National Development Bank PLC recorded yet another quarter of sound performance amidst macro-economic challenges brought in by the COVID-19 pandemic for the nine months ended September 30, 2020.
Director/ Group Chief Executive Officer Dimantha Seneviratne, the nine months was one of the most challenging times we encountered in recent history.
“Yet NDB managed to steer through with resilience and the Bank achieved a milestone in its growth journey by crossing LKR 600 Bn in total assets.”
Gross income for the nine months saw an increase of 6% to LKR 46.7 Bn. Within gross income, net interest income (NII) recorded a growth of 4% to LKR 13.7 Bn. NII was impacted by the net interest margin (NIM) of 3.23% for Q3 2020 which was a 30 bps dip from 3.53% in 2019. NIM came under pressure given the interest rate caps introduced on certain products, impact of the moratorium on interest, restructuring of facilities, etc. Fee and commission income also grew by 5% year-on-year (YoY) to LKR 2.9Bn.
Net gains from trading was LKR 779 Mn a marginal increase of 2% YoY. Total Operating Income had a healthy 11% growth to record LKR 19.6 Bn for the period under review.
Impairment charges for loans and other losses for Q3 2020 was LKR 4.8 Bn, a 68%YoY increase.
The Bank also accounted for the day 01 impact on the moratoriums where significant interest concessions were given amounting to LKR 583 Mn, under other impairment charges, as prescribed by SLFRS 09: Financial Instruments. Total operating expenses reduced by 2% to LKR 7 Bn, leading to a cost to income ratio of 35.9%, one of the best cost to income ratios in the banking industry.
The total tax charge for Q3 2020 was LKR 3.2 Bn with an effective tax rate of 42% (Q3 2019: 56%). Post-tax profit was LKR 4.5 Bn, up by 34% whilst profit attributable to shareholders at the Group level was LKR 3.9 Bn, up by 32%.
NDB has approved over LKR 18 Bn of loans under CBSL’s Saubhagya COVID-19 Renaissance Facility, and is the fourth highest bank to approve such loans in the industry.
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