NDB’s PAT Up 115%

NDB reported strong financial results for the first quarter (1Q) ended March 31, 2012 and has made significant progress during the period.  The Banking Revenue for the Q was Rs 2,064 million, a 42% year on year (YoY) increase.  Profit After Tax (PAT) during the quarter increased by Rs 506 million or 115% YoY. Reported earnings included one off Rs 271 million equity income on the sale of its investment in a 100% owned subsidiary, NDB Investment Bank Ltd (NDBIB) and of the 5% direct holding in AVIVA NDB Insurance PLC to its subsidiary Capital Development and Investment Company PLC (CDIC) in March 2012. NDB continues to position itself as the country’s only Financial Services Group with subsidiaries and associates in Investment Banking (locally and regionally), Stockbroking, and Wealth Management, which make up the Capital Markets cluster, and Insurance. This divestment to the Bank’s 99.6 percent owned subsidiary CDIC was carried out as part of the overall Group’s corporate restructuring exercise, with which CDIC now positions itself as NDB Group’s diversified financial services investment arm. Accordingly, these investments will complement CDIC’s existing strategic investments in AVIVA NDB Insurance and NDB AVIVA Wealth Management Ltd.
NDB Chairman Hemaka Amarasuriya said, “We are excited about our 1Q results. We were able to continue the strong momentum built last year and will seek further growth opportunities for the Bank throughout this year. Our discipline in the execution of our strategies has produced excellent 1Q results. Our focused management on all of our banking operations is expected to deliver solid growth into the future and enhance shareholder value.”
The Bank’s PAT growth after excluding this one-off income shows a 52% increase YoY. The Basic earnings per share were Rs 17.96, a 68% YoY increase.
NDB Group’s Profit Attributable to Shareholders for the Q increased by 19% YoY. The growth in NDB group’s “PAS” was lower than the Bank’s PAT as the one-off Rs. 271 million equity income is eliminated in consolidating NDB results. The Bank’s Return on Average Assets and Equity for 1Q 2012 were 2.1% and 22.8% respectively, compared to 1.6% and 15% respectively, over 1Q 2011.
The Bank’s loans and advances increased to Rs 105.2 billion, a 35% YoY increase. NPLs to gross lending portfolio were 1.36% as at March 31, 2012 end compared to 1.82% as at March 31, 2011. Bank’s NPL ratio continues to remain healthy and is well below industry average. The Bank has been able to achieve this low delinquency level due to its proactive risk management practices. The Bank’s robust balance sheet and liquidity means that the Bank is able to continue its lending and maintain a strong capital adequacy.  Additionally total deposits increased to Rs 88.4 billion as at March 31, 2012, a 46% YoY increase.  The growth in assets and deposits was the result of continuing organic growth through the Bank’s existing branch network. The Bank also expanded its network to 62 branches with additional branches in Hambantota and Kaduwela. NDB continued its engagement in SME banking with agriculture, handicrafts, manufacturing, trading & distribution, fisheries, and dairy sectors to develop the country’s entrepreneurs. During the 1Q, NDB also conducted SME capacity-building workshops in Moratuwa, Pilimathalawa, Ambalanthota and Kurunegala in an effort to enrich their knowledge base.  As part of the NDB Group, NDBIB had a positive start to the financial year, showing dominance in the country’s investment banking arena by successfully managing the only two IPOs to debut on the CSE in 1Q 2012-Access Engineering IPO which raised Rs. 500 million and the Mackwoods Energy IPO which raised Rs. 350 million; both were oversubscribed on the opening day. NDBIB also structured several securitization deals for finance companies in 1Q 2012 and collectively raised over Rs 1.1 billion, asserting itself as the country’s leading investment bank.
Commenting on the Group’s future plans, CEO NDB Bank Russell de Mel said, “The challenge for NDB Group on its way forward will be to maintain the growth momentum in terms of assets, liabilities and distribution whilst containing costs. NDB Group will leverage on technology and Innovation heavily as it enters the first half of 2012. Hence, I request you to watch this space as we continue to enhance our customer experience”.