NDB Group continues growth momentum

National Development Bank PLC and its Group of companies (together referred to as the Group) ended the first nine months of 2015 continuing the growth momentum it has demonstrated in the recent past.

The Bank's post-tax profit was Rs. 2.7 billion, while the Group profit attributable to shareholders (PAS) stood at Rs. 2.3 billion. The Bank has demonstrated resilience to the less than favourable industry conditions and maintained the planned strategic growth momentum for the year 2015.

Group net interest income (NII) was Rs. 5.7 billion, with a marginal reduction of 4% over the comparative period ended September 30, 2014. Considering the continuation of the low market interest rate levels, the Group has managed its NII levels well.

Profitability was strengthened by improved net fee and commission income, net gains from trading, and other operating income. The Bank's net fee and commission income stood at Rs. 1.5 billion at the end of 3Q, 2015, an increase of 10% over the comparative period.

Increased volumes in the primary business of lending, card transactions and international operations were the key contributors towards the enhanced net fee and commission income of the Bank. Net fee and commission income of the Group increased to Rs. 2.2 billion, by a significant 23% growth over the comparative period, benefiting from the Group's wide array of expert capital market services.

Net gains from trading which includes foreign exchange income increased by 19% to reach Rs. 831 million. Group other operating income of Rs. 555 million recorded a marked increase of over Rs. 400 million over the comparative period. However, net gains on financial investments of Rs. 308 million reduced by over 70% over the comparative period, primarily due to the high marked to market gains earned during the previous period.

Impairment charges for loans and other losses of the NDB Group increased to Rs. 545 million as compared with Rs. 306 million for the comparative period. Collective impairment for the period under review was a charge of Rs. 138 million as opposed to a release of Rs. 13 million in the comparative period. The increase was primarily due to the increase in the collective impairment provision which resulted from the portfolio growth of the Bank by Rs. 17 billion.

Total operating expenses of the Group increased by 17% from Rs. 4.3 billion to Rs. 5.0 billion.