Latest News

  • Sri Lanka’s Agri-Food Startups Have What Global Markets Need. GLX is Here to Help Get Them There.
  • Mastercard launches one-stop resource site to support digital transformation of SMEs in Asia Pacific
  • Covid-19 surge prompts regular PPE training at English Nursing Care
  • Ceylinco Life donates 82nd & 83rd classroom buildings to schools in Elpitiya & Kegalle
  • Nations Leasing Partners with DIMO To Offer Exclusive Leasing Deals
  • CSE Offers guidance to Stockbroker Firms on best practices and market Surveillance
  • ‘Sri Lanka puts 1990 on speed dial’ – 1990 Suwa Seriya Wins at SLIM Digis
  • Scan Water Bottling Plant striving towards Sustainability

    • Don't miss new videos
      Sign in to see updates from your favourite channels


Ceylon Business Reporter Ceylon Business Reporter Ceylon Business Reporter
Ceylon Business Reporter Ceylon Business Reporter Ceylon Business Reporter
  • Home
  • Economics
    • Automobile
    • Shipping
    • Market
    • Garments
    • Energy
    • Other
  • Education
    • Education
    • Other
  • Markets and financial
    • Banking
    • Commodities
    • Currencies
    • Insurance
    • Investing
    • Other
  • Health
    • Hospitals
    • Medicine
    • Other
  • Lifestyle
    • Clothing
    • Fashion
    • Food and drink
    • Jewelry
    • Other
  • Entertainment
    • Art
    • Books
    • Cinema
    • Music
    • Photography
    • Television
    • Theatre
    • Other
  • Sports
    • Cricket
    • Football
    • Swimming
    • Rugby
    • Other
  • Technology
    • Mobile phones
    • Software
    • Telecommunication
    • Other
  • Travel and tourism
    • Travel
    • adventure
    • Food
    • Hotels
    • Restaurants
    • Other
  • CSR
Home Markets and financial Banking NATIONS TRUST BANK CONTINUES TO SUPPORT REBUILD THE NATION IN THESE UNPRECEDENTED TIMES

NATIONS TRUST BANK CONTINUES TO SUPPORT REBUILD THE NATION IN THESE UNPRECEDENTED TIMES

publisher
May 22, 2020 May 22, 2020
NATIONS TRUST BANK CONTINUES TO SUPPORT REBUILD THE NATION IN THESE UNPRECEDENTED TIMES
NATIONS TRUST BANK CONTINUES TO SUPPORT REBUILD THE NATION IN THESE UNPRECEDENTED TIMES

Sri Lanka demonstrates to have managed the COVID-19 outbreak reasonably well, while the economic fallout from the local and global lockdown will be unprecedented. It has affected supply chains significantly and the cascading effect will severely impact almost all businesses in the country. As it stands now, the impact of the economic downturn cannot be reasonably estimated.

Banking has been declared as an essential service in order to support critical activities of the economy such as facilitating importation of essential items. The customer requirements have generally been limited to essential transactions and access to cash.

Impact of COVID-19 on the Banking Industry  – In light of the existing unprecedented crisis situation, the Government of Sri Lanka, through the Central Bank of Sri Lanka (CBSL), has provided a debt moratorium to businesses and individuals affected by Covid 19. This would certainly impact credit growth, credit quality, liquidity and revenue growth which would ultimately impacts the profitability of the Banks.

The CBSL has allocated a re-financing facility to support the economy while relaxing certain regulations to accommodate the banks to assist COVID – 19 affected businesses and individuals. Some of these key relaxations are related to capital conservation buffer, non-performing loan classification, Statutory Reserve Ratio, Statutory Liquid Asset Ratio and Liquidity Coverage Ratio. The Institute of Chartered Accountants of Sri Lanka (CASL) also issued a guidance note on financial reporting considerations suggesting measures that can be adopted during these uncertain times.

Impact of COVID-19 and Bank’s response – The Bank has taken all recommended measures to ensure the safety and wellbeing of its employees, customers and all other stakeholders during these challenging times and continues to adhere to the guidelines issued by the Government and health authorities.

The Bank has been able to operate all of its branches alternating between locations within its island wide network. Business continuity arrangements were initiated in order to facilitate essential business transactions and provide continued services to customers through our various channels during this period. Our investments in digital technology continued to benefit customers during this hour of need, shown by the extensive use of Bank’s digital platforms. Also maximizing the benefits of investments in technology, many staff members have been able to work from home with secure access to operating systems.

One of the key priorities of the Bank has been ensuring that it maintains a strong liquidity position during these challenging times, enabling it to meet ongoing commitments without any hindrance. Managing fund outflows, facility rollovers and utilization levels as well as arranging additional funding lines were implemented.

Financial results for the first quarter of 2020 – Group’s Operating profit before all taxes declined by 7% owing to the reasons mentioned above, while Profit after Tax increased by 24% due to withdrawal of the Debt Repayment Levy and NBT on financial services.

Interest income declined by 8% due to the lack of growth in the loan book and interest ceiling imposed from April 2019. Average Weighted Prime Lending Rate reduced by 296 basis points as at end of 1Q 2020 Vs 1Q 2019. Average loan book declined by 2.64% in 1Q 2020 Vs 1Q 2019. However, cost of funds declined at a faster rate of 13% due to effective fund management strategies supported by the growth in current and savings account balances. As a result, reduction in Net Interest margins was contained to 30bps while Net Interest Income reduction was contained at 1%.

While lending, credit cards, trade and deposit related fees recorded a drop owing to lower business volumes, Net FX gains increased during the period increasing the total net revenue to 2%.  Gains on trading FX increased arising from forward FX funding swaps due to the depreciation of the Sri Lankan Rupee during the period in contrast to the appreciation in the previous period which offsets to some extent by the revaluation losses arising from balance sheet positions for the same reason accounted under Net other operating income. The Bank continued to benefit from the relatively lower funding costs of the funding swaps compared to high cost rupee deposits.

The increase in operating expenses was kept to a minimum of 1% as a result of comprehensive cost containment strategies implemented throughout the period under review, especially in times of curtailed growth in business volumes. Cross functional teams heading various initiatives on cost management, productivity and efficiency improvements resulted in minimizing increases in some large cost pools contributing to the overall management of the Bank bottom line

When assessing the impairment provisions, the Bank considered the potential impact of the COVID-19 pandemic on customers as well as the relief package introduced in the form of a debt moratorium by the government.  Additional impairment provisions were made for identified customer segments impacted due to COVID-19 related developments, by assessing potential delays to the cash flow expectations based on currently available information, leading to a 46% increase in the impairment charge.

Capital adequacy and Liquidity -The Group’s Tier I Capital and Total Capital Adequacy ratios as at 31st March 2020 stood at 12.44%, and 16.62% respectively, both well above the corresponding minimum regulatory requirement of 8% and 12%, applicable as at the reporting date. CBSL reduced the Capital Conservation Buffer by 0.5% with effect from 27th March 2020. The Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit and the Off-Shore Banking Unit was at 24.91% and 26.74% respectively as at the reporting date.

Looking Forward – A shortfall in revenue is expected against the targets set as a result of the debt moratorium, interest rate ceilings and also due to sluggish credit growth. The bank is in the process of gathering applications for the debt moratorium by customers and the eligible applications are still being reviewed. As a result, the impact on the Bank’s future earnings cannot be reasonably estimated at the present moment. At the same time, the Bank will cautiously explore new business opportunities that may present from time to time.  The Bank has also launched a number of initiatives to curtail expenses to minimise impact to profitability in line with the prevailing business environment.

Supported by a strong capital base, healthy liquidity buffers and with robust risk management models, the Bank is confident that it has the required resources to withstand the potential impacts arising from this crisis as currently foreseen. The Bank will continue to proactively assess the developments in the environment in order to implement required actions while providing necessary support to   the measures taken by the government to revive the economy.

Previous Post
Res

Coats Digital, Res.Q and Serai unveil strategic collaboration to digitize apparel industry

Next Post
Image02

Emirates sets industry-leading safety standard for customers travelling as it resumes operations

Related News

SME-masthead

Mastercard launches one-stop resource site to support digital transformation of SMEs in Asia Pacific

publisher
January 25, 2021
Fairfirst-SLIBA-picture-2

Fairfirst Insurance leading & redefining health insurance

publisher
January 25, 2021 January 25, 2021
appigo-Logo

appiGo’s ecommerce platform helps you build your own online store

publisher
January 25, 2021 January 25, 2021

Sampath Bank Continues to Partner with Central Bank on Promoting QR Payments

publisher
January 24, 2021 January 24, 2021

MOST VIEWED

SriLankan Airlines staff at the closing ceremony of TrailSL
1

TrailSL draws to an endwith the support of SriLankan Airlines team members

admin
1.1K
Management-from-The-Wild-–-101-Lessons-Learnt-authored-by-Wilfred-Sarath-Eranga-Perera2

Globally acclaimed ‘World’s first wildlife travel-based management lessons book’ by Wilfred Sarath Eranga Perera to be launched in Sri Lanka.

