With the current positive economic outlook and the expected growth in the financial services sector, the NDB Group is well positioned to capture these growth prospects given its diversified exposure in to the financial services sector, according to banking industry analysts.
“NDB Investment Bank (NDBIB) is one of the leading investment bankers in the country and with nearly 60 Initial Public Offerings in the pipeline for 2011 where the NDBIB is also expected to take a major share, this will augur well for this year to the group’s bottom-line,” Dhanushka Samarasinghe, Director Research TKS Securities (Pvt) Ltd told the Business Times.
He noted that NDB has also witnessed a sharp drop in cost of funds. “Term deposits contribute a near 45% of the total funding and as a resultant of interest rate slump the bank would benefit from fattening net interest margins this year and also next year,” he added.
Mr. Samarasinghe said that NDB's higher Capital Adequacy Ratio (CAR) will also bring in profits this year. “NDB has significant amount of funds locked for capital adequacy (total CAR is near 21% compared to regulatory limit of 10%) and has one of the highest CARs in the industry. Therefore these funds can be easily used to fund the asset growth at any time which leaves NDB at an advantageous position over its peers,” Mr. Samarasinghe noted.