National Development Bank PLC (NDB) reported a 64% commendable growth in its Profit After Tax over the comparative period to record Rs. 3,310 million for the nine months ended September 30, 2017.
The Bank’s Profit Before Tax (PBT) of Rs. 5,679 million was an increase of 61% over the comparative period. Continuous and consistent improvement in core banking operations of the bank over the reported three quarters and dividend income from group companies contributed towards this remarkable performance.
The PBT and PAT of the bank, excluding the group dividends grew impressively by 51% and 50% respectively, which is a clear reflection of the strong performance of the core banking operations.
Net interest income (NII) recorded a 23% growth over the corresponding period to Rs. 7,656 million. Accelerated NII growth over the quarters was due to steady growth in loans and advances coupled with improved Net Interest Margins of 2.90% for the nine months of 2017 as compared to 2.62% for the comparative period.
Net Fee and Commission Income of Rs 1,812 mn for the period was a growth of 10% over the comparative period and was in line with the increase in business volumes. Net fee and Commission Income have progressively improved over the three quarters affirming that fee income remains a strategic priority in improving the profitability of the Bank. Net gains from trading had a 16% growth to Rs. 793 mn which was also in line with business volumes generated during the period.
Total Operating Income which is a combination of NII and non-interest income had a 29% growth to Rs 12.02 billion. The total impairment charges for loans and other losses for the nine months was Rs. 872 million, a reduction of 11% over the corresponding period last year. Sound credit review, effective monitoring and recovery processes adopted by the bank have resulted in reduced impairment charges for the period.
Total operating expenses was Rs 5,472 million, an increase of 13% over the comparative period. If not for the one-off cost involved in the pre-payment of a foreign currency loan, the increase was only 8% over the comparative period and reflects the efficient and effective cost management initiatives adopted by the bank, despite branch expansion and launch of new products during the period.
The cost to income ratio (CIR) of 45.8% was well within the bank’s targets of maintaining its CIR below 50%. The profit attributable to shareholders was Rs 2,520 million and was 28% over the comparative period.
The moderate performance in the capital markets activities experienced during the nine months period, continue to pose a challenge to the investment banking and stockbroking businesses within the NDB group, resulting in lower contribution from the group.
0 comments: