SDB bank sustains high growth in profit in 1Q

• Achieved whilst continuing to drive key sectors forward

Chairman Lakshman Abeysekara

CEO Thilak Piyadigama

Maintaining the growth trajectory displayed in 2020 with a phenomenal 279% annual profit rise in comparison to 2019, SDB bank went on to record an equally strong performance in the first quarter of 2021, particularly through steady growth across its diverse loan portfolio. 

The bank continued to meet the challenges of the current economic climate successfully through relentless digital innovation and service delivery transformation, allowing them to register an almost threefold increase in profit for the three months ended 31 March 2021. Equalling Rs. 302 million, this represents a 190% increase in profit from the corresponding quarter last year. For the quarter under review, earnings per share on profit rose to Rs. 3.3 from Rs. 1.9 per share in Q1 2020. 

In the first quarter this year, the bank grew the volume of loans (net) amounting to Rs. 5.5 billion, up 5.2% from the end of 2020. This was reflected in the bank’s fee income as well, closely linked to its loans, up by a considerable 139%. The bank’s asset or loan quality also improved, with a gross non-performing advances ratio of 4.47% for the quarter, a small but significant reduction from 4.54% in 2020.

Parallelly, the bank maintained healthy Tier 1 and total capital adequacy ratios of 9.44% and 12.71% respectively by the end of March 2021, above the regulatory requirements. The bank stated Rs. 9.3 billion in core capital by end-March, having raised Rs. 1.53 billion in their rights issue in November 2020, with another Rs. 4 billion raised in fresh deposits in the period under review, supporting its liquidity further. SDB bank’s liquidity assets ratio stood above the statutory requirement, at 20.7%. 

Most notably, the bank registered net interest income of Rs. 1.63 billion in Q1 2021, a significant 11% rise from the same period in the previous year. Equally, the bank only had to provide Rs. 156.1 million in possible bad loans during this period, representing a drastic drop from Rs. 413.8 million in the same period in 2020. 

SDB bank’s sustained high-performance in Q1 2021 and its loan portfolio growth plus loan quality for the period can be attributed to the bank’s initiatives, involving SME development, a nationally critical sector amounting to 52% of national GDP. Together with reputed organisations such as The Institute of Chartered Accountants of Sri Lanka (CA – Sri Lanka), MILCO, and DIMO, SDB bank has offered both one-on-one expert mentorship and technical knowledge plus specialised loans as well as leasing promotions to develop SMEs island wide. 

Similarly, the bank’s continuous growth trajectory draws from its efforts at women’s empowerment and the extensive support leant to female entrepreneurs. This is reflected both in female workforce participation at SDB bank, possibly the highest in Sri Lanka, as well as its stance of active support to female-led SMEs. Equally, the bank’s standing as a digital pacesetter in local banking has aided its upward growth trend, with digital transformation efforts both in streamlining internal processes as well as in service delivery innovation for its customers.

The bank’s continuous digital inclusion efforts island wide have also allowed for increased digital and financial literacy across both urban and rural parts of the country, offering digital banking solutions to the masses in Sri Lanka. This has allowed for greater participation in the digital economy and improved access to financial services including loans, thereby directly influencing national economic growth.

SDB bank’s stellar performance in Q1 2021 comes on the back of its continuous efforts in offering value to all stakeholders equally, with an emphasis on valuing each individual while transcending mere transactional relationships. Their approach of supporting nationally critical sectors while offering greater value to all customers through digital transformation is geared to propel the growth levels of the bank even further in the remaining quarters of the year.