The Nations Trust Bank (NTB) says it handled specific challenges well during the year to post an after-tax profit of Rs 1.95 billion for calendar 2012, up 21 per cent from 2011. These challenges, during the early part of the year, included the rising interest rate scenario, devaluation of the currency and the changes in [...]

The Sundaytimes Sri Lanka

NTB reports 21% rise in 2012 profits, says handled challenges well

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The Nations Trust Bank (NTB) says it handled specific challenges well during the year to post an after-tax profit of Rs 1.95 billion for calendar 2012, up 21 per cent from 2011.
These challenges, during the early part of the year, included the rising interest rate scenario, devaluation of the currency and the changes in the import tax structure for vehicles. “These well managed with prudent positioning of portfolios and timely execution of alternate strategies,” the bank said in a year-end results statement.
It said with the macroeconomic conditions being conducive for business, the bank managed to improve performance in all areas notably in deposit mobilization and core earnings in a controlled credit growth environment.
“For Nations Trust in particular the impact of rising cost of funds was greater due to having a relatively lower CASA balance and a disproportionately high share of customer assets being subject to interest rate ceilings. Internal pricing strategies to balance risk and reward on customer assets were reviewed frequently to manage the margin pressure whilst the mobilization effort on deposits continued with emphasis given to acquire low cost deposits. Despite interest costs increasing at a faster rate than interest income . the growth in business volumes compensated for the negative impact as net interest income for the year recorded an of 31% compared to previous period,” it said.
The primary drivers of income growth was credit cards at 36 per cent and fees and commission income from loans and deposits at 30 per cent. The growth in these areas reflected the conducive macro economic factors which prevailed during the year with increased consumer spend and transactional mobility, it said. In contrast, changes to import tax regulations coupled with the depreciation of the rupee curtailed imports volume, and negatively impacted trade finance income which recorded a drop of 17 per cent over previous year.
The bank said it continued its aggressive cost management strategies across business and support functions alike realizing the ‘evermore’ important need to improve productivity and maintain profitability in a competitive environment. “The increases in fuel prices and electricity tariff which occurred during the early part of the year has certainly escalated the operating cost base and the bank has taken specific initiatives towards addressing the cost structures and processes to manage some of the key operational cost lines, such as printing, stationary and travelling,” it said.
Loans disbursement grew by 20 per cent for the year reaching Rs 73 billion. As credit ceiling limited expansion of the loan book, some portfolios were prioritized for growth ensuring a healthy distribution across customer, product and economic segments.




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