NDB in 2019 records its highest ever pre-tax profit
View(s):The National Development Bank PLC has recorded Rs.10 billion profit before tax (PBT), the highest ever in banking operations in its journey of 40 years.
This is a 6 per cent year on year [YoY] growth, affirming its resilience in a challenging market environment that prevailed during 2019.
However NDB’s profit after tax was Rs. 5.1 billion, a reduction of 8 per cent over 2018, impacted mainly by the Debt Repayment Levy (DRL) which came into effect in October 2018, the bank said in a media release.
The bank paid additional tax of Rs.1,003 million via DRL.
Commenting on the results, Dimantha Seneviratne – Director/Group CEO said that in a year of subdued economic growth, the NDB Group directed focus on optimising its’ operating models with decisive management interventions aimed at strengthening the group’s foundation to drive future growth aspirations.
He said total assets reached Rs. 530 billion and advances and deposits each crossed Rs. 400 billion.
“The bank is confident that the overall economy as well as the banking industry will take a positive turnaround in 2020, with further policy stability, tax reliefs given to individuals and corporates including banks and financial institutions, and the relief package extended to SMEs which would act as a stimulus for economic revival. “Internally, we used 2019 to streamline operations and enhance service capabilities, hence now we are geared for a market revival and have placed greater focus on building staff skills to deliver superior customer experience, internal processes, investment in new IT infrastructure, digital capabilities, etc,” he said.
Operating income which consists of Net Interest Income (NII), Net Fee and Commission income, income from financial investments, forex profits and other operating income was Rs. 23.6 billion, a growth of 10 per cent compared to 2018.
Impairment charges for loans and other losses for the year was Rs. 4.2 billion, an increase of 16 per cent over 2018. The increase in impairment charges was mainly due to the increase in the collective provision charge in line with the growth in the loan book. The bank also accounted for provisions at individual levels considering elevated risks due to stressed market conditions. Other provisions under impairment charges included provisions made for permanent diminution in fair value of investments. The bank will continue to place greater focus on collections and recovery processes to mitigate the impact of impairment charges on its profitability.