NDB delivers solid profits with PTP of Rs. 9.4 Bn for 9M

National Development Bank PLC (NDB) reported resilient performance for the nine months ended September 30, 2024, navigating challenges and optimising emerging opportunities in a reviving economy. NDB’s Director/ CEO, Kelum Edirisinghe stated that they are encouraged by the positive trajectory of Net Interest Margins (NIMs), strong cost discipline and improved credit cost.

“These are a result of the focus we maintain on our strategy to deliver sustainable returns and enhance shareholder value in a rapidly shifting economic landscape.”

As Sri Lanka’s political landscape stabilises and the national economic agenda prioritises growth and enhanced living conditions, confidence in the country’s investment potential is rising. These developments signal positive momentum for the economy, and NDB stands ready to support this journey. NDB recorded a net operating income of Rs. 21.5 billion for the period under review covering the nine months ended September 30, 2024 a 9% increase over the comparative period of 2023 (YoY).

The notable reduction in impairment charges by 21% YoY augured well in maintaining the healthy growth in net operating income against de-growth seen in some key revenue lines.

Net interest income remained largely static over the comparative period at Rs. 24.4Bn, within which both interest income and interest expenses declined, attributable to the tapering interest rate environment in the economy. The Bank posted a NIM of 4.21%, consistently above the 4% mark for the third consecutive quarter. Net fee and commission income for the period was Rs. 5.1 billion which continued to normalise over a relatively high base in 2023 alongside moderate balance sheet expansion, with a YoY decline of 7%.

Impairment charges for the period was Rs. 11. billion. Bank level pre-tax profitability (PTP) for the year was Rs. 9.4 billion, a marginal decline of 2% YoY, whilst post-tax profitability was Rs. 4.5 billion. Profit attributable to shareholders at the NDB Group level was Rs. 4.9 billion.

NDB’s strength and stature is demonstrated in its dynamic balance sheet, which stood at Rs. 763.2 billion as at end September 2024. Gross loans to customers was Rs. 501.1 billion, whilst customer deposits were Rs. 611.5 billion as at the end of the period, leading to a loans to deposits ratio of 82%.

Regulatory Liquidity Coverage Ratio (Rupee), Liquidity Coverage Ratio (All Currency) and Net Stable Funding Ratio stood well above the regulatory minimum requirement of 100% at 326.87%, 280.39% and 143.77% respectively. Return on Average Equity and annualised Earnings per Share for 3Q-2024 were 8.02% (Group: 8.22%) and Rs. 13.69 (Group: Rs. 14.92) respectively.