publisher
653
Classic-Destinations-Logo3

Classic Destinations, one of the First DMC to receive ‘Safe & Secure Certification’ from SLTDA

publisher
518
Image.4

Emirates expands its operations in the Americas in line with increased passenger demand

publisher
469
Presenting-the-token-of-appreciation-to-the-medical-heroes5

HEALTHCARE HEROES AT IDH RECOGNIZED

publisher
461

Archives

  • January 2021 (174)
  • December 2020 (210)
  • November 2020 (188)
  • October 2020 (222)
  • September 2020 (238)
  • August 2020 (194)
  • July 2020 (212)
  • June 2020 (182)
  • May 2020 (141)
  • April 2020 (131)
  • March 2020 (180)
  • February 2020 (210)
  • January 2020 (186)
  • December 2019 (180)
  • November 2019 (185)
  • October 2019 (232)
  • September 2019 (173)
  • August 2019 (197)
  • July 2019 (169)
  • June 2019 (96)
  • May 2019 (186)
  • April 2019 (94)
  • March 2019 (178)
  • February 2019 (163)
  • January 2019 (169)
  • December 2018 (180)
  • November 2018 (190)
  • October 2018 (179)
  • September 2018 (179)
  • August 2018 (217)
  • July 2018 (229)
  • June 2018 (135)
  • May 2018 (187)
  • April 2018 (150)
  • March 2018 (210)
  • February 2018 (195)
  • January 2018 (195)
  • December 2017 (191)
  • November 2017 (253)
  • October 2017 (265)
  • September 2017 (219)
  • August 2017 (293)
  • July 2017 (133)
  • June 2017 (192)
  • May 2017 (225)
  • April 2017 (147)
  • March 2017 (277)
  • February 2017 (97)
  • January 2017 (103)
  • December 2016 (114)
  • November 2016 (214)
  • October 2016 (241)
  • September 2016 (152)
  • August 2016 (133)
  • July 2016 (207)
  • June 2016 (201)
  • May 2016 (210)
  • April 2016 (184)
  • March 2016 (143)
  • February 2016 (130)
  • January 2016 (188)
  • December 2015 (193)
  • November 2015 (226)
  • October 2015 (257)
  • September 2015 (238)
  • August 2015 (187)
  • July 2015 (196)
  • June 2015 (175)
  • May 2015 (186)
  • April 2015 (135)
  • March 2015 (181)
  • February 2015 (158)
  • January 2015 (104)

Ceylon Business Reporter is the premier business reporting website in Sri Lanka. To publish your article, please contact us on ceylonbusinessreporter@gmail.com

Contact:
0772 500 600
0713 500 600

—————————————–
Our Sinhala Version
www.lbr.lk
(Lanka Business Reporter)

Categories

  • Home
  • Economics
    • Automobile
    • Shipping
    • Market
    • Garments
    • Energy
    • Other
  • Education
    • Education
    • Other
  • Markets and financial
    • Banking
    • Commodities
    • Currencies
    • Insurance
    • Investing
    • Other
  • Health
    • Hospitals
    • Medicine
    • Other
  • Lifestyle
    • Clothing
    • Fashion
    • Food and drink
    • Jewelry
    • Other
  • Entertainment
    • Art
    • Books
    • Cinema
    • Music
    • Photography
    • Television
    • Theatre
    • Other
  • Sports
    • Cricket
    • Football
    • Swimming
    • Rugby
    • Other
  • Technology
    • Mobile phones
    • Software
    • Telecommunication
    • Other
  • Travel and tourism
    • Travel
    • adventure
    • Food
    • Hotels
    • Restaurants
    • Other
  • CSR

Recently Published

Keynote-by-Dr-Jane-Goodall,-Primatologist-and-Anthropologist-at-BIOFACH-2020

Sri Lanka’s Agri-Food Startups Have What Global Markets Need. GLX is Here to Help Get Them There.

publisher
January 25, 2021 January 25, 2021
SME-masthead

Mastercard launches one-stop resource site to support digital transformation of SMEs in Asia Pacific

publisher
January 25, 2021
IMG_PC_PPETRAINING

Covid-19 surge prompts regular PPE training at English Nursing Care

publisher
January 25, 2021 January 25, 2021
Copyright © Ceylon Business Reporter Web Solution By: Thik Solutions

    • Don't miss new videos
      Sign in to see updates from your favourite channels


  • Home
  • Economics
    • Automobile
    • Shipping
    • Market
    • Garments
    • Energy
    • Other
  • Education
    • Education
    • Other
  • Markets and financial
    • Banking
    • Commodities
    • Currencies
    • Insurance
    • Investing
    • Other
  • Health
    • Hospitals
    • Medicine
    • Other
  • Lifestyle
    • Clothing
    • Fashion
    • Food and drink
    • Jewelry
    • Other
  • Entertainment
    • Art
    • Books
    • Cinema
    • Music
    • Photography
    • Television
    • Theatre
    • Other
  • Sports
    • Cricket
    • Football
    • Swimming
    • Rugby
    • Other
  • Technology
    • Mobile phones
    • Software
    • Telecommunication
    • Other
  • Travel and tourism
    • Travel
    • adventure
    • Food
    • Hotels
    • Restaurants
    • Other
  • CSR