Nations Trust Bank steers through Q3 2022 with strong performance

• 62% YoY growth in Operating Income
• PBT of Rs. 9.3 b at a YoY growth of 25%
• PAT of Rs. 5.2 b at a YoY growth of 6%
• Strong Capital Adequacy with Tier I CAR of 12.59% and Total CAR of 14.85% 

Chariman Gihan Cooray

Director and CEO Hemantha D. Gunetilleke

Nations Trust Bank PLC said yesterday it has reported a strong 3rd quarter with YTD Operating Income of Rs. 27 billion, up 62% year-on-year (YoY). 

Despite the volatile environment, the bank recorded Profit Before Tax of Rs. 9.3 billion, a growth of 25% YoY and PAT of Rs. 5.2 billion, up 6% YoY.  

Director and CEO Hemantha D. Gunetilleke said: “We have delivered another strong quarter continuing the trend demonstrated in the first half of the year. The results underpin the fundamental strengths of bank’s Liquidity, Capital Adequacy and Risk Management framework. These fundamental strengths have ensured that we are able to consistently provide banking service excellence to our customers despite the challenging external environment.”

With higher earnings during the quarter, Earnings Per Share continued to improve throughout the year and stood at Rs. 17.55 as of 30 September 2022. The Return on Equity (ROE) as at Q3 2022 was 17.26% compared to 18.31% last year.

The negative economic environment resulted in impairment provisions on loans, advances guarantees, and commitments increasing 266%, weighing down returns. Uncertainties in the operating environment and negative flows from moratorium loans led to higher provisions, while Sri Lanka’s sovereign rating downgrade announced earlier this year also contributed to increased provisions despite a relatively lower ISB and SLDB holding. 

As a result of the revised VAT rates on Financial Services, higher profits and tax reversals in the previous year, Nations Trust Bank’s overall tax expenses grew by 65% during the reporting period. As outlined by the Government budget for 2022, the surcharge tax of 25% over taxable income for 2021, which amounted to Rs. 1.9 billion, was also considered during Q2 2022 against the retained earnings, as per the guidelines issued by CA Sri Lanka.

The bank’s overall financial position in Q3 remained strong with comfortable capital buffers with a Tier I Capital ratio of 12.59% and Total Capital Adequacy ratio of 14.85%. The Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit was 32.86% at the reporting date.

Looking ahead, Gunetilleke added, “Despite the prevailing economic environment, the bank will pursue its growth agenda in selected market segments, delivering growth opportunities for our customers and long-term value for all stakeholders.”