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| Tuesday, 30 March 2004 |
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Investor confidence increases: NDB records 8% increase in after tax profit to Rs 904 m in 2003 The National Development Bank (NDB) has recorded Rs 904 million profit after tax for the year 2003 reflecting an 8 % increase over the previous year. The growth is attributed to the results that were effected with improved efficiency, customer service and progress made with enhanced portfolio quality.
The NDB Group's profit after tax attributable to shareholders is also Rs 1,123 million, an increase of 21 % over the previous year. This has been mainly due to the increase of the Banks' stake in Eagle Insurance Company which became a subsidiary in July. Two of the bank's smaller subsidiaries, NDBS, Stock Brokers and Citi National Investment Bank also earned substantially higher profits during the year. The Bank is also focussing to diversify its business interests particularly into commercial banking with the merger of NDB and NDB Bank. Chairman, NDB, S.K. Wickremesinghe in his review on its annual performance said that the growth has been driven by the bank's own profit growth and notable changes in the Group Structure. The Bank has also continued to strengthen its participation in the SME sector while playing an important role in refinancing credit lines to other participating banks. "In April 2003, the bank sold its controlling interest in Mercantile Leasing and thereafter acquired a controlling interest in Eagle Insurance Company. The new venture followed the withdrawal of Zurich Financial Services from its insurance market in Sri Lanka. The gross non-performance loans for the year end were down to Rs 2.7 billion from Rs 3.7 billion at the previous year end", Wickremesinghe said. Director/General Manager of NDB N.S. Welikala said that investor confidence on which the Bank's long term lending activities depend, increased on the assumption of the durability of the ceasefire agreement and improving economic fundamentals. Welikala said that the bank was able to contain the increase in its overhead expenses including staffing costs to 5 % over the previous year. The restructuring of subsidiaries and associates has reaped rewards with all Group companies contributing acceptable returns on investment. The major investments for NDB are now those in NDB Bank and Eagle Insurance Company. He said that if NDB is to retain its focus on project lending, the bank should expand its product range to compete with the commercial banks which are now aggressive of project lenders. The average size of project finance facilities approved also increased due to several large scale projects such as telecommunication and food and beverage sectors. There were also greater demand for floating interest rate and shorter tenor loans as customers anticipated further falls in rates. - (SP) |
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