Nations Trust posts Rs 502 mn PAT in Q1-13
Nations Trust Bank closed the financial quarter ended March 31, 2013
with a post-tax profit of Rs 502 mn, a growth of 15% over the
corresponding period 2012. First quarter achievement was driven by good
growth in top line revenue, well diversified across business segments
and under pinned by the growth in loans and advances portfolio.
The Bank recorded improved NIMs over previous period due to well
managed asset and liability re-pricing strategies along with the
shifting of the asset mix to more high yielding assets. Net interest
income recorded a growth of 21% over the previous period. Liquidity
diminished along side with the push for growth in customer advances
whilst deposit growth was strategically managed during the quarter. The
Bank continued its efforts to grow low cost balances which reaped good
results recording an 8% growth and improving low cost mix over the level
reported for the year end 2012.
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Arjuna
Gunaratne |
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Renuka
Fernando |
Fees and commission income recorded a moderate growth of 15% whilst
net trading income recorded a significant drop for the current year.
Credit cards recorded a growth of 38% mainly attributable to higher card
fees and merchant commission income. Card business drivers on spend, new
cards and receivables increased over 20% compared to previous period.
The Bank also witnessed negative growth in foreign exchange and trade
finance income due to challenging market dynamics. In contrast to the
market volatility experienced in the previous period due to the currency
devaluation resulting in exceptionally high FX income, subdued market
activity prevailed during the current quarter.
Both FX income and trade finance income were also impacted by the
slow movement in imports, with exports yet to show increasing trends by
end of the quarter. Trading gains on FIS portfolio for the current year
compared to a corresponding loss for the previous year had a favourable
impact on the net trading income for the Bank.
Operating expenses recorded an increase of 19% over previous year
with the cost of expansion, branding and tariff increases adding up to
the operating cost base. Highest increase over previous year was on
account of other operating expenses mainly attributable to consultancy
fees whilst depreciation recorded a drop due to most of the pre 2009
acquired assets being fully depreciated. Group cost income ratio stood
at 58%, with the Bank remaining committed in driving this ratio below
50% in the medium term.
Bank NPL ratio stood at 3.1% compared to 2.9% reported in December
2012. The impact of the growth in absolute NPLs by 15% was somewhat
mitigated by the growth recorded in the loan book. The Bank continued
efforts in improving its risk management framework with close monitoring
of portfolios. The capital position was at a sound Rs.12.5 bn with
Capital Adequacy Ratios both at Tier 1 and 2 maintained at comfortable
levels. As the Bank steadily expanded reach, with the island-wide
expansion of the branch network two new branches were added taking the
network to 59 branches.
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