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| Tuesday, 17 August 2004 |
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Nations Trust Bank posts Rs. 31.8 million group profit after tax for 1H Nations Trust Bank continued the steady progress made in the first quarter and recorded a Group Profit after Tax of Rs 31.8 Million for the six months ended June 2004. Operating profit was Rs 71.4 Million when compared to Rs 160.6 Million recorded during the same period last year. The profits recorded by the Bank in 2003 were boosted by capital gains. Excluding these gains and other one off items, the net income increased by nearly 40% and the operating profit by 11 %. The extension of the VAT on profits to the bank's subsidiary, the increase in the VAT rate to 15% as well as other amendments to tax regulations, in particular those relating to brought forward losses, increased the Bank's tax liability significantly. While costs increased by 34 %, the bulk of the increase was due to credit card operations, which commenced in August 2003. There was also the additional costs of running the four new branches opened this year. For the six months, Customer Deposits increased from Rs 6.6 Billion to Rs 7.9 Billion (20%) and Loans and Advances from Rs. 6.5 Billion to Rs. 7.3 Billion (12%). This growth could be considered commendable in the light of the uncertain environment and the significant changes in the operating model which the Bank has been implementing as part of its strategy review. The latter half of the quarter saw the momentum picking up, which augurs well for the rest of the year. The performance of the American Express Cards business continued to exceed expectations. The quality of the Advances portfolio remains very satisfactory. This is also reflected in the provisioning requirements for the quarter. The Non Performing Loan Ratio stood at a praiseworthy 5.6 % at the end of the half-year, well below the average for the industry in Sri Lanka. With a view to improving service levels, the Flexcu be core banking system is being upgraded in the next few months, to the latest version. This will enhance the existing delivery channels including internet banking personalised ATM transactions, as well as tele and SMS banking. |
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