NDB Bank continues steady growth

The NDB group's profit attributable to shareholders increased by 16 per cent to Rs 349 Million as compared to Rs 300 Million for the corresponding period last year. The Group's profit after tax for the period also increased by 16 per cent to Rs 384 Million as compared with Rs 332 Million for the corresponding period last year.

The NDB Bank's operating profit before provisions for the current period was 627 Million as compared with Rs 492 Million for the corresponding period last year, an increase of 28 per cent. The profit before tax increased by 17 per cent from Rs 524 Million in the first quarter of 2007 to Rs 614 Million during the first quarter of 2008, while the profit after tax also increased by 14 per cent from Rs 223 Million in the first quarter of 2007 to Rs 253 Million during the first quarter of 2008.

Overall, the core banking revenue (net interest income, forex and commissions) of NDB Bank grew at a strong pace (25 per cent ) based on a continued growth in loans (11per cent ) and deposits (26 per cent) over the corresponding period last year. The Bank has also diversified its avenues of fee income through products such as Bancassurance, Western Union Money Transfer and Ez Pay.

NDB Bank's loan portfolio quality remains very good with the Non-Performing Loan (NPL) ratio at 2.6 per cent , which is one of the lowest among banks in Sri Lanka. The NPL ratio as at 31 December 2007 was 1.95 per cent . The basis of recognising NPLs was made more stringent by the Central Bank of Sri Lanka from 2008. The ratios for both dates have been calculated by applying this new interpretation.

During the last quarter of 2006, the Central Bank of Sri Lanka mandated a 1 per cent provision on the performing lending portfolio of each Bank. The Banks have been given time to make this provision over ten quarters ending on 31 March 2009.

However NDB Bank reached the required level of provisioning by 30 September 2007 and has continuously complied with this requirement thereafter. The general provision as at 31 March 2008 on the basis stated above was Rs 432 Million.

The total specific provision as at 31 March 2008 amounted to Rs 1,388 Million. The provision for loan losses for the period was Rs 13 Million as compared to a release of Rs 32 Mn for the corresponding period last year.