Nations Trust Bank shows good growth in 3rd Quarter

Nations Trust Bank announced an operating profit of Rs 168.9 million, for the nine months ended September 2005.

This compares to Rs.123.4 million recorded during the same period last year, an increase of 37%. Profit after tax and VAT for the nine months to September was Rs. 74.4 millionn compared to Rs 60.2 million last year, an increase of 24 %. tax rates this year were higher due to the legislative revisions introduced at the end of 2004.

Net interest income increased to Rs 651.5 million (55% increase) from Rs. 420.9 million, while Fees and Other Income increased from Rs.331.3 million to Rs 420.8 million (27% increase). Total Net Income grew by 43%.

The increased revenue was a result of pleasing growth in Balance Sheet volumes, a very aggressive customer acquisition programme, gratifying improvement in Credit Card revenues and the continued focused implementation of the Bank's Strategy to achieve greater than market growth.

Compared to the end of 2004, Customer Deposits increased from Rs. 10.4 billion to Rs. 12.9 billion (24%) and Loans and Advances (inclusive of Corporate Debt Securities) increased from Rs 11.7 billion to Rs 14.5 billion an increase of 24 %.

Corporate Debt Securities of Rs 2.9 billion were backed by Repurchase Agreements amounting to Rs 1.6 billion as at September 30, 2005.

Operating costs (excluding loan loss provisioning) increased from Rs 587.2 million to Rs 772.9 million (32%) mainly due to the additional costs of branch expansion, system upgrade and other costs associated with supporting increasing volumes.

Loan Loss provisions were much higher than last year mainly due to a maturing Credit Card portfolio. It is expected that provisions in the last quarter will be much lower.

The Bank also continues to follows a general provisioning policy of 1% of all advances and has made provision accordingly.

Two more branches were opened this year one at Kadawatha and another at Crescat Boulevard and the Bank will continue its expansion plan to fill perceived gaps in its branch and ATM network over the course of next year.

The Bank also announced last month that an offer had been made to Mercantile Leasing Limited (MLL) to merge by way of offering two Nations Trust Bank shares for one of MLL. Central Bank approval is pending.