NTB June earnings drop 26% amid higher provisions – Business

Nations Trust Bank PLC (NTB), a unit of the John Keells Group, saw its results for the quarter ended June 30 2022 (2Q22) down amid a sharp increase in provisions on possible bad debts and expected losses on sovereign debt instruments, although the bank recorded significant growth in its operating result supported by solid basic banking operations.

NTB reported profit of 3.72 rupees per share for the quarter under review or consolidated profit of 1.12 billion rupees, compared to a profit of 5 rupees per share or 1.5 billion rupees, a decrease 26% year-on-year (YoY).

The banking group reported net interest income of 7 billion rupees for the quarter, up 109% year-on-year as interest income rose faster than interest expense. Net fee and commission income from its cards business and digital banking rose 23% year-on-year to Rs 1.6 billion. Operating profit for the quarter was 9.06 billion rupees, up 67% year-on-year, despite another net operating loss of 3.25 billion rupees.
The bank saw its loan book and deposit base grow by 12% each in the six months to June 30, 2022, to reach Rs 276.1 billion and Rs 299.2 billion respectively.

Impairment charges for the quarter under review rose to 4.4 billion rupees from just 670 million rupees a year ago, while for the six months these charges rose to 6.7 billion rupees from 1.3 billion rupees.
“Given the external economic environment, NTB increased impairment provisions for loans, advances and sovereign debt instruments, resulting in a 416% year-on-year increase in impairments,” NTB said in a statement. note on the results. The bank’s bad debt ratio fell to 3.2% from 2.09% six months ago, showing some deterioration in asset quality.

The John Keells Group owns almost 30% of NTB while Central Finance Company PLC owns around 20%. The Central Bank of Sri Lanka (CBSL) had asked both parties to reduce their stake to 20% and 15%, respectively by December 31, 2021. John Keells had further been asked to reduce his stake to 15% by here on December 31, 2022.
“John Keells Holdings and Central Finance have requested an extension of the above deadline from CBSL and are currently awaiting a formal response from CBSL,” the notes to the financial statements read.