NDB Group profit attributable to shareholders up 56% | Sunday Observer

NDB Group profit attributable to shareholders up 56%

  Chairman Ananda Atukorale   &  CEO Dimantha Seneviratne
Chairman Ananda Atukorale & CEO Dimantha Seneviratne

National Development Bank PLC (NDB) completed the first quarter ended on March 31, 2018 on a high note with impressive growth in profitability and business volumes.

Gross income grew by 20% to Rs. 11,943 million, reflecting the enhanced business volumes recorded during Q1 2018, compared to Q1 2017.

Net Interest Income (NII) recorded an impressive growth of 44% to Rs. 3,351 million.

The NII was strengthened by the improvement in Net Interest Margin (NIM) to 3.5% from 3.0% in 2017 and the growth in business volumes.

Net fee and commission income also grew at 28% to reach Rs. 710 million for the quarter.

Net gains from trading and net gains from financial investments both grew in Q1 2018 over Q1 2017, benefiting from the movement in exchange rates and market interest rates. Accordingly, total operating income reached Rs. 5,410 million.

Impairment charges for loans and other losses for Q1 2018 was Rs. 800 million. Impairment at both individual (Rs. 330 million) and collective (Rs. 456 million) level increased, leading to the overall increase in impairment over Q1 2017.

Operating expenses grew by 12% in Q1 2018 over the comparative period, predominantly from administrative and marketing expenses.

The cost to income ratio made an impressive improvement to 35.7%, from 45.5% in 2017.

Operating profit before tax on financial services increased by 40% to reach Rs. 2,678 million. Profit after taxes on financial services and income tax was Rs. 1,561 million at the Bank level. Profit attributable to shareholders at the group level was Rs. 1,152 million and marks an impressive increase of 56% over Q1 2017.

Total assets of the Bank recorded moderate growth in Q1 2018, with a 3% growth over the end 2017 Balance Sheet position. Accordingly, the Balance Sheet stood at Rs. 395.7 billion. Total assets at the Group level was above Rs. 400 billion.

Loans and receivables stood at Rs. 282 billion at end Q1 2018.

In terms of asset quality, the non-performing loan ratio was 2.46% as at March 31, 2018.

On the liability aspect, customer deposits grew by 4% to Rs. 284 billion.

Stated capital of the Bank increased by 37% in Q1 2018 to Rs. 3 billion, due to the scrip dividend of Rs. 5 per share paid as a part of the final dividend for 2017, in February 2018. The Bank remains well capitalised under the Basel III guidelines in the aftermath of implementing SLFRS 9. The Tier 1 Capital Ratio (Minimum Requirement - 7.875%) was 8.73% at the Bank level and 10.14% at the Group level, while the Total Capital Ratio was 13.35% at the Bank level and 14.44% at the Group level.

With respect to SLFRS 9 (Financial Instruments: Recognition and Measurement) which came in to effect on January 1, 2018, the Bank completed the initial assessment and the total additional impairment provision of the financial statements is expected to be approximately in the range of 35-40%.

Return on equity (Group) was 14.03%. Bank Earning per share also improved to Rs. 27.62 from Rs. 24.52.

The Chief Executive Officer of NDB, Dimantha Seneviratne said the results mark a sound beginning for the year and thanked all the stakeholders of the Bank for the support. 

Comments