Aug 07, 2018 (LBO) – The Nations Trust Bank closed the six months period ending June 30, 2018 with a post-tax profit of 1,875 million rupees and a pre-tax profit of 3,882 million rupees, the Bank said in a statement.
Net interest income increased by 35 percent mainly attributable to growth in volumes with a marginal improvement in NIMs.
Interest income recorded a faster growth of 26 percent over interest expense growth of 20 percent due to the higher drop in cost of funds over the previous period.
Non fund based income including fees, commission and other operating income increased by 18 percent with trade and transactional fees contributing to a larger portion of the increase.
Net trading losses, which mainly comprise of cost on funding swaps, remained at previous year reported levels as there had been no material movement in the SWAP book and forward premium rates in comparison to the previous period. Customer FX income reported a moderate growth of 16 percent with the volume growth.
Impairment charges for the current year increased due to cash flow stress witnessed in selective portfolios which is also reflected in the increase in the NPL ratio to 3.06 percent from 2.29 percent reported in December 2017, mirroring industry trends.
Industry NPLs stood at 2.50 percent in December 2017 increasing to 3.3 percent by end May 2018.
Expenses recorded a growth of 20 percent which is partly due to the front loading of certain expenses particularly related to branding, marketing activities and investments made on up-skilling of knowledge, employee engagement and culture building.
Investments made in technology and digital platforms during the second half of 2017 also had a direct bearing in expenses growth in the current year. Expenses pertaining directly to business volume growth were well managed at 9percent .
Notably, the Bank reported a higher growth in revenue of 30 percent to commensurate expenses growth resulting in the Cost: Income ratio decreasing to 48.6 percentfrom 52.8 percent reported in the previous period.
Loans and advances recorded a growth of 12 percent primarily driven by corporate portfolio lending. Deposits recorded a growth of 16 percent while CASA grew by 15 percent CASA mix was maintained at 28percent.