Saturday Sep 21, 2024
Saturday Sep 21, 2024
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The bank was able to achieve Net Interest Income of Rs.5.2 billion, which was a commendable 27% growth, despite the low interest regime. The NII achievement was also challenged by the relative stagnant credit growth prevalent in the industry.
The net fee and commission income of Rs.1.1 billion was another positive contributor to the bank’s Profit after Tax, with a 38% increase over the previous year. This reiterates the bank’s solid focus on fee based income, by leveraging the wide array of banking products and services NDB offers to its clientele.
NDB also extensively made use of the cross selling opportunities available via its group companies to achieve sound fee-based income levels. Net gains from trading and forex income declined by 18% compared to the corresponding period last year, due to the marked depreciation of the Sri Lankan rupee in the first half of 2012, which led to the revaluation of the balance sheet.
The significant increase in other operating income was primarily due to the capital gain of approximately Rs.5.4 billion made on the strategic divestment of AVIVA NDB Insurance PLC in December 2012.
Efficient cost management
Cost management remains a key strategic focus at NDB. The bank has been able to restrict its cost growth to 18% for the third consecutive quarter, despite opening nine new branches during the 12 months ended September 2013. The bank’s continuous effective cost saving and monitoring strategies resulted in the bank’s cost-to-income ratio being maintained at the same levels as of the prior period.
The strength of the NDB Group was reflected in the profits attributable to ordinary shareholders increasing by 10% over the last year’s comparative period, to Rs. 2.2 billion. The top contributor to the group’s enhanced performance was the capital and the investment banking cluster.
The NDB Group has a strong footprint in financial services including areas such as wealth management, investment banking and securities management through its subsidiaries.
Total assets of the bank rose to Rs. 183 billion, a noteworthy 12% increase over the nine month period. Loans and advances grew by 6%, amidst the low credit growth environment.
NDB continues to support the national economic revival, harnessing the benefits of its strong capital base and maintaining considerable focus on SMEs, micro financing, project loans and export oriented businesses.
Growing customer deposits
The bank’s customer deposit base achieved the same trajectory as assets, recording a 10% satisfactory growth to Rs. 119 billion compared to December 2012.
Benefiting from a robust risk management framework together with rigorous recovery processes adopted by the bank, NDB recorded an NPL ratio of 1.94% (gross), well below the industry average of 5.2%.
The bank’s Tier I capital at 14.2% reflected a noteworthy increase compared to December 2012 which was 11.2%. The Tier I & II capital stands at 15.2%. A strong capital base is a clear indicator of the bank’s resilience to any shocks or losses that it may encounter and the capability to expand its operations and leverage on opportunities arising in the economy.
NDB’s ROE was 46.6% compared to 21.2% for the year ended 31 December 2012. The bank’s EPS and ROA for the nine months ended 30 September 2013 are Rs. 49.70 and 4.7% respectively. When adjusted for the exceptional capital gain, the bank’s ROE and ROA were 16.70% and 1.60% respectively.
Customer-centric focus
NDB Chairman Hemaka Amarasuriya reflecting on the nine months ended 30 September 2013, emphasised that the bank places the customer at the centre of its key strategies and excellence in customer service is constantly pursued. Staying committed to this objective, NDB extended service levels to ‘9 a.m. - 6 p.m. Full Service Banking’ from September 2013 bringing in an absolute form of convenience for both personal and business customers alike.
NDB’s newly appointed CEO Rajendra Theagarajah stated that the bank is well positioned to exploit the opportunities arising in the economic renaissance of Sri Lanka. The bank strategically and methodically approaches new prospects that arise with the rapidly awakening economic activities in many areas of the country. Three new branches were opened during the 3rd quarter, bringing the total number of branches up to 76.
The bank is well poised for the remainder of the year, to sustain its performance and deliver a balanced outcome to all its stakeholder groups.
