The NDB Group’s profit attributable to shareholders for the six months ended 30 June 2011 recorded a significant growth of 37% to Rs. 1 billion over the corresponding period of last year.
The Bank said its strong core banking profits and improved performance of the group companies helped to achieve impressive results.
The Bank’s Net Income increased by 5% over the corresponding period last year. This improvement was supported by the significant growth in loans and advances and deposits by 44% and 41% respectively over the last twelve months. NDB Bank’s core banking profits (operating profit after provision for fall in value of dealing and investment securities less equity income) increased by 9.7% over the corresponding period last year.
The second quarter performance of the bank was significantly higher than the performance for the first quarter. NDB Bank’s Profit Before Tax for the second quarter was Rs.971 m, a growth of 37 % over the first quarter of 2011. This has been backed by strong net income growth of 16% over the same period. The Profit After Tax of the bank for the second quarter was 31% higher than the Profit After Tax for the first quarter of 2011. Profit After Tax of the bank increased even more significantly by 45% over the 12 month period, partly due to the reduced tax rates applicable from 2011.
The loans and advances and deposits portfolio grew by 23% (Rs. 16 b) and by 14% (Rs. 8.6 b) respectively over 31 December 2010. This impressive growth in the Bank’s lending portfolio and the deposit liabilities are well in line with industry growth rates. The bank’s total assets as at 30 June 2011 increased by 28% over 30 June 2010 from Rs. 94.9 b to Rs. 121.2 b.
Despite the significant growth in the Loan portfolio in all the sectors, NDB Bank has been able to contain its Non Performing Loans (NPL) ratio to an all time low of 1.58% which is one of the lowest in the industry, due to prudent underwriting policies and well-defined risk acceptance criteria.
The bank has been able to achieve this low level of delinquencies by the use of strong credit analysis techniques and with the use of proactive risk management practices. The provision cover on NPLs was at 73.5% as at 30 June 2011 with an Open Loan Position of 2.98%, which signify minimum amount of stress on the bank’s equity, on account of un-provided delinquencies.
The Group’s Tier 1 Capital Adequacy Ratio of 14.53% and a Tier 1 & 2 ratio of 16.55% are well in excess of the regulatory minimum of 5% and 10% respectively, providing ample capacity for the rapid expansion planned for the future.
Today, with its presence in full fledged banking, capital markets and insurance, the group positions itself to be unique, and differentiates itself from its peers as a financial services group.
Since its merger with NDB bank (formerly ABN Amro) NDB has transformed itself to be a fully fledged commercial bank, servicing corporate, SME and retail clients, throughout the country. To enable reach, NDB currently has 53 branches in all parts of the country including five in the north and east.
NDB Group differentiates itself from its peers by providing its customers with an integrated value proposition in Banking and Financial Services, including Capital Market and Insurance offerings.
With a healthy balance sheet, strong capital and liquidity positions, supported by its talented and committed team, NDB Group is well positioned to grow from strength to strength as a dominant force within the financial services sector.
In addition to Project Lending which NDB predominantly offered its customers in the past as a Development Finance Institution (DFI), it now offers additionally working capital, trade finance and cash management services to its corporate and SME customers.
The wide spectrum of retail banking products is complemented by its debit card and credit card offerings. NDB Bank became the first bank in Sri Lanka to introduce safe on-line shopping for debit and prepaid cardholders, with the introduction of the “Verified by Visa” facility. This is currently the most secure method available for on-line purchases.
In fact, NDB Bank today is well equipped to service both the corporate and retail sectors. With a healthy and well structured balance sheet, and an affirmed rating of “AA (lka)” by Fitch Ratings, NDB provides its stakeholders, the much desired comfort for their investment and future growth potential. SMEs continue to be the key focus area for NDB Bank.
The aim is to develop this sector by educating and enhancing skills and building their competencies thereby preparing them to face the SME opportunities in the country. In line with this, the bank is conducting workshops in different parts of the country in partnership with the International Finance Corporation (IFC). This has enabled the SME portfolio to grow by 66% over the past 12 months.
Establishing its commitment to rebuilding the conflict affected areas and developing entrepreneurs, the bank has promoted SME products and services in Batticaloa in partnership with the Batticaloa Chamber of Commerce.