Financial Times

CB investigates NTB forex loss


The Central Bank (CB) is investigating Nations Trust Bank’s (NTB) recent foreign exchange loss, CB sources said. "We are checking whether they have bypassed CB regulations," a CB source told the Sunday Times FT.

A senior NTB official, while reiterating that the foreign exchange income for the first half of 2009 is negative due to losses arising from a breach in operating procedures in the foreign currency banking unit, said the CB recently examined the bank books as part of its routine audit of all banks once in two years. "Now they will scrutinize this ‘operating procedure breach' as a matter of course,” he said. The official said that the moment NTB detected it they wrote to the CB.

He said this had been happening for sometime, but NTB had detected it 'only now', adding that the loss of Rs 800 million has been fully accounted for during the said period. He also said that other operating income has shown a significant increase due to income earned on trading in government securities and increases in other banking activities amounting to Rs 150 million.

An analyst noted that NTB has not explained to the shareholders or the Stock Exchange how they got into this position. “The statement issued after the incident was inadequate,” he said. NTB reported a Rs. 788.11 million pre-profit tax for first half 2009, up by 38% against Rs. 571.1 million in the same 2008 period.

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