Under-fire NDB releases Q1’26 results after adjusting fraud impact

National Development Bank PLC (NDB) on Thursday released the results of its first quarter ending March 2026, after adjusting for the impact of the Rs.13.2 billion fraud reported last month.

In a statement, the bank said the financial impact of the fraud, as internally estimated, has been appropriately recognised in the bank’s financial statements. Accordingly, based on the internally assessed impact, the bank has restated its financial statements, including the comparative information for the prior periods.

The breakdown of the estimated financial impact of the fraud of Rs.13.20 billion as allocated between the current financial year and the prior periods is as follows; Rs.0.91 billion for the period prior to January 1, 2025, Rs.62 billion for the financial year ended December 31, 2025 and Rs.2.67 billion for the first quarter ended March 31, 2026. Accordingly, the results reported in the Statement of Profit or Loss for the comparative quarter ending March 2025 and the Statement of Financial Position as at January 1, 2025 and December 31, 2025 have been restated, the statement said.

The gross financial impact of the fraud has been recognised under other expenses within operating expenses. After adjusting such financial impact of the fraud, the reported post-tax profit for the financial year ended December 31, 2024 of Rs.9.03 billion has been restated to Rs.8.54 billion and the reported post-tax profit for the financial year ended December 31, 2025 of Rs.11.04 billion has been restated to Rs.5.90 billion.

The bank’s total assets if unadjusted for the financial impact of the fraud, as at end 1Q 2026 would have been Rs.988.83 billion, versus a similar asset base as at end-2025 of Rs.935.81 billion. With the financial impact of the fraud adjusted, total assets reported for 1Q 2026 was Rs.977.20 billion and compared with a restated total asset base of Rs.926.17 billion as at end-2025.

Commenting on the latest results, the bank’s Director/CEO Kelum Edirisinghe, stated: “The bank is working closely with all relevant regulatory and law enforcement authorities, including the Central Bank of Sri Lanka, and continues to extend its fullest assistance to facilitate ongoing investigations (into the fraud) and statutory processes including the pursuance of recovering the sums.  Additionally, the Board of Directors of the bank has commissioned Deloitte Touche Tohmatsu India LLP to conduct a Forensic Review of the facts and circumstances relating to the fraud.