Forex Loss

July 14, 2009 (LBO) – Sri Lanka’s Nations Trust Bank, a unit of John Keells Holdings has lost 800 million rupees on a forex bet, but the bank had ended the June 2009 quarter with a 150 million rupees in the black with bond trading profits, its interim results showed. In the June quarter the bank showed an 800.3 million forex loss and 1,214 million rupees of other income, which covered the gap.

The bank said the forex bet came “from a breach in operating procedure” in its foreign currency banking unit and risk management has since been tightened.

“The aggressive provisioning in the first half, coupled with further tightening of risk management measures, means that we have cleared the decks and placed the bank in a strong position to propel ourselves for greater growth in the next half,” chief executive Zulfiqar Zavahir said in a statement.

Sri Lanka’s government securities rates plummeted in the first quarter from around 20.0 percent to 13.0 percent, giving holders of government bonds chance for large capital gains.

NTB showed government securities of 12.0 billion in its trading portfolio by end-June (up from 8.0 billion in December). The accounts showed funding of 12.7 billion through repurchase deals.

The bank also had 10.6 billion in gov