SDBL posts impressive results in 3 Q 2011

Sanasa Development Bank Ltd (SDBL) has registered an after tax profit of Rs. 231 million for the third quarter ending September 30, 2011 as against Rs.205 million during the corresponding period in 2010, which is an increase of 13%. The bank’s deposit base has increased to Rs. 14.7 billion from Rs. 12.6 billion in December 2010, a growth of 17% whilst the advances has increased to Rs. 15.2 Billion from Rs. 12.1 Billion recording a growth of 25%. This was revealed by SDBL CEO. General Manager Nimal Mamaduwa.

As the apex financial institution of the SANASA Movement, i.e. the largest cooperative network in Sri Lanka, the bank concentrates on small-ticket micro-financing, leasing, project financing and housing loans for the rural masses, which generally lies beyond the risk appetites of most financial institutions. SDBL focuses mainly on promoting the entrepreneurial initiatives of the rural population, thereby contributing to their economic progress.

Accordingly, the bank’s loan book mainly comprises micro-financing facilities, which constitutes around 65% of its entire portfolio. SDBL predominantly provided credit facilities through its primary societies, which in turn lend to their members. Lending through this channel keeps the bank’s gross NPLs in check as the primary societies conducts close monitoring.

The bank’s gross NPL ratio eased to 5.43% as at September 30,2011 as against 5.84% in December 2010 - better than its LSB peers and at the par with the level of larger LCBs. The net NPL ratio was 3.62% as against 3.73% in 2010. This was mainly due to bank’s good management of its loan portfolio despite its inherently risky target markets. Furthermore, the group-lending approach has assisted the bank to rein in its NPLs against the backdrop of social pressure and stigma associated with loan defaults in rural communities.

The SDBL’s asset base increased to Rs.19.8 billion as at September 30,2011 as against Rs.17.5 billion - an increase of 13%. This had been driven by its expanding loan book and the bank’s rapid expansion of Customer Service Points. During the nine months of 2011 the bank opened six Customer Service Centres in Buttala, Hatharaliyadda, Hingurana, Narammala, Kaduwela and Aluthgama thereby increasing its total Customer Centres to 79.

Two more new Customer Centres will be opened in Maharagama and Gampaha during the last quarter of 2011.

The bank has maintained its Statutory Liquid Asset Ratio (SLAR) well above the regulatory requirement and the Core Capital Adequacy Ratio (Tier I) stands at 13.7% and the total Capital Adequacy Ratio at 14.2% as at September 30 as against the regulatory requirement of 5% and 10% respectively. Samadani Kiriwandeniya has been appointed as the new Chairperson of the bank.