Deposits grow 29 percent:

Nations Trust Bank PAT grows 16 percent to Rs. 331 million

In the interim results released to the Colombo Stock Exchange, Nations Trust Bank PLC reported that the Group had achieved an Operating Profit before Income Tax and Value Added Tax on Financial Services of Rs. 788.11 Mn for the six months ended June 30, 2009 against Rs. 571.10 Mn for the corresponding period last year reflecting a 38 percent growth.

Zulfiqar Zavahir

Profit After Tax grew by 16 percent to Rs. 330.92 Mn for the period compared to Rs. 285.03 Mn in the corresponding period last year.

Profit after tax grew at a lower rate than Profit before tax due to significantly higher Income Tax and Value added tax on Financial Services which increased by Rs. 171.12 Mn (59 percent).

Net interest income grew by 34 percent, supported by the increase in deposits of 29 percent, with encouraging growth in the lower cost current and savings deposits. Advances grew by 3 percent. Margins trended down over the period mainly due to the decrease in interest rates across the industry.

While Non-Interest Income grew by 26 percent, Foreign Exchange income was negative due to the exchange loss arising from a breach in operating procedures in the FCBU, on which the Bank had released a statement to the Stock Exchange on June 25. However, this was largely compensated by income earned on trading of government securities, increased fees and other commission income.

Non Interest Expenses were kept under control and increased by 19 percent compared to a Total Net Income increase of 31 percent.

While Personnel and Other Operating Expenses were well below the average increase, Premises, Equipment and Establishment Expenses increased by 55 percent, reflecting the accelerated branch expansion program and other bank-wide initiatives which were undertaken in the second half of 2008. Provisions for Bad and Doubtful Debts continued to pose challenges, with provisions for the half year increasing to Rs. 476.63 Mn from Rs. 233.77 Mn last year.

The Capital adequacy ratio as at end June was 13.6 percent while the consolidated Liquidity ratio was 29.4 percent, both of which were well in excess of the Central bank requirements of 10 percent and 20 percent.

Director/CEO Zulfiqar Zavahir said, “It is pleasing to note that the core business is continuing to develop quite strongly with the Balance sheet and bottom line showing very good growth momentum.