NDB reports strong performance in 2Q

The NDB and its Group of companies reported a strong performance with profit attributable to shareholders crossing the Rs. 2 billion mark for the six months ended June 30, 2014, affirming the strong strategic focus maintained by the Group in generating and delivering long-term value to shareholders.

The Chief Executive Officer of the Bank, Rajendra Theagarajah, said that the Group is guided by a unique strategy which ensures that the Group thrives in a highly challenging and fast changing industry climate . He said that the results are a testimony to an year of enhanced performance, which the Group promised to shareholders, with the release of 1Q results in May 2014.

The Group Profit Before Income Tax recorded a 42% year-on-year growth to reach Rs. 2.9 billion for the first half of 2014, while the Group Profit After Tax recorded an increase of 57% to reach Rs. 2.1 billion.

This strong growth was a result of enhanced performance across all products and services with prudent and efficient cost management across the entire Group. The Group's Total Operating Income of Rs. 6.3 billion recorded a 17% growth on a year-on-year basis, with three constituents of operating income, Net Interest Income (NII), Net Fee and Commission Income and Net Gains from Trading recording a year-on-year increase of 16%, 15% and 38%. The increase in NII amidst a reducing interest rate environment affirms the structural robustness of the Group's balance sheet in sourcing and using funds effectively.

The Bank's impairment charges for loans and other losses of Rs. 222 million increased by 49% over the corresponding period, and were primarily due to the increase in impairment provision on an individual basis; resulting from the Bank's prudent adoption of fair valuing of its impaired loans, based on sound judgment and objective evidence of future recoveries.

The Bank's operating expenses recorded a modest 9% increase over the corresponding period, and the cost to income ratio recorded a low of 42.6%, well below the budgeted levels, affirming the Bank's sustained focus on strategic cost management.

The asset base of the Group increased by 16% compared to end December 2013 and stood at Rs. 239 billion, maintaining its growth momentum ahead of industry growth levels.