National Development Bank PLC [NDB] posted impressive financial performance for the nine months ended on 30 September 2018, with record profit after tax [PAT] of Rs. 4 bn. Profit attributable to shareholders [PAS] was a growth of 42% compared with the prior period amidst a challenging market conditions.
Strong growth was recorded in the Balance Sheet along with improvement in net interest margin [NIM], cost to income ratio [CIR] and returns to shareholders.
The Bank recorded an operating profit before tax on financial services of Rs. 7.1 bn, an impressive increase of 25% over the comparative period of 2017. It is noteworthy that profits from core banking operations.
Accordingly, PAT exceeded Rs. 4 bn for the nine months period, with a 22% increase, demonstrating resilience to the evolving industry developments such as the adoption of SLFRS 9 and new tax regulations.
NDB Group Chief Executive Officer, Dimantha Seneviratne stated that the recorded results are the clear output of the focused strategy the Bank embarked in 2017 spanning up to year 2020.
The Group CEO stated with confidence that NDB is in a sound footing to achieve the medium terms goals of the strategy and bring prosperity t its valued customer base and all stakeholders. Net interest income [NII] continued to grow in Q3 amidst marked industry challenges, with a 39% growth in NII up to Rs. 10.6 bn. Interest income grew by 17%, whereas the interest expenses increased only by 8%, directly benefitting from the sound balance sheet management and ALCO strategies.
Net fee and commission income grew by 25% over the prior period to reach Rs. 2.3 bn.
Reflecting the industry-wide trend of rising non-performing loans, the impairment charges for loans and other losses of the Bank for Q3 2018 increased to Rs. 2.4 bn as compared to Rs. 872 mn for the corresponding period of the prior year.
NDB is well managing its cost levels over the years through structured cost management strategies amidst rapid business growth, with its benefits clearly reflected in enhanced profitability levels.
Total operating expenses increased by 13% over the prior period and was Rs. 6.2 bn. Personnel expenses attributed to the highest portion within total operating expenses with Rs. 3.3 bn and recorded an increase of 24%, reflective of the additional staff recruitments taking place to support the on-going business growth in line with the Bank’s mid-term strategy Transformation 2020.
The CIR further improved to 39.4% as one of the lowest CIRs amongst peer banks.
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