NTB delivers solid 4Q despite higher impairment costs

Nations Trust Bank PLC reported a strong performance for the three months to December 2022 (4Q22) as the

lender booked higher interest income from its assets on the back of elevated rates, which could mostly offset the adverse impacts from higher loan loss provisions. 

The bank reported a net interest income of Rs.8.86 billion in the October – December quarter, up 121 percent from the same period in 2021 as it re-priced its loans in tandem with the interest rates, which rose substantially last year. 
This was reflected in the net interest margin of the business, which rose from 3.85 percent to 6.98 percent within last year. 

The bank didn’t see its loan portfolio growing last year as it to a larger extent closed its lending spigots in view of the tough economic climate, which became apparent after the economy ran out of foreign currency. 
The bank had a loan portfolio of Rs.260.7 billion at December 31, 2022, little changed from Rs.259.0 billion a year ago, with the impact coming from foreign currency translation. 

The bank set aside provisions to the tune of Rs.3.64 billion for the quarter compared to Rs.1.25 billion in the same period in 2021.
The bank’s exposure to sovereign debt is just 2.6 percent of total assets, the bank said in an earnings release. 
The bank reported its Stage 3 impairment loans ratio at 2.56 percent compared to 2.09 percent. 

The bank reported earnings of Rs.1.94 billion or Rs.6.06 a share for the October – December 2022 quarter compared to Rs.1.68 billion or Rs.5.25 a share for the comparable period in 2021. 
Fee incomes rose by 15 percent to Rs.1.80 billion. 

There was a sharp increase in the operating expenses by 94 percent in the three months to Rs.3.55 billion, mainly coming from the personnel expenses and other operating expenses. 
John Keells Holdings PLC has 19.72 percent stake in Nations Trust Bank.