NDB Group achieves strong profit results for 2006
EARNINGS: NDB Bank announced its full year profit for 2006 and
the overall results show strong progress in terms of implementing the
new business strategy after the merger between National Development Bank
and NDB Bank Ltd on August 1, 2005.
A balanced business is being developed, with the Corporate, SME,
consumer, investment banking and insurance sectors, all making good
progress. There was a significant increase in the Bank’s distribution
channels, with 31 branches now supporting the various business areas.
NDB Bank with a strong financial profile, sound asset quality and
strong capital position has been given a Fitch Credit Rating of ‘AA’
with a positive outlook, a press release states.
The Bank’s profit before tax grew by 95% from Rs 1,071 mn in 2005 to
Rs 2,086 mn in 2006. The Group’s profit before tax also grew by 105%
from Rs 1,866 mn in 2005 to Rs 3,827 mn in 2006. Excluding the
exceptional capital gain, the Group’s profit before tax grew by 29% from
Rs 1,866 mn in 2005 to Rs 2,412 mn in 2006.
The Group’s profit attributable to shareholders, including the
exceptional capital gain, increased significantly from Rs 1,036 mn in
2005 to Rs 2,030 mn in 2006. The profit attributable to shareholders,
excluding the exceptional capital gain, was Rs 1,014 mn compared with Rs
1,036 mn in 2005, due to the impact of higher rates of Income tax and
Financial VAT.
Shareholders’ funds as at December 31, 2006 amounted to Rs 8.55 bn
and Rs 10.57 bn for the Bank and the Group respectively, which are well
in excess of the regulatory minimum standards. The Tier 1 and Tier 2
capital for the Bank and the Group amounted to 15.57 % and 21.95 %
respectively compared with the regulatory minimum of 10%.
The core banking business grew significantly during the year. However
the results of the Bank in 2005 include the performance of National
Development Bank up to July 31, 2005 and thereafter the performance of
the merged entity.
For the purpose of meaningful comparison of the performance of the
merged bank, the analysis below has been presented as if both banks were
merged throughout 2005.
The profit before tax on a merged basis grew by 67% from Rs 1,250 mn
in 2005 to Rs 2,086 mn in 2006. The profit after tax grew by 42% over
the previous year from Rs 706 mn to Rs 1,005 mn. |