National Development Bank PLC (NDB) posted impressive financial performance for the nine months ended on 30 September 2018, with record profit after tax (PAT) of Rs. 4 billion.
Profit attributable to shareholders (PAS) was a growth of 42% compared with the prior period amidst a challenging market conditions. Strong growth was recorded in the Balance Sheet along with improvement in net interest margin (NIM), cost to income ratio (CIR) and returns to shareholders.
The Bank recorded an operating profit before tax on financial services of Rs. 7.1 billion, an impressive increase of 25% over the comparative period of 2017. It is noteworthy that profits from core banking operations (excluding equity income) grew significantly by 43%, affirming the success of the focused business initiatives implemented in line with the Bank’s medium-term strategy.
Accordingly, PAT exceeded Rs. 4 billion for the nine months period, with a 22% increase, demonstrating resilience to the evolving industry developments such as the adoption of SLFRS 9 and new tax regulations.
NDB Group Chief Executive Officer, Dimantha Seneviratne stated that the recorded results are the clear output of the focused strategy the Bank embarked in 2017 spanning up to year 2020.
The Group CEO stated with confidence that NDB is in a sound footing to achieve the medium terms goals of the strategy and bring prosperity t its valued customer base and all stakeholders.
Net interest income (NII) continued to grow in Q3 amidst marked industry challenges, with a 39% growth in NII up to Rs. 10.6 billion. Interest income grew by 17%, whereas the interest expenses increased only by 8%, directly benefitting from the sound balance sheet management and ALCO strategies.
Net fee and commission income grew by 25% over the prior period to reach Rs. 2.3 billion. Increased loan volumes to customers and greater drive of fee generating services such as trade services, digital banking and card operations contributed to this increase in fee income. Operating income also benefited from the sharp US Dollar exchange rate movement experienced in Q3, leading the relatively high gains from foreign reserves. Resultantly, total operating income grew impressively by 30% to reach Rs. 15.6 billion.
Reflecting the industry-wide trend of rising non-performing loans, the impairment charges for loans and other losses of the Bank for Q3 2018 increased to Rs. 2.4 billion as compared to Rs. 872 million for the corresponding period of the prior year.
