National Development Bank PLC recorded yet another quarter of resilient performance against a challenging operating environment and an industry climate marked by slow growth, recording a pre-tax profitability of Rs 7.6 billion, a YOY growth of 11%.
The Bank’s Profit After Tax was RS 3.4 billion for the period, a reduction of 13% over the comparative period [Q3 2018], impacted by the Debt repayment Levy which came into effect on October 1, 2018. Profit Attributable to Shareholders [PAS], including the performance of the Group companies was Rs 2.9 billion, a reduction of 14%, over the comparative period.
Dimantha Seneviratne – Director/ Group Chief Executive Officer of NDB stated that the results recorded by the Bank for the nine months period is a strong reflection of the Bank’s ability to maneuver through challenging conditions and ensure sustained results generated for the benefit of all stakeholders of the Bank.
The GCEO was hopeful that the overall economy as well as the banking industry will be in a better pitch for elevated performance in 2020, with greater political and policy stability with the conclusion of the presidential elections in November 2019.
We have placed a lot of focus on streamlining our internal processes, strengthening internal systems, upskilling our staff, product offerings, digital capabilities, etc., such that we will be in a firm footing to re-launch accelerated growth once the external environment is stabilized; he stated.
Gross income grew by 19% to Rs 43.9 billion, mainly bolstered by growth in Net Interest Income [NII] and net fee and commission income. NII grew by 23% YoY to Rs 13.1 billion, supported by the expansion of the loan book by 10% [Rs 36.4 billion quantum growth] and a net interest margin of 3.40%. Net fee and commission income recorded a growth of 21% to Rs 2.8 billion, making a 16% contribution towards total operating income. Increases in the loan book as well as the thrust in the Bank’s digital financial services propelled the growth in the fee based income.
Net gains from trading were Rs 766.5 million, a reduction of 11% over the prior period. Net gain from financial investments at fair value through Profit or Loss was Rs 2.9 million whilst net gains from de-recognition of financial assets increased by 58% to Rs 663 million, due to the proactive interest rate risk management initiatives undertaken in a volatile market environment. Other operating income in the meantime saw a reduction of 79% to Rs 303.7 million resulting from the exchange losses incurred on the revaluation of the foreign currency reserves of the Bank, which was due to the appreciation of the Sri Lankan Rupee during early 2019 in comparison to the depreciation of the Sri Lankan Rupee in the comparative period in 2018.
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