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‘Nations Trust Bank continues to demonstrate resilient performance amid volatile conditions’

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Nations Trust Bank ended the third quarter with a strong performance, continuing the trend demonstrated in the first half of the year. The loan book recorded an 18% growth during the nine months ended 30th September 2021 against the private sector credit growth of 10.6% during the same period of the year, amidst the challenging business environment.

The Bank extended its fullest support in the implementation of the Government’s initiatives to minimise the impact of COVID-19 on businesses and the community and to stabilise the economy by partaking in the ‘Saubhagya’ loan scheme.

Over LKR 20 billion new credit facilities were disbursed by the Bank under its own revival fund “Nations Diriya” scheme which is dedicated to extending financial support to key industries, enabling such businesses to recommence and rebuild their business operations. The Bank also offered special payment relief schemes and repayment plans for existing borrowers, in addition to the Central Bank mandated moratorium schemes with low-interest rates and restructured repayment plans for some of the identified industries.

Nations Trust Bank raised USD 65 million from overseas Development Finance Institutions during the year to support the Small and Medium Enterprise (SME) sector. The Bank also raised LKR 4 billion, Fitch ‘A’ rated, Senior, Unsecured, Unlisted, Redeemable Debenture in July 2021 further strengthening the medium-term funding profile of the Bank.

Financial results for the period

The Group recorded a Profit Before Tax of Rs.7.46Bn, a growth of 27% for the nine months ended 30th September 2021 compared to the previous year, despite the challenging operating environment experienced during the period.

Supporting the loan growth and economic recovery efforts, average yields on loans reduced by 350bps. A net reduction in yields in the FIS portfolio also contributed to the decline in net interest income. The absence of a one-off interest reversal on moratorium loans similar to what was recognised in the previous year helped negate the decline in interest income. The improvement in CASA ratio to 37% as at end September 2021 from 31% as at the end of September 2020 helped partially offset the decline in interest margins during the period.

Momentum could be seen in Trade Finance related income with the increase in certain Trade Finance related activities. Growth in cards income was contained on account of a decrease in card spend due to changes in customer behavior patterns owing to the restrictions in mobility and overseas travel. Suspension or refund of certain charges by the Bank, considering the current difficulties faced by customers due to the COVID-19 pandemic, negatively impacted the Bank’s fee-based income.

The Bank was able to realise sizable trading profits on its fixed income securities portfolio with the fall in market rates. Gains on foreign exchange trading also increased primarily from FX funding swaps due to a higher depreciation of the rupee during the current period in contrast to the depreciation during the same period last year.

Impairment charges on loans declined by 18% during the period owing to the new underwriting standards and concentration on loan recoveries. Positive flows in the past due buckets together with lower exposures in most risk buckets, reflects a 193bps reduction in the non-performing loan ratio. The Bank continued to assess the uncertainties in the operating environment and to maintain a management overlay in the impairment provisions on exposures to identified risk elevated industries. The Stage 3 loan ratio (net of impairment) and the provision cover for Stage 3 loans stood at 2.73% and 42.62% respectively as at 30th September 2021. The Bank increased the impairment provision on investments in foreign currency denominated bonds issued by the Government of Sri Lanka in line with market practice to reflect the current macro-economic conditions. (NTB)

The Bank was successful in containing the increase in Operating Expenses to 2% despite the Operating Expenses in 2020 being 10% below the corresponding period of 2019. This reflects the cost management culture entrenched across the organization. Continuation of some of the cost saving strategies and initiatives executed last year along with productivity, efficiency drives and focus on some large cost pools were the main reasons for this favorable outcome. Cost to income ratio improved to 42.3% compared to 45.7% in the same period last year, demonstrating the Bank’s ability to considerably enhance efficiency and productivity through digitalization and new ways of working.

The impact stemming from the income tax rate differential in income tax and deferred tax relating to the financial year ended 31st December 2020 was reversed using the applicable new tax rate of 24%. This resulted in a profit after tax of Rs.5Bn for the nine months ended 30th September 2021 with a 61% growth over last year same period.

The Return on Equity stands at 18% and the Return on Assets at 2.19% for the period under review.

The financial position of the Group remained strong as its Tier I Capital and Total Capital Adequacy ratios as at 30th September 2021 standing well above the regulatory levels at 12.9% and 15.8%, respectively without considering the profits earned in 2021. The Statutory Liquid Asset Ratio (SLAR) for the Domestic Banking Unit and the Off-Shore Banking Unit was at 32% and 34%, respectively, as at the reporting date.

Essential banking services were provided continuously despite some parts of the country being isolated with months long travel restrictions imposed as a result of a third wave of COVID-19 during the period.

