NDB crosses Rs. 500 bn asset base, post-tax profit drops
View(s):The National Development Bank PLC has recorded yet another quarter of resilient performance against a challenging operating environment and an industry climate marked by slow growth, recording a pre-tax profit of Rs.7.6 billion, up by 11 per cent from the 2018 July-September quarter.
The bank’s post-tax profit however fell to Rs. 3.4 billion, a reduction of 13 per cent over the comparative period (Q3 2018), impacted by the Debt Repayment Levy which came into effect on October 2018.
Profit Attributable to Shareholders [PAS], including the performance of the group companies was Rs. 2.9 billion, a reduction of 14 per cent, over the comparative period, the bank said in a public statement.
Dimantha Seneviratne – Director/ Group CEO of NDB said that the results recorded by the bank for the 9-month period is a strong reflection of the bank’s ability to maneuver through challenging conditions and ensure sustained results generated for the benefit of all stakeholders of the bank. He was hopeful that the overall economy as well as the banking industry will be in a better pitch for elevated performance in 2020, with greater political and policy stability with the conclusion of the presidential elections in November 2019.
“We have placed a lot of focus on streamlining our internal processes, strengthening internal systems, upskilling our staff, product offerings, digital capabilities etc so that we will be in a firm footing to re-launch accelerated growth once the external environment is stabilized.” he added.
Gross income grew by 19 per cent to Rs. 43.9 billion, mainly bolstered by growth in Net Interest Income (NII) and net fee and commission income. NII grew by 2 per cent YoY to Rs. 13.1 billion, supported by the expansion of the loan book by 10 per cent and a net interest margin of 3.4 per cent.
Net gains from trading fell by 11 per cent over the earlier period.
The impairment charge for the 9-month period was Rs. 2.9 billion, higher than the earlier comparative period. The higher impairment charge was mainly due to provisions made at individual levels considering the elevated risks identified in the current slow economic environment. “The bank is mindful of the stresses experienced in the industry and is continuously reviewing the collection and recovery process to minimise the high impairment loss effect to the bank,” the statement said.
The bank’s non-performing loan (NPL) ratio which has been on an upward trend since end 2018 increased to 4.93 per cent, reflective of the wider industry trajectory for NPLs.