NDB group posts Rs 2.1 b profit in 2009

The profit attributable to the shareholders of the NDB Group increased by 30 percent over the previous year. The profit before tax and the profit after tax also increased by 37 percent and 24 percent respectively over the last year.

This exceptional performance for the year was mainly due to the significant profits earned from the banking segment of the NDB Group.

The profit before tax and the profit after tax for the NDB Bank increased by 48 percent and 41 percent respectively over the previous year.

The financial conglomerate’s continuous excellent performance further substantiates the stability of the NDB Group in a highly volatile global and local economic environment.

NDB Bank’s core banking revenue (net interest income, fee and forex income) grew by 30 percent over the corresponding period last year.

The Bank’s core banking income includes Rs 733 m of gains from the trading portfolio of government securities for the year as compared with a loss of Rs 1 million for last year.

The NDB Bank’s net interest income (NII) grew significantly by 18 percent over the corresponding period last year.

The lending portfolio declined marginally by 1 percent over the last year end, whilst the customer deposits grew significantly by 57 percent from Rs 31.9 b as at December 31, 2008 to Rs 50.0 b as at December 31, 2009. This exceptional increase in customer deposits over the previous year compares well with the industry growth of 18.5 percent in 2009.

NDB Bank remains the most well-capitalised bank among local banks with a Tier 1 Capital Adequacy Ratio of 14.65 percent and a Tier 1 and 2 ratio of 17.03 percent and is well in excess of the regulatory minimum of 10 percent.

The Bank’s stringent policies in maintaining the quality of its loan book resulted in the ratio of Non Performing Loans (NPLs) to the gross lending portfolio increasing to only 2.58 percent as at 31 December 2009 as compared to 2.30 percent as at December 31, 2008.

NDB Bank’s NPL ratio remains one of the lowest in the local banking industry and compares well with the industry NPL ratio of 8.0 percent as at December 31, 2009.

The Bank adopted effective cost containment methods, which resulted in the overheads increasing only by 9 percent over the last year. The Bank’s cost to income ratio of 39 percent, is one of the lowest amongst local banks and compares well with an industry ratio of 53 percent for 2009.

NDB Bank’s Fitch Credit rating of AA (lka), is amongst the best in the industry and reflects NDB Bank’s strong financial profile in terms of its capital base, profitability and asset quality.

NDB Bank expanded its branch network to Jaffna, Batticaloa, Trincomalee, and Ampara in the third quarter of 2009 and with the opening of Vauniya branch recently, the total branch network increased up to 45.