NDB achieves profit growth, resilience in challenging year
View(s):The National Development Bank PLC posted solid financial results for the financial year ending December 2020 with profit after tax (PAT) up by 8 per cent to Rs. 5.5 billion in a challenging environment amidst the COVID-19 pandemic
In a media release issued by the bank, Dimantha Seneviratne, Director/ Group Chief Executive Officer reflecting on the year stated that “2020 was one which put to test, the capabilities and capacities of each one of us to adapt to unforeseen challenges. NDB stood up to these challenges boldly and gracefully, demonstrating NDB’s dynamism, versatility and proficiency in serving the nation through many economic cycles. In many instances, as a bank, we took the lead in facing the new challenges, especially in the digital front”.
Gross income growth moderated to 3 per cent in 2020 compared to 2019 (YoY) to Rs. 60.7 billion, reflecting reduced business volumes in the year, impact of interest rates concessions and interest deferments stemming from moratoria granted – phenomena experienced across the industry due to the effects of the pandemic. The bank also accounted for modification losses on such moratoria where significant interest concessions were given, as prescribed by SLFRS 09: Financial Instruments. As a result, NII was Rs.17.7 billion, with a narrow growth compared to 2019.
NDB’s total assets crossed the Rs. 600 billion mark in 2020, with the asset base closing at Rs. 627 billion by end 2020, resulting in YoY growth of 18 per cent.
Despite bank deposits becoming less attractive in a low interest rate climate, the bank recorded an impressive growth of 21 per cent in deposits, which translated to a quantum growth of Rs. 85 billion. Within this CASA deposits grew by 53 per cent, an equivalent of
Rs. 42 billion.
The Return on Average Shareholder Funds [ROE] for the bank was 13.13 per cent [2019:13.73 per cent] and the Earnings per Share Rs. 23.77 [2019: Rs.23.05] for FY 2020.
The NDB approved over Rs.18 billion of loans under Central Bank’s Saubhagya COVID-19 Renaissance Facility, and is the fourth highest bank to approve such loans in the industry. Approximately 28% of its loan book was under debt moratoria by the end of the year, which was approximately 40 per cent in June 2020.