Sri Lanka’s NTB net down 12-pct in June

ECONOMYNEXT – Profits at Sri Lanka’s Nations Trust Bank fell 10 percent from a year earlier to Rs685 million in the June 2016 quarter as interest expenses rose, interim accounts showed.

The bank reported earnings of Rs2.97 per share. In the six months to June, profits were up 2 percent to Rs5.54 per share on total profits of Rs1.27 billion, which were up 2 percent.

Interest income grew 24 percent to Rs5.0 billion in the quarter, and interest expense grew at a faster 47 percent to Rs2.64 billion, allowing net interest income to grow at a slower 5 percent to Rs2.4 billion.

NTB said net interest margins compressed as deposits grew faster than loans could be re-priced.

Sri Lanka had a two bad budgets in 2015, and the Central Bank initially released liquidity and printed money to trigger unsustainable credit and generated a balance of payments crisis and a currency collapse, but interest rates are now correcting to match fiscal excesses.

Specific loan loss provisions fell to Rs18 million from Rs52 million, and general provisions were also lower at Rs108 million from Rs143 million.

Loans grew 6 percent to Rs128 billion in the six months to June. The bank also grew customer deposits 6 percent to Rs137 billion.

Financial investments available for sale – which includes government securities, rose at a fast 48 percent to Rs24 billion, during the six months.

Fee and commission income was up 10 percent to Rs873 million. (Colombo/Aug12/2016)
 

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