NTB reports 10% drop in pre-tax profit in 2Q2019
View(s):Nations Trust Bank (NTB), amidst rising NPLs, increased credit cost and moderation of credit growth, recorded a 10 per cent in pre-tax profit in the second quarter of 2019 over the previous period largely stemming from increased impairment charges.
Post-tax profits took a further hit largely due to the Rs. 383 million impact arising from the Debt Repayment Levy.
“Despite the headwinds present in the operating environment, the bank continued pursuing its strategic initiatives identified at the beginning of the year in the areas of CASA growth, digital journey, cost efficiencies and the upskilling of people, further strengthening the foundation for capturing a larger component of the upside of business growth in the medium term,” the bank said in a media release.
It followed a cautious approach in expanding its advances portfolio during the current challenging economic conditions, which has contributed to a slowdown in the loan book growth leading to a moderated net interest income growth of 9 per cent. A higher increase of 21 per cent is seen in interest expenses due to the increased cost of funds and a higher mix of medium term funding raised for better diversification of the funding base.
Commenting on the results and achievements, Renuka Fernando, CEO/Executive Director stated, “All our efforts and focus is to record an improved performance in the second half of the year with the focused strategies towards better recoveries and lower impairment provisions. 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.”
Whilst credit cards, trade and deposit related fee-based income recorded a moderate growth, lending related-fees recorded a drop owing to lower volumes and the absence of one off fees earned from syndication facilities in the previous period. Net trading losses arising from the movement in SWAP premiums is largely negated by the revaluation gains arising from balance sheet positions accounted under other operating income. The bank continued to benefit from the relatively lower funding costs of the forex swaps compared to high cost rupee deposits.