NDB Group records Rs 1 b profit in 1 H

The NDB Group’s profit attributable to shareholders for the six months ended June 30, 2011 recorded a significant growth of 37 percent over the corresponding period last year to reach the Rs 1 billion landmark for the period, propelled by NDB Bank’s strong core banking profits and improved performance of the group companies.

Today, with its presence in full-fledged banking, capital markets and insurance, the Group positions itself to be unique, and differentiates itself from its peers as a Financial Services Group.

Since its merger with NDB bank (formerly ABN Amro) NDB has transformed itself to be a fully fledged commercial bank, servicing corporate, SME and Retail clients, throughout the country.

NDB currently has 53 branches in all parts of the country including five in the North and East.

The second quarter performance of the Bank was significantly higher than the performance for the first quarter. NDB Bank’s Profit Before Tax for the second quarter was Rs 971 million, a growth of 37 percent over the first quarter of 2011. This has been backed by strong Net Income growth of 16 percent over the same period.

The profit after tax of the Bank for the second quarter was 31 percent higher than the profit after tax for the first quarter of 2011.

Profit After Tax of the Bank increased even more significantly by 45 percent over the 12 month period, partly due to the reduced tax rates applicable from 2011.

The loans and advances and deposits portfolio grew by 23 percent (Rs 16 billion) and by 14 percent (Rs 8.6 billion) respectively over December 31, 2010. This impressive growth in the Bank’s lending portfolio and the deposit liabilities are well in line with industry growth rates.

The Bank’s total assets as at June 30, 2011 increased by 28 percent over 30 June 2010 from Rs 94.9 billion to Rs 121.2 billion.

Despite the significant growth in the Loan portfolio in all the sectors, NDB Bank has been able to contain its Non Performing Loans (NPL) ratio to an all time low of 1.58 percent which is one of the lowest in the industry, due to prudent underwriting policies and well-defined risk acceptance criteria.

The Bank has been able to achieve this low level of delinquencies by the use of strong credit analysis techniques and with the use of proactive risk management practices.

The provision cover on NPLs was at 73.5 percent as at June 30, 2011 with an Open Loan Position of 2.98 percent, which signify minimum amount of stress on the Bank’s equity, on account of un-provided delinquencies.

The Group’s Tier 1 Capital Adequacy Ratio of 14.53 percent and a Tier 1 and 2 ratio of 16.55 percent are well in excess of the regulatory minimum of 5 percent and 10 percent respectively, providing ample capacity for the rapid expansion planned for the future.