Sri Lanka’s Nations Trust Bank March quarter profit up 30-pct

ECONOMYNEXT – Profits at Sri Lanka’s Nations Trust Bank increased 30 percent from a year earlier to 725 million rupees in the March 2018 quarter on improving interest margins despite a surge in loan-loss provisioning, interim accounts showed.

The bank reported group earnings of 3.38 rupees a share in the quarter, according to interim financial statements filed with the Colombo Stock Exchange.

"Profitability growth was underpinned by growth in loans and advances during the period under review along with improving net interest margins," the bank told shareholders.

Nations Trust Bank was trading 50 cents higher at 86 rupees in early trading Friday.

Interest income rose 30 percent to 8.3 billion rupees while interest expenses fell 22 percent to 4.8 billion rupees, expanding net interest income by 43 percent to 3.5 billion rupees.

Net fees and commission income increased 15 percent to 1.3 billion rupees.

Loan-loss provisioning increased 170 percent from a year earlier to 478.9 million rupees in the March 2018 quarter. 

The bank told shareholders that the growth in loan-loss provisioning was due to the combined impact of portfolio growth coupled with some stress seen in selective portfolios, resulting in a non-performing loans increasing to 2.62 percent of total loans, up from 2.29 percent the previous December 2017 quarter.

"The bank has put significant focus to strengthen the collection and recovery processes," Nations Trust Bank said.

Trading losses rose 263 percent to 202 million rupees and included costs related to its swap book expanding 30 percent and forward premiums increasing 50 basis points.





Operating expenses including personnel and depreciation fell 14 percent to 2.3 billion rupees.

Nation Trust Bank’s deposit base grew 9 percent from the previous December 2017 quarter to 211.5 billion rupees in the March 2018 quarter. The bank’s loan book grew 7 percent to 200.3 billion rupees. 

The banking group’s capital adequacy ratio improved to 15.07 percent as at end March 2018, from 13.89 percent the previous quarter. The minimum regulatory requirment is 11.875 percent. (COLOMBO, 11 May 2018)

Updated to group-level results

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