NDB Bank continues steady growth

Posts profit of Rs. 1.3 billion in second quarter:

The core banking revenue (net interest income, forex and commissions, etc ) of NDB Bank grew at a steady pace by 15% over the corresponding period last year, as a result of the significant growth in loans and advances by 20% and deposits by 23% over the comparative period.

The Profit Before Tax and the Profit After Tax of the Bank excluding the exceptional equity capital gains earned by the Bank during the corresponding period last year increased by 18% and 23% respectively to record Rs. 1.3 billion and Rs. 632 million for the second quarter of 2008.

The group profit after tax and the profit attributable to shareholders also increased by 7% and 9% respectively over the corresponding period last year excluding the equity capital gains earned by the Bank during the corresponding period last year, CEO of NDB Bank Eran Wickramaratne said.

The Bank continues to progress as a financial service provider by offering a comprehensive range of banking products to its corporate, SME and consumer customers. These products and services are backed by efficient electronic processing including ATM’s, state of art Internet Banking Services, Touch - Banking by phone and multiple delivery channels, operated by teams of highly experienced banking professionals.

NDB Bank took another step towards consolidating its position in the financial sector by purchasing 23.86% of shares owned by Bank of Ceylon in the Capital Development & Investment Company PLC (CDIC) for Rs 1.15 b on 11 July 2008. Prior to the purchase, NDB owned 75.8% of CDIC, a public quoted company in the Colombo Stock Exchange. The recent purchase of CDIC shares by NDB increases its effective shareholding in Eagle Insurance Company PLC (Eagle) from 32.4% to 41.1%. CDIC is now positioned as an effective vehicle for NDB’s plans for local and regional growth.

The customers of the NDB Bank also have access to the products and services of the NDB Group, including insurance from Eagle, stock brokering from NDBS stockbrokers and Investment Banking from NDB Investment Bank, among others. Innovation and technology have been the hallmarks of NDB Bank and the rapid expansion of the branch network has helped the customers to enjoy an excellent service from its highly customer oriented staff.

The overheads of the Bank increased by 21% as compared with the corresponding period last year. The increased expenditure was due to investments in distribution channels, technology and brand improvement and inflationary pressure. Despite the increased expenditure, the Bank’s cost income ratio of 43% for the current period still compares very favourably with the ratio of other local Banks.

The effective overall tax rate of the Bank inclusive of the Financial Services VAT was 53% for the current period as compared with 48% for the corresponding period last year. The lower effective rate for the corresponding period last year was due to the exceptional equity capital gains that are exempt from income tax, earned by the Bank during the first half of 2007. Excluding the effect of that gain, the effective rate of tax on core banking income was 54%.