NTB’s 2017 results show 31% growth in pre-tax profit
View(s):Nations Trust Bank closed the financial year ending December 2017 with a post-tax profit of Rs. 3,371 million, up by 18 per cent over the previous year while pre-tax profit rose by 31 per cent.
A higher effective tax rate stemming from the increase in the financial services VAT rate as well as the additional tax of Rs. 210 million on inter-company dividend payments impacted the group bottom line growth, the banking group said in a media release. Healthy portfolio growth and strong fee-based income growth enabled the group to record higher pre-tax profits, despite the effects of narrower NIMs and an increase in impairment provisions.
“The faster increase in deposits rates which mirrored market trends due to tightening of market liquidity, especially in the first half of the year, resulted in interest expenses increasing by 56 cent whilst the corresponding increase in interest income was lower at 42 per cent. However, this trend was somewhat reversed in the second half with the decline in cost of funds and a moderate pick-up in NIMs,” it said.
Net trading losses for the year amounted to Rs. 558 million which is partly reflective of the swap cost arising from an increase in the funding of the forex swap book by 30 per cent and increase in SWAP premiums by 117bps.
However, the bank continued to benefit from the relatively lower funding costs of the forex swaps compared to high cost rupee deposits.
Impairment charge increased by 58 per cent primarily due to the increase in individual impairment as the weather-related weakening of the country’s agriculture sector had trickle down effects on several industry sectors.
Loans and advances recorded a well balanced growth of 25 per cent with deposits growing by 28 per cent, faster than the industry growth of 17 per cent.
Commenting on the results and achievements, Renuka Fernando, Director/CEO stated, “It has been an extremely rewarding year as the bank not only exceeded in achieving the financial goals set for the year but also successfully executed a numbers of strategic initiatives in our customer experience and digital journey. We look forward to another year with anticipation and renewed energy as we pursue our plans to deliver sustainable growth with customer centricity at our core.”