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| Wednesday, 23 February 2005 |
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Tsunami affects NDB group profits The NDB Group announced its results for 2004, in the context of the achievement of a major milestone, namely the passage of enabling legislation on 10th December, which permits the merger of National Development Bank (NDB) and NDB Bank Ltd (NBL), subject to further regulatory, and shareholder approvals. NDB Group announced profits before tax of Rs 1,287 Mn for 2004 compared with Rs 1,526 Mn for 2003, a decline of 16%. Profit attributable to shareholders reduced from Rs 1,123 Mn to Rs 703 Mn, a reduction of Rs 420 Mn (37%). Profits were affected in particular by Tsunami related provisions / costs and by increased tax charges. Tsunami costs reduced after tax profits by Rs 150 Mn at NDB. Group profits were also depressed by the Tsunami related 20% decline in profits at Eagle Insurance Ltd (Eagle) amounting to Rs 64 Mn from Rs 318 Mn in 2003 to Rs 254 Mn in 2004. The NDB Group owns 65.9% of Eagle. The tax charge for 2004, was Rs 176 Mn higher than in the previous year, and included a one-off provision of Rs 123 Mn for taxes levied in the Budget for November 2004 on gains on Government securities earned in 2003. Tsunami costs at NDB and Eagle and 2003 taxes, resulted in a reduction of profits attributable to shareholders by Rs 332 Mn in 2004. The cost of credit declined this year with improved portfolio quality, and the Group is exceptionally well provisioned in accordance with NDB's commitment to maintaining a high quality of earnings. |
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