Slow growth in NTB’s 1H 2016 post tax profit
View(s):Nations Trust Bank closed the first half of the year ending 30th June 2016 recording a post-tax profit of Rs. 1,278 million, a relatively slower growth of 2 per cent over the corresponding period. Narrowing of Net Interest Margins (NIM) coupled with unfavourable impact arising from foreign exchange funding SWAPs slowed revenue growth. NIM impact was partly off-set by loan portfolio growth which saw accelerated traction in the 2Q thereby setting the pace for the year 2016, the bank said in a media release. Expenses recorded a growth of 13 per cent as the current period witnessed a higher proportion of investments being made towards technology, people and branding which resulted in the underlying expenses increasing fairly rapidly over the previous period.
The bank said SME loan portfolios recorded an impressive growth of 17 per cent for the first half, however contraction in the corporate book coupled with a subdued growth in the leasing portfolio moderated overall loan book growth for the bank to 6 per cent. The pending disbursements in the corporate book are expected to boost the loan growth in the ensuing quarter. Commenting on the results and achievements, Renuka Fernando, CEO/Executive Director, said, “It has been a very challenging first 6 months for us, particularly with the narrowing of net interest margins impacting our core fund based income. As we become a larger player in the industry reaching out to a larger market segment, narrowing of NIMs is inevitable. Also as an industry we are now gradually moving to a low NIM environment hence the immediate impact comes as no surprise to us, nevertheless significant when comparisons are drawn against the previous period”.