despite the high inflationary environment.

Gains in Operating Income were negated to some extent by the sharp rise in Impairments. The Bank’s impairment provisions relating to loans, advances and sovereign bonds, rose 270% YoY. Provisions were impacted by negative flows from moratorium loans and the overall deterioration in credit quality across most loan portfolios due to the weak economic environment. The bank’s exposure to foreign currency denominated security instruments issued by the Government of Sri Lanka were relatively low at 2.6% of the total assets. Appropriate impairment provisions were made by the bank on these instruments in line with the industry, considering current economic conditions.

The bank’s overall tax expense grew by 68% during the reporting period due to higher profits, increased corporate tax rates, VAT on Financial Services and the effect of tax reversals recorded in 2021.

“We are confident that the bank’s strong capital base and healthy liquidity buffers have positioned it well to support our customers to build back from the economic downturn. The bank is poised to build for the future through further investments in world-class digital banking infrastructure that will help fulfil the future banking needs of our customers,” added Gunetilleke.