Nations Trust Bank PLC (NTB) reported improved earnings for the September quarter (3Q19) amid a reduction in provisions made for possible bad loans, the interim financial accounts released to the Colombo bourse showed.
The lender, with a total asset base of Rs.327.7 billion, reported earnings of Rs.3.98 a share or Rs.1.1 billion for 3Q19, compared to the earnings of Rs.3.68 a share or Rs.1.04 billion reported for the same period, last year.
The net interest income of the banking group rose 6 percent year-on-year (YoY) to Rs.4.1 billion while the net fee and commission income edged up one percent YoY to Rs.1.63 billion.
The total operating income of the banking group rose to Rs.5.1 billion, up 12 percent YoY.
The impairment charges for the quarter fell 33 percent YoY to Rs.711.9 million.
The bank’s bad loans ratio however rose to 6.06 percent as at September 30, 2019, from 4.58 percent in end-December 2018.
The operating expenses of the banking group rose 2 percent YoY to Rs.2.6 billion.
For the nine months ended September 30, 2019, NTB reported earnings of Rs.8.96 per share or Rs.2.5 billion, compared to earnings of Rs.10.34 a share or Rs.2.9 billion reported for the same period, last year.
The net interest income for the period rose 8 percent YoY to Rs.11.9 billion amid a significant increase in interest expenses.
“A higher increase of 14 percent 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,” NTB said in an earnings release.
The impairment charges made on possible bad loans rose 13 percent YoY to Rs.2.5 billion.
NTB gave Rs.12.3 billion in loans during the nine months, an increase of 6 percent from end-December 2018.
The deposit base of the bank however contracted to Rs.228.5 billion, from Rs.231.9 billion end-December 2018.
Meanwhile, the banking group’s Tier I capital ratio of 11.61 percent, as at September 30, 2019, was comfortably above the minimum requirement of 8.5 percent, which became effective from January 1, 2019 under Basel III.
The total capital ratio of 14.3 percent was also in excess of the Basel III minimum requirement of 12.5 percent. The John Keells group has a 29.56 percent stake in NTB.