NDB reports strong performance in 3Q

NDB’s performance for the nine months ended 30 September 2012 indicates a strong growth momentum. The net profit after tax of Rs. 2,342 million for the period show an increase of Rs. 804 million (52 per cent) compared to the prior year corresponding period.

The impressive performance during the period results from the continued focus on achieving a number of main objectives, including re-focusing its business and pursuing a growth agenda.

Key initiatives aimed at developing SME and retail segments and improving asset quality remain on track. The bank has expanded its distribution network and continues to work on a number of IT initiatives which enabled to offer service enhancements for its customers and bring substantial improvements in operating efficiency.

The interim performance is contributed by growth in the core banking profits and net interest income grew by 25% to Rs. 4,032 million and Forex income grew by Rs. 561 million during the period.

The reported results also include the equity income of Rs. 536 million gained from the sales proceed on the sale of investments of NDB Investment Bank Ltd., NDB Stock Brokers (Pvt) Ltd., and the five per cent direct holding of Aviva NDB Insurance PLC, to NDB Capital Holdings PLC.

NDB continues to benefit from the group synergies and provides a unique value proposition to its customers providing a wider array of products and services. The consolidated group performance is also commendable with profit attributable to the shareholders increasing by Rs. 334 million to Rs. 2,041 million over the corresponding period last year.

The bank’s basic earnings per share of Rs. 17.23, indicates an increase of 40 per cent over 30 September 2011. The bank’s return on average assets and equity for the current period was 1.91 per cent and 20.83 per cent respectively, compared to 1.74 per cent and 16.63 per cent, respectively, over the nine months of 2011.

The bank’s loans and advances increased to Rs. 113 billion as at 30 September 2012, an increase of Rs. 19.0 billion, or 21 per cent, compared to 30 September 2011. The NPLs to gross lending portfolio of 1.35% as at September 30 2012 continues to remain healthy due to the proactive risk management practices of the bank, and is well below the industry average. The liquidity and capital ratios remain strong with a total risk based capital ratio of 12.6%, well above the 10 per cent considered “adequately” capitalised by bank regulators.

During the third quarter the bank continued to build its distribution network to provide greater accessibility and convenience to its clients by expanding its footprint in the northern region with the opening of the branch in Chunnakam.

NDB Bank continue to remain committed towards SME development in the country and opened a dedicated, state-of-the-art SME Centre in Kurunegala with the aim to provide a one stop shop for the diverse needs of entrepreneurs in the area.

This centre provides 360 degree solutions ranging from financial expertise on SME banking services, industry expertise for those who intend to start up new business ventures to investment and capital management advice and a gamut of customised credit facilities.

The bank also conducted a number of SME workshops in several regions including Matugama, Kaduwela, Chilaw and Nittambuwa in a bid to educate, empower and enrich the entrepreneurs in these areas. Meanwhile, NDB Stockbrokers opened two dedicated stock broking centres in the cities of Gampaha and Galle as a first step towards taking NDB’s unique universal banking proposition to customers across the country.

NDB Group recently announced its agreement with American International Assurance Company Limited (AIA) of Hong Kong, one of the largest insurance companies in the world with an exclusive focus on the Asia-Pacific region to sell NDB’s shareholding in the Aviva NDB Holdings Lanka (Private) Limited (Aviva NDB Holdings).

The net receipt of US$ 59 m of the intended sale process is expected to be earned by the Group by end 2012, subject to the necessary regulatory and legal arrangements. This will result in NDB Group’s strong capital base to improve further to a significant level which will enable enhanced growth of its core banking business, which together with NDB’s brand strength, the geographical reach and leveraging on the well positioned group companies will result in shareholder expectations reaching greater heights.

CEO Russell De Mel said: “The third quarter results again prove the robustness of our business model improving risk return profile and our foot print in the country whilst contributing towards national development. The performance during the period reflects sound execution of our business strategies, which centre on operating consistency and a disciplined approach to asset and cost management. We thank our customers for their continued support and our staff for their commitment and contribution to the bank’s success.”

Chairman Hemaka Amarasuriya commenting on the performance said: “The bank expects to build on the strong performance achieved during the interim period in 2012, and remains well-positioned to capitalise on the broad economic trends that have large-scale potential in the country and the region. We have some of the most talented bankers in the business today. They share a commitment to building long-term client relationships by combining exemplary service and exceptional banking expertise.”