Nations Trust Bank closed the first nine months of the year ending September 30, 2016 recording a post-tax profit of Rs.2,038 mn which is a 5% growth over the corresponding period.
Higher tax rates applicable for the current year narrowed the bottom line profit growth. Current quarter performance showed significant improvement with revenue growing by 19%, resulting in pre-tax profits for the quarter increasing by 24%.
The gradual narrowing of NIMs contained revenue growth to single digit levels for the 9 month period despite the loan portfolio growing by 12%.
CEO and Executive Director Renuka Fernando said their performance has been resilient, consistently demonstrating sustainable returns. "Our focus for the remainder of the year is to continue the momentum on credit growth and end the year with a strong financial position. Our well penetrated branch network, dynamic business model, enhancing brand image and the energetic team will steer the Bank to even greater heights in the years to come,”she said. Net interest income growth was at a reduced pace of 6% as interest expenses recorded a faster growth of 48% in comparison to the increase in interest income of 25%.
However, the impact of narrowing NIMs is gradually tapering off as seen by the performance in the current quarter which posted a higher NII growth of 16% over the corresponding period. Net fees and commission income recorded a growth of 11% with significant contributions coming from transactional fees related to volumes processed and card related income.
Net trading income recorded a drop of 25% owning to higher cost on foreign exchange funding SWAPs due to the increase in the SWAP book and related premiums.
The impact arising from the FIS portfolio on net trading positions was minimal for the period under review.
Impairment charges recorded a 33% decrease for the 9 month period mainly on account of a one-off provision made on account of specific facilities in the previous period.
Overall, the Bank’s NPL ratio was at a healthy 2.84% marginally up from 2.76% reported as at end of 2015.
Higher tax rates applicable for the current year narrowed the bottom line profit growth. Current quarter performance showed significant improvement with revenue growing by 19%, resulting in pre-tax profits for the quarter increasing by 24%.
The gradual narrowing of NIMs contained revenue growth to single digit levels for the 9 month period despite the loan portfolio growing by 12%.
CEO and Executive Director Renuka Fernando said their performance has been resilient, consistently demonstrating sustainable returns. "Our focus for the remainder of the year is to continue the momentum on credit growth and end the year with a strong financial position. Our well penetrated branch network, dynamic business model, enhancing brand image and the energetic team will steer the Bank to even greater heights in the years to come,”she said. Net interest income growth was at a reduced pace of 6% as interest expenses recorded a faster growth of 48% in comparison to the increase in interest income of 25%.
However, the impact of narrowing NIMs is gradually tapering off as seen by the performance in the current quarter which posted a higher NII growth of 16% over the corresponding period. Net fees and commission income recorded a growth of 11% with significant contributions coming from transactional fees related to volumes processed and card related income.
Net trading income recorded a drop of 25% owning to higher cost on foreign exchange funding SWAPs due to the increase in the SWAP book and related premiums.
The impact arising from the FIS portfolio on net trading positions was minimal for the period under review.
Impairment charges recorded a 33% decrease for the 9 month period mainly on account of a one-off provision made on account of specific facilities in the previous period.
Overall, the Bank’s NPL ratio was at a healthy 2.84% marginally up from 2.76% reported as at end of 2015.
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