Resilience from Nations Trust Bank amidst challenges
View(s):Nations Trust Bank Group has demonstrated strong resilience amidst external challenges, to record a profit of Rs.3.71 billion, marginally up from 2018.
Subdued economic conditions which prevailed in the country affected many key economic sectors impacting the financial performance of businesses leading to low credit growth and higher non-performing loans. The Easter Sunday terrorist attacks and the election momentum further exerted pressure on credit growth in the industry, the bank said in a media release.
In her comments, Renuka Fernando, CEO/Executive Director stated “Despite the headwinds present in the operating environment, our fourth quarter witnessed an improved performance over the previous quarters of 2019, which is encouraging. With a cautious approach in growing the assets book, we remain committed to delivering our strategic agenda set at the beginning of the year to strengthen our digital capabilities, with the ultimate intention of achieving cost efficiencies, pioneering innovation and thereby challenging the norm to deliver an unparalleled banking experience to our customers”.
Group pre-tax profits recorded a 9 per cent increase over the previous period whilst post-tax profits dropped to the previous year level largely due to the full impact of the Debt Repayment Levy in 2019. The bank’s post-tax profits recorded a drop of 8 per cent due to the inter-company dividend income recorded in the corresponding period of 2018.
Due to the prevailing challenges in the economy, the bank followed a cautious approach in expanding its advances portfolio, which contributed to a slowdown in the loan book to a 2 per cent growth leading to a moderated net interest income (NII) growth of 6 per cent.
The group was also required to pay substantially higher income taxes in respect of the current year under the new tax regime introduced by the Government in April 2018. Taxes and levies to thegovernment accounted for Rs. 4.7 billion which is 56 per cent of the operating profit of the group.