NTB March profit gets a cushion from lower impairments

Nations Trust Bank PLC (NTB) reported a higher profit for the quarter ended in March 2024 (1Q24), supported predominantly by the lower provisions made for possible bad loans, as the economy is improving along with borrower profiles, which enhances its debt serviceability.
The bank reported a net profit of Rs.3.78 billion for the January-March period or Rs.11.58 a share, compared to Rs.2.79 billion or Rs.8.56 a share in the same period last year.
The bank set aside Rs.558.3 million for possible loan defaults, just a fraction of Rs.2.1 billion provided in the same period last year.
The bank is yet to see any meaningful growth in its loans, as its gross loan book slipped just under one percent to Rs.289.7 billion during the first quarter.
The bank also saw its deposits losing by 3.7 percent to Rs.336.7 billion.

The banks are however growing more confident about the prospects about the economy and thereby the growth, as the interest rates have now reached that once elusive single-digit levels.
The bank reported a net interest income of Rs.9.09 billion for the three months, up 2 percent from a year ago.
The bank’s net interest margin, the gap between what it earns from its loans and what it pays for the deposits, narrowed slightly to 7.17 percent, from 7.72 percent at the start of the year.
The bank’s Stage 3 loan ratio, the equivalent of the non-performing loans, was among the lowest in the industry, at 2.15 percent, compared to 2.34 percent.
The fee incomes rose by 16 percent to Rs.2.09 billion, as the bank typically generates more fee incomes from its card base, as the bank is an issuer and sole acquirer of the American Express cards in Sri Lanka, commanding the market leadership in the premium segment.
The bank’s share ended Rs.2.75 or 2.29 percent higher at Rs.122.75 yesterday.