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NTB’s
strong performance continues
Group
pre-tax profits top Rs. 1 billion mark
Financial
results contained in Nations Trust Bank PLC’s Annual
Report - 2008 released last week, is a reflection of
the continued strong performance during what was clearly
a challenging year for the Bank, in its relatively short
but eventful decade long history.
Achieving a milestone, the Nations Trust Bank Group
has reported a profit before tax of Rs. 1,028.507 mn.
for the year against Rs. 847.394 mn. reported for 2007,
reflecting a 21% growth.
Profit after tax grew by 17% to Rs. 593.119 mn. for
the year compared to Rs. 504.818 mn. reported for the
last year. Gross income of the Group grew by 49%, with
net interest income growing by 38% and non funds based
income in the form of fees, commissions and foreign
exchange income showing a very healthy growth of 34%.
Deposits grew by a pleasing 19% from Rs. 28.665 bn.
to Rs. 34.146Bn., while Advances grew by 16% from Rs..34.500
Bn. to Rs. 39.940 bn. Deposits and advances growth for
the industry were 7.4% and 6% respectively. Total Assets
grew by 22% from Rs. 55.687 bn. to Rs. 67.732 Bn.
Being the first year of operations under the new Strategic
Plan 2008 – 2012, 2008 was an eventful year for
the Bank.
NTB Chairman Ajit Gunewardene in his message in the
Annual Report states that “The new Strategic Plan
envisaged a number of initiatives relating to brand
building, delivery channels, products and processes.
It also identified the resource requirements of the
Bank, over the five year period in terms of capital,
space, human resources etc. In this regard, I am happy
to mention that a majority of the initiatives were implemented
and resources were secured during the year as planned.”
Commenting on the performance, he also states that “Even
in the backdrop of a slowing down of the Sri Lankan
banking industry, your Bank managed to grow its business
volumes at above the industry growth rates, thus signifying
an increase in the market share.” Further, while
talking about the possible challenges in 2009 and beyond
he states, “We also foresee significant opportunities
to expand and capture profitable market share in this
environment. We believe that we are well poised to grab
these opportunities.”
While the Bank has managed to grow business volumes
and income and contain operating expenses, the non-performing
assets ratio was affected by the deteriorating risk
environment and resulted in an increase in provisioning
for bad and doubtful debts.
Director and CEO Zulfiqar Zavahir in his review in the
Annual Report states “The Banking industry was
not immune to the effects of the market turmoil and
economic slow down experienced during the year. Credit
quality continued to suffer resulting in increased credit
losses and higher non-performing assets (NPA) ratios
across the banking industry. Gross NPA ratio of the
Bank deteriorated to 5.98% as at 31st December 2008
from 4.96% a year before but compares well against an
industry average of 6.2%. Provisions for credit losses
too increased by 117% to Rs. 470.9 mn., contributed
to by the repayment difficulties faced by some segments
of our consumer assets portfolio of Credit Cards and
Loans and to prudential provisions made on account of
several corporate customer exposures over and above
the provisioning policy of the Bank, which is more stringent
than the guidelines of the Central Bank”.
Subject to approval of the shareholders at the Annual
General Meeting to be held on March 30, 2009 at the
Auditorium of The Institute of Chartered Accountants
of Sri Lanka at 10a.m., the Directors have recommended
the payment of a first and final dividend of Rs. 1.50
per share for the year, in comparison to the Rs. 1/-
paid for 2007.
During the period, Fitch Ratings Lanka Ltd. reaffirmed
the A(lka) rating of the Bank which denotes a strong
credit risk relative to other issuers or issues in the
country. During the year, the Bank raised Rs. 1.048
bn. by way of a rights issue and Rs. 1.000 Bn. through
the issue by way of a private placement of unsecured,
subordinated, redeemable debentures strengthening the
Group’s total capital adequacy ratio to 15.70%.
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