NDB tops Rs 2 b in Profit After Tax in 1H, 2015

The banking industry remains challenging with credit growth slower than anticipated and severe competition posed by a large number of banking and non-banking institutions. The macro-economic outlook also carries uncertainty with the parliamentary elections. Despite such factors, National Development Bank PLC (NDB) is well focused on its strategy to achieve targets and generating sustainable returns to all its stakeholders.

Given below is an analysis of the financial performance of the NDB Bank and Group for the first half of 2015, amidst such a macro-economic backdrop. The Bank recorded PAT of Rs. 2 billion for the first half of 2015, which was a 7% year-on-year (YoY) growth compared to June 30, 2014. Total operating income of the Bank grew by 5% compared to 1H, 2014, to reach Rs. 6,241 million.

Net Interest Income (NII) declined marginally by 3% due to the relatively low credit growth environment which prevailed in the country. Net fee and commission income which is a primary contributor towards core-banking operations increased by 12% compared to the previous period.

The Bank's other operating income also increased by Rs. 602 million, to reach Rs. 1,044 million, which included equity income of Rs. 965 million as compared with Rs. 431 million for the previous period.

At Group level, total operating income declined marginally by 3% to reach Rs. 6,136 million. The decrease was primarily due to the reduction in Net gains from NDB Group's total financial investments portfolio. However, NDB Group's Net fee and commission income recorded a significant growth of 28% due to the increased performance of the fee-based Group companies.

The Bank's Impairment charges for loans and other losses for the first six months of 2015 was Rs. 198 million, compared to Rs. 222 million in 2014, a reduction of Rs.24 million which was primarily due to the improved quality of the Bank's loan portfolio.

Chief Executive Officer, NDB, Rajendra Theagarajah said the Bank is resolute in its strategic growth momentum. NDB has experienced considerable improvement of its share in the market and will continue to grow its share through competitive and innovative product offerings and excellent customer service.