National Development Bank PLC total operating income posted a growth of 23% to LKR 8.2 Bn, supported by enhanced net interest income (NII), fee income and other non-fund income bases
NDB Group CEO Dimantha Seneviratne noted that the period was marked by two fundamental changes, one -the prospect of prolonged low interest rates, and the other - greater inclination towards digital engagements from our customers.
“NDB strategized in response to these changes well, which ensured continued support to our customers as well as preserved returns to our shareholders. The Bank will fully deploy prudent and timely strategic initiatives in response to the pandemic, the development and impact of which is yet to be fully gauged,” he noted.
This also led to a broadly stabilized net interest margin of 3.29% compared to 3.07% of 2020.
Driving NIMs was the CASA base of LKR 129 Bn in Q1 2021 growing impressively by 58% over Q1 2020 (quantum of growth – LKR 47 Bn), which also raised the CASA ratio from 20% to 26%.
Fee and commission income recorded a healthy growth of 29% to LKR 1.3 Bn due to larger credit volumes across all segments and increased transactions routed through NDB Neos digital platforms.
Impairment charges for loans and other losses for Q1 2021 were LKR 2.2 Bn, an increase of 70% YoY.
On total operating expenses, the same was LKR 2.5 Bn for Q1 2021, a 4% increase over Q1 2020.
Accordingly, operating profit before all taxes for the period was LKR 3.5 Bn, an increase of 19%. Total taxes for the period was LKR 1.1 Bn, comprising VAT on financial services and income tax, with income tax rate reducing to 24% from 28%.
Post-tax profitability enhanced to LKR 2.3 Bn, with solid growth of 34% whilst profit attributable to shareholders was LKR 2.4 Bn, up by an impressive 90%, complemented by improved performance of the NDB Group’s capital market cluster, making up the unique financial service powerhouse in Sri Lanka.
NDB sustained its thus far healthy balance sheet growth well into Q1 2021, wherein the total asset base grew by 2% to LKR 636 Bn over December 2020 (YTD). Though moderated, this is a YoY growth (i.e. over Q1 2020) of 15% and commendable in the prevailing subdued economic conditions.
On funding, the Bank’s deposits base neared the LKR 500 Bn mark with deposits closing at LKR 499.5 Bn.
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