NTB posts another record year

Nations Trust Bank closed the year with a post-tax profit of Rs 1.5 billion, a growth of 41% over 2010. The current year achievement was driven by a noticeable growth in business volume, modest growth in top line revenue despite falling NII margins, controlled growth in operating expenses, provision reversals and lower taxation.

Ronnie Peiris	Saliya Rajakaruna

Non-fund based (NFB) income on cards and trade recorded good growth against the previous period. Improvements in macro economic factors relating to import/export volumes, tourism and consumer spend bolstered these growth levels. Trade finance volumes, both on imports and exports picked up significantly compared to the previous year with the resultant income increasing by 34%. Credit card related non-fund based income grew by 29%. With the re-configuration of the cards business model coming into force, greater attention was paid to increase business drivers on spend and card acquisitions.

Foreign exchange income for the year recorded a moderate growth of 9% with increased customer values contributing significantly to the overall number. However, despite commendable performance of the core NFB income lines, overall non-fund base income growth for the current year was lower than 2010 due to large trading gains booked in 2010 on the Fixed Income Securities portfolio.

The bank continued to manage costs, curtailing the increase in cost to 6% despite rolling out an expansion strategy with investments made in people, premises, systems and the NTB brand. Group cost income ratio was at 63% compared to 59% for the previous period, mainly due to lower NII margins and mark to market losses in the current year.

The bank has laid down strategies towards managing the cost to income ratio below 50% in the medium term.

The capital position also strengthened to Rs. 8.6 billion with the conversion of the 2nd tranche of warrants leading to a comfortable Group Capital Adequacy Ratios both at Tier 1 and 2 levels. The bank also concluded an issue of unsecured, subordinated debenture amounting Rs 2 billion which augurs well for further expansion of the loan book.

Commenting on the performance CEO/Director Saliya Rajakaruna said, "Our bank had its best year ever in 2011, we not only were able to report a significant uplift in earnings but also a stable balance sheet recording a balanced growth in deposits and advances. The bank's growth over the recent past and performance in 2011 is a continuation of this progressive growth somewhat mirroring the growth of Sri Lanka. As a relatively young player in financial services, NTB is proud of the innovations we have brought to the market and the trust we have garnered."