Nations Trust Bank closed the first half ending June 30, 2017 with a pre- tax profit of Rs. 2,977 million (Mn) up by 27% over the corresponding period in the previous year.
Post tax profits increased at a lower rate of 12% as a result of the increase in the effective tax rate stemming from higher financial services VAT as well as the additional tax provision of Rs. 90 Mn for the inter company dividend transfer which impacted the Group bottom line growth. However the dividend income received from the subsidiaries resulted in a higher profit growth for the Bank and further strengthened the capital base of the Bank. Performance was driven by the momentum achieved in the Bank’s core activities which posted a revenue growth of 21% while the operating expenses increase was kept at 11%.
The resulting improvement to operating margins were somewhat subdued by higher impairment charges for the period under review. Net interest income increased by 19% as the volume growth outperformed the impact arising from the narrowing of NIMs.
Interest income increased by 45% whilst interest expense increased at a faster rate of 70% as deposit rates in the market continued to increase due to tight liquidity.
Net fees and commission based income recorded a growth of 32% primarily driven by cards and trade related products. Other operating income also recorded good growth due to non trade related FX income. Net trading losses for the year amounted to Rs. 267Mn which is reflective of the swap cost arising from an increase in the funding FX SWAP book and unfavorable movements in forward premiums.
Post tax profits increased at a lower rate of 12% as a result of the increase in the effective tax rate stemming from higher financial services VAT as well as the additional tax provision of Rs. 90 Mn for the inter company dividend transfer which impacted the Group bottom line growth. However the dividend income received from the subsidiaries resulted in a higher profit growth for the Bank and further strengthened the capital base of the Bank. Performance was driven by the momentum achieved in the Bank’s core activities which posted a revenue growth of 21% while the operating expenses increase was kept at 11%.
The resulting improvement to operating margins were somewhat subdued by higher impairment charges for the period under review. Net interest income increased by 19% as the volume growth outperformed the impact arising from the narrowing of NIMs.
Interest income increased by 45% whilst interest expense increased at a faster rate of 70% as deposit rates in the market continued to increase due to tight liquidity.
Net fees and commission based income recorded a growth of 32% primarily driven by cards and trade related products. Other operating income also recorded good growth due to non trade related FX income. Net trading losses for the year amounted to Rs. 267Mn which is reflective of the swap cost arising from an increase in the funding FX SWAP book and unfavorable movements in forward premiums.
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