Nations Trust Bank ups Group post-tax profit by 68% to Rs. 848.4 m

Nations Trust Bank has reported strong growth across all its business lines during the period of 9 months ending 30 September 2010. Also, improving credit quality as experienced across the industry, resulted in lower provisioning and improvement in debt recovery, which further boosted profits for the period under review.

Improved overall performance has resulted in the Group post-tax profit for the period of 9 months ending 30th September 2010 growing by 68% to Rs. 848.4 million against Rs. 504.8 million over the corresponding period in 2009. The Group’s pre-tax profits also showed similar growth.

During the 9 month period under review, the total assets of the Bank grew steadily from Rs.70 billion to Rs.84 billion. The gross loans and advances portfolio recorded a growth of Rs 8.6 billion or 23% with half the growth coming in the 3rd quarter, indicative of the growing credit demand in the market. Total deposits of the Bank, which stood at Rs.44 billion at the end of December 2009 increased to Rs.48 billion at the end of September 2010 recording a growth of Rs.3.6 billion or 8%.

Net interest income, recorded a 28% growth, increasing from Rs.2, 680 million in 2009 to Rs.3, 434 million by third quarter 2010 aided by volume growth in the lending book, Operating expenses increased by 15% from Rs.2, 449 million to Rs.2, 817 million. A focused approach to expense management helped the cost to income ratio to improve by 2% to 55% compared to the corresponding period in 2009.

Provision for loan losses showed a significant turnaround with a 74% reduction contributing to a substantial growth in the bottom line.  Increase in the general provision is, however, in line with the growth in the loan book. As a result, the NPL Ratio improved further during the quarter and stood at 4.5% compared to 8.5% at year end 2009.  

The high liquidity that prevailed during 2009 due to the low demand for credit has stabilised with the growth of the loan book and as at 30 September 2010, the Statutory Liquidity Ratio (SLR) is at 23.9% and similarly, the Capital Adequacy Ratio (CAR) stood at 13.9 %.

Commenting on the results NTB Director and CEO Saliya Rajakaruna said: “Against the backdrop of improving economic activity, we have delivered good growth in income and profit during the first nine months of the year, by growing our lending book and deposits, maintaining credit quality and focusing on collection of debt supported by a strong expense discipline. The benefits of a broad based portfolio of banking activities under different business lines and by customer segment, managed in line with the Bank’s vision of providing unparalleled customer convenience and innovative solutions lies behind these results.”

“While the period ahead will provide significant opportunities for the industry as the much anticipated economic boom starts to unfold, it will also challenge us to position ourselves to exploit these opportunities. We remain focused on continuing to grow   the Bank by engaging fully in the new opportunities whilst keeping our eyes firmly on the needs of our customers and managing risks,” Rajakaruna added.

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 Centers and extended banking hours which have helped to win over and maintain a strong customer base.