NDB Bank says sharp growth in first half

NDB Bank Group’s post tax profits rose 47% to Rs 1,676 million in the first half of 2007 from Rs 1,143 million for the corresponding period last year after excluding capital gain of Rs 1.01 billion which was generated in the first quarter of 2006 on the sale of the controlling interest in Eagle Insurance.

Group profits attributable to shareholders were Rs 855 million against Rs 494 million excluding the exceptional capital gain. Shareholders’ Funds as at June 30, 2007 amounted to Rs 8.87 billion and Rs. 11.03 billion for the bank and the group, respectively, which are well in excess of the regulatory minimum standards, according to a bank statement.

Bank operating profit before provision for the first six months of 2007 was 1,384 million against Rs 786 million while post tax profit rose by 51% to Rs 1,378 million.

Net Interest Income of the bank grew by 35% from Rs 1,118 million to Rs. 1,506 million mainly due to the significan’t increase in the gross lending portfolio of the bank from Rs 38.5 billion to Rs 48 billion. The total assets of the bank grew from Rs. 55.2 billion to Rs. 68.9 billion. The statement said there was also a significant increase in the customer deposits up at Rs 23.4 billion against Rs 15.7 billion.

Net other income of the bank excluding equity income for the period was Rs 389 million mainly due to the steady increase in commercial banking fee and commission income and forex income.

During the last quarter of 2006, the Central Bank mandated that banks build up a 1% general provision on their performing portfolio and have given them time to make this provision over 10 quarters ending on March 31, 2009.

The bank said it had built up its general provision to Rs. 339 million by June 30 2007, leaving a shortfall of only Rs. 112 million based on the portfolio at that date.