Bonds losses trim Sri Lanka NTB’s Sept quarter profit

ECONOMYNEXT – Nations Trust Bank (NTB) said group net profit for the September 2015 quarter fell 18 percent to 681 million rupees from a year ago with losses in its bonds portfolio and lower interest margins although its credit card business did well.

The group’s interest income fell seven percent to 4.1 billion rupees while interest expenses fell nine percent to 1.9 billion rupees resulting in net interest income falling six percent to 2.2 billion rupees.

Net fees and commission income fell 18 percent to 831 million rupees in the quarter from the year before, interim accounts filed with the stock exchange showed.

Earnings per share for the September quarter fell 18 percent to 2.95 rupees.

EPS for the nine months ending 30 September 2015 fell two percent to 8.41 rupees from the previous year with net profit at 1.9 billion rupees.

Loans grew 14 percent to 113 billion rupees as at 30 September 2015 from the beginning of the year while deposits grew seven percent to 119 billion rupees.

NTB said it estimates it liability for the 25 percent Super Gains Tax at 820.5 million rupees for the group.

Performance for the quarter was “negatively impacted by the marked to market losses recorded on the fixed income securities portfolio in contrast to significant gains made in the corresponding period last year,” a bank statement said.

“Net trading income recorded a significant drop owing to marked to market losses recorded on the FIS portfolio as a result of unfavorable movements in the yields of the underlying government securities,” it said.

The loss for the current period amounted to 233 million rupees compared to a gain of 169 million rupees for the corresponding period last year.

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“Narrowing NIMs slowed net interest income growth particularly in the current quarter,” the statement said.

“The bank strategically pushed for higher loan growth with incremental new business booked at relatively lower margins.”

NTB said portfolios such as corporate and leasing in particular, “felt the pinch of declining yields and heavy competition.”

Net fees and commission income growth of 17 percent for the period under review primarily driven by credit card fee based income and transactional fees.

“Concerted efforts put into penetrate trade hubs paid off with trade related fee income posting a commendable growth of 16 percent,” NTB said. (Colombo/November 11 2015)
 

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