NTB reports solid September on higher loan growth and provision reversals

Nations Trust Bank PLC (NTB) reported a solid financial performance for the three months ended September, driven by robust growth in loans, fee income, and provision reversals. 

The bank reported earnings of Rs. 18.50 per share or Rs. 6.12 billion for the quarter, marking a 48 percent increase compared to Rs. 12.53 per share or Rs. 4.14 billion in the same period last year.

The bank aggressively expanded its lending activities, disbursing Rs. 55.39 billion in the July – September quarter alone. This brought the total loan growth for the first nine months to Rs. 129.35 billion, reflecting a rapid 41.9 percent expansion. Consequently, the bank’s total loan book stood at Rs. 438.21 billion. Remarkably, this aggressive growth was achieved while improving asset quality; the Stage 3 loan ratio improved to 1.03 percent from 1.60 percent at the start of the year, positioning NTB with one of the healthiest loan portfolios in the industry.

Net interest income rose 14 percent year-on-year to Rs. 9.79 billion, despite a slight compression in margins. The net interest margin moderated to 6.15 percent by the end of September from 6.94 percent at the end of the previous year. However, the margin remains among the highest in the banking sector, supported by NTB’s sizable credit card portfolio.

Supporting the bottom line, fee income rose 18 percent to Rs. 2.34 billion. The bank also recorded a significant turnaround in trading, posting gains of Rs. 791.06 million for the quarter compared to a loss of Rs. 942.37 million in the previous year. Additionally, capital gains from the sale of government securities contributed another Rs. 643.25 million.

Operational efficiency also improved, with the cost-to-income ratio improving to 31.07 percent from 34.02 percent recorded at the end of last year. 

On the funding side, the bank successfully raised Rs. 81.30 billion in deposits during the nine-month period, bringing its total deposit base to Rs. 466.09 billion.

On the strategic front, the bank announced the acquisition of HSBC Sri Lanka’s retail banking business during the quarter for Rs. 18.0 billion. The transaction, expected to be completed in the first half of next year, is set to onboard approximately 200,000 new customers to NTB. 

John Keells Holdings PLC currently holds 19.72 percent stake in the bank.