National Development Bank PLC (NDB) completed the financial year ending December 31, 2017 with impressive performance across all fronts.
The Bank recorded a 28% growth in gross income to cross Rs 42.5 billion. Net interest income (NII) grew by an impressive 27% to Rs 10.75 billion, supported with the dual impact of an enhanced net interest margin (NIM) of 3% and increased loan volumes due to the strategic balance sheet management and prudent repricing of assets and liabilities.
Net fee and commission income for the year was Rs 2,521 million, a growth of 12% over the year. The Bank’s focused approach in retail and SME sectors whilst working on the accelerated growth in trade finance and remittance business along with the portfolio growth supported this growth in fee and commission income. Chief Executive Officer of the Bank, Dimantha Seneviratne said 2017 has been a highly satisfactory year, during which the Bank stabilized its base, gathered rapid growth momentum and delivered enhanced results to all its stakeholders.
He contributed the success of the year to a streamlined strategy which was pursued with focus, and the commitment and dedication of NDB’s talented team for precise execution.
He also mentioned that the Bank made vast contributions during the year, to individuals, businesses and the nation at large through various financial solutions and services in taking them to new heights of development.
Total impairment charges for loans and other losses was Rs 1,259 million, which was a reduction of 8% over 2016. Within total impairment, individual impairment saw a reduction of 47% to Rs 586 million. Prudent risk management and timely provisioning on the individually impaired loans led to this reversal.
The increase in the collective impairment is attributable to the large loan volume increase seen during the year, amounting to over Rs 46 billion.
Operating expenses increased by 14% in 2017 over 2016 to Rs 7,346 million. The year saw three new branches and 5 ATMs added on to the network, 2 branch re-locations along with 4 new product launches and one product re-launch.
The staff strength also increased in tandem with the business expansions.
The increase in expenses was well managed amidst such expansions, with a largely improved cost to income ratio of 45.51% in 2017, (2016: 49.04%).
In terms of profitability, operating profit before tax on financial services was up by 41% to Rs 7,547 million.
Profit after tax exceeded LKR 4 billion to LKR 4,352 million up by 37% over 2016. At a group level, profit attributable to shareholders also rose by an impressive 38% to Rs 3,716 million. The return on assets ratio (ROA) increased to 1.21% from 0.99% in 2016.
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