Sri Lankan banks are navigating through a set of unique challenges hitherto not experienced by Sri Lanka or the banking sector, NDB Bank said this week. “In such context we are exercising maximum diligence, with high priority on prudent risk management strategies, concerted support to customers in need and preserving shareholder value. We also remain strongly aligned to the Government’s mission in expeditiously reviving the national economy, with the support of the International Monetary Fund,” said bank Director/CEO Dimantha Seneviratne in his comments on the institution’s 9-month performance ending 30th September 2022.
Financial performance continued to be challenged by the prevailing macro-economic conditions, adversely impacting profitability for a continued third quarter, as seen across the entire banking industry, the bank statement said.
The nine months period under review posted a pre-tax profit of Rs. 790 million, a sharp 91 per cent reduction over the comparative period of the nine months ended 30 September 2021. Whilst the top line continued to grow, the profit deceleration reported since the beginning of 2022 is predominantly attributable to the increased impairment charges booked in both the loan book and investment portfolio, warranted by macro-economic conditions.
Despite this, performance of core banking operations was noteworthy, where net interest income grew by 39 per cent to Rs. 22.2 billion.
With the upward movement in interest rates in the market, interest income as well as interest expenses increased, reflecting timely re-pricing of the asset book, and mobilisation of deposits respectively.
The bank set aside Rs.22.2 billion as impairment charges for the period under review, a phenomenal 234 per cent increase over the comparative period. The greater portion of impairment charges continued to comprise provisions made for foreign currency denominated government securities, factoring in the revisions to the sovereign rating of the country earlier this year on account of the country’s debt restructuring measures and the impact arising from rupee depreciation.
“Given subdued economic activity, business growth in the banking industry for the remainder of the year will be moderate. Reduced debt serviceability of customers and potential restructuring anticipated on exposure to Government’s international sovereign bonds will also exert pressure on industry-wide capital adequacy level,” it said.
You can share this post!
Content
The Judicial Service Commission (JSC) has interdicted Colombo Fort Magistrate Kosala Senadheera.
Mr. Ali Sabri Rahim, a Member of Parliament (MP) for Puttalam District whom an open warrant had been issued, attended a public ceremony at Al Aksha National School in Kalpitiya today (16) as the special guest of honor.
The deadline for online applications to the 2024 G.C.E. Advanced Level (A/L) Examination has been extended until July 12, the Department of Examinations said.
The Supreme Court today refused interim relief in an application filed by President’s Counsel Senaka Walgampaya seeking an Order from the Supreme Court compelling the President to appoint judges to fill the existing vacancies in the Court Of Appeal.
Leave Comments