In true spirit of supporting the national effort, Nations Trust Bank’s employees came together to contribute essential medical equipment for the national COVID Response, by donating a half a day’s salary to the Bio Medical Engineering Unit at the Ministry of Health.   Nations Trust Bank also donated a portable ventilator to the Colombo South Teaching Hospital, Kalubowila earlier this year.

Commenting on the results and achievements, Priyantha Talwatte, CEO/Director stated, “We are committed to growing a healthy asset book and remain focused on delivering our strategic agenda set for the year and enhance digital capabilities with the ultimate intention of achieving customer convenience, cost and process efficiencies, pioneering innovation and thereby, challenging the norm to deliver an unparalleled banking experience to our customers in a new reality. With the nation-wide vaccination program successfully being rolled out, there is an expectancy of a rapid return to economic normalcy, and Nations Trust Bank is fully geared to steer ahead more responsively to the external environment by prioritizing customer requirements supported by an extremely focused and involved Nations team who has demonstrated their agility to deliver sustainable value, given the challenging environment.”



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Business

Sri Lanka Insurance posts a record high GWP achievement of Rs. 43 billion during 2021

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Sri Lanka Insurance, closed the year 2021 with a positive note recording a staggering combined GWP of Rs. 43 billion amidst the turbulent time.

In the year 2021 Sri Lanka Insurance reported 14 % growth in life insurance premium increases to Rs.21.9 billion whilst general insurance reported 5.4% growth in premium, for a total value of Rs. 21.2 billion amidst the stagnant market conditions. The company achieved a combined Gross Written Premium (GWP) growth rate of 9.7 % during the year. Life insurance contributed 51% towards the total GWP whilst General Insurance contributed 49%.

Marking 60 years of excellence as the protector of the nation, Sri Lanka Insurance recorded many remarkable achievements during the year 2021.

Sri Lanka Insurance yet again declared the highest Life Insurance bonus in the industry of Rs. 8.6 billion. The insurer was able to produce 189 MDRT members with 5 COT and 1 TOT member for the MDRT conference 2021 marking a historic milestone as the highest ever representation from Sri Lanka Insurance.

In the year 2021 Sri Lanka Insurance managed to uphold the leadership position of the General Insurance sector and Motor Insurance sector while introducing multiple innovative motor insurance products that cater to the unique needs of customer segments in the motor insurance market.

Further, Sri Lanka Insurance was recognized with many awards and accolades in the year 2021. The insurer tops the ranking in many aspects in the Brand Finance report on Sri Lanka’s Most Valuable Brands 2021 edition. Sri Lanka Insurance was awarded The Most Loved Insurance Brand of the year and the Most Valuable General Insurance Brand of the year proving its prowess to be awarded these prestigious titles for the 4th consecutive year. Also, SLIC Life recorded the highest brand value growth among the Life Insurance brands in Sri Lanka. SLIC was also recognized as a ‘Great Place to Work” in Sri Lanka in the year 2021, reiterating the insurer’s commitment towards developing and empowering employee relationships at the workplace.

Exploring the avenues to broaden the protection to communities SLIC served different segments, age groups and different affinity groups through product and market development initiatives. SLIC Speed Investment and SLIC Early cash and SLIC Minimuthu life insurance products were relaunched understanding and catering to a new generation of SLIC clientele. “Nagaraja” an exclusive medical insurance cover was also launched as the first product designed in Sri Lanka to provide protection for Buddhist clergy and their family members and “Motor Plus Commercial” was launched with unique features to complement the needs of the commercial vehicle users.

SLIC has been making steady progress in transforming its operational architecture and front end customer interfaces to ensure digital integration. SLIC Mobile App introduced many enhanced features to constantly evolve with the consumer needs and proved to be a significant tool during the pandemic period. The motor claim settlement process has undergone a major reengineering process to facilitate fast-track and contactless claim settlements to customers. SLIC also increased the digital integration with other service providers to expand the number of payment platforms available to customers enhancing the accessibility and switching to contactless mode to ensure health and safety guidelines. The “Work Flow Management System” is transforming all internal manual and paper-based operations to digital-driven systemized operations.

Commenting on the excellence achieved during the year SLIC Chairman Eng. Vijitha Herath noted “The past year has been a testing time which compelled us to embrace changes and respond to challenges. As a State-owned insurer and the pioneer of the insurance industry, we have been contributing to the country’s development since inception and we have aligned our corporate goals with the country’s development goals. We have pledged to safeguard the nation by delivering exceptional insurance service and today we have become an icon of excellence In the industry exploring avenues to expand protection across every corner of the island.

“We continue to bring a sense of protection to millions of Sri Lankans with our stable financial performance and service enhancement. We reiterate the trust garnered through generations as the largest and strongest insurer and we continue adding value to all our stakeholders evolving our self to conquer greater heights.”

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No fee required for Selfies at Port City

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Port City Colombo wishes to inform the public that there is no truth in social media posts alleging that the public needs to pay a fee for personal selfies or videos taken at Port City.

However, a payment structure was introduced for personal events, professional and/or commercial filming and photography due to the unprecedented number of such requests received from the public and private sector to use the newly opened Port City Marina Promenade. It has also been brought to our attention that such filming/photography was a hindrance, and violates the privacy of other visitors to the promenade.

Taking public safety and ongoing construction in to consideration, this payment structure and dedicated time periods were introduced for anyone wishing to engage in such professional filming or photography at Port City to avoid hindrance to the public and provide a better service for those who require it. The Marina Promenade is open to the public from 9am to 6pm daily. Paid filming and photography can be carried out before 9am or other time period as requested.

We wish to emphasize that this is not applicable for those wishing to take personal pictures, videos, and selfies inside Port City using their personal phones or cameras. Also, reputed social or mainstream media stations can freely carry out filming/ photography for news or current affairs (non commercial purposes) inside Port City with prior approval from relevant departments.

Charges will only be applicable for filming/ photography of personal ceremonies, weddings, product or fashion promotions, music videos, advertisements or other types of commercial filming. Income received from these will be used for the maintenance of public spaces, lavatories and garbage clearing done by the Estate Management Company (EMC) which manages the public areas of Port City Colombo.

Areas of Port City such as the Marina, Golf Range, Beach Park and ATV Track are managed by private operators on a paid basis since they started operations.

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Eswaran Brothers – A Board poised for governance and growth

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From left; Executive Chairman, Ganesh Deivanayagam, Non-Executive Chairman Dr. Nalin Jayasuriya and Board Director Aruni Goonetilleke of Eswaran Brothers Tea Exporters

COLOMBO; Top regional financial services expert Aruni Goonetilleke has been appointed to the Board of Directors of Eswaran Brothers, further strengthening an eminent team at the helm of affairs at the company. Eswaran Brothers which has been a leader in the value added tea industry for over sixty years, is at the forefront of innovation in the industry.

The Board of Directors of Eswaran Brothers lead by Non-Executive Chairman and well known corporate strategy expert, Dr. Nalin Jayasuriya, boasts of a power packed team that includes Yudhistran Kanagasabai, Independent Non-Executive Director, Chairman of the Audit Committee of Ceylon Tobacco Company PLC and Chairman, Ambeon Capital PLC , Gabriel D’Arcy, Independent Non-Executive Director, Senior VP at Stratagem Partners – a leading European Corporate Strategy and Brexit Advisory Service Provider and Mr. Hanif Janoo a well-known global Tea industry stalwart from Pakistan and Kenya.

To this stellar team a recent addition was top regional financial services expert Aruni Goonetilleke who joined the board back in June 2021. Aruni Goonetilleke, subsequently appointed as Chairperson of Hatton National Bank PLC, is also a Director at Sunshine Holdings PLC. Further, she holds the position of Non-Executive Director at several other listed companies.

Speaking on her appointment, Ms. Goonetilleke said, “I’m happy to be part of the Board of Eswaran Brothers – one of the leading value-added tea exporting companies in Sri Lanka. At a time when the world navigates many challenges, Eswaran Brothers is embarking on an impressive programme of diversification and growth. I look forward to being a part of the leadership of the company as it steps forward in new directions.”

Ms. Goonetilleke who did her Bachelors in Law at the University of Colombo, completed her Masters in Law at Harvard Law School, USA. She was previously the Head of Corporate Banking at People’s Bank. In her 25-years as a financial services professional she has worked in banks in Sri Lanka and Singapore. She was the Chief Risk Officer of Standard Chartered Bank, Sri Lanka and played a key role at the time of the merger of ANZ Grindlays and Standard Chartered Bank in Sri Lanka. She was also the Head of Credit, SME and Commercial Banking and held Global Audit Roles in Wholesale and Retail Banking at Standard Chartered Bank, Singapore.

As one of the premier marketers of Ceylon Tea, Eswaran Brothers works with some of the world’s leading tea brands, helping them meet their customer needs with the supply of high-quality Ceylon Tea. With over six decades of experience, this combination of versatility and customer satisfaction has made Eswaran Brothers Tea the choice source for fine teas and wellness beverages.

“Corporate governance and growth oriented independent directors have been part of the Eswaran Brothers board for nearly a decade. Following the directions set by our Past Chairman, the late Mr. D Eassuwaren, Eswaran Brothers became the first Carbon Neutral Certified tea company in the world and we are now ready to make some big moves as a corporate entity,” said Executive Chairman, Ganesh Deivanayagam. “With Aruni joining the Board, we intend to strengthen our financial oversight to further drive the company’s diversification and consolidation.”

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