NDB net interest income up 11%

National Development Bank PLC and its Group companies posted a Profit Attributable to Shareholders (PAS) of Rs. 1,083 million for the first six months of 2016.

Despite growth in core banking operations, the PAS was a reduction of 25% in comparison to the corresponding period of 2015.

The gross income of the NDB Group was Rs. 15,506 million, a healthy growth of 23% over the comparative period. The net interest income (NII) was Rs. 4,234 million, an increase of 11%. The net fee and commission income from core banking operations grew by 15% over the comparative period to reach Rs. 1,073 million. The continuous healthy growth in fee income which the Bank has achieved over the past couple of months is a result of the increase in fee generating business volumes. However, the Bank recorded a negative growth in net gains from financial investments due to the upward movement in market interest rates.

Impairment charges for loans and other losses was Rs. 879 million. The total impairment charges included individual impairment charges of Rs. 438 million (which compares with Rs. 350 million for the first quarter of 2016). Impairment charges also include a collective impairment charge of Rs. 423 million, which was primarily due to the growth in the lending portfolio by Rs. 11 billion over the last year end and the provisioning basis adopted by the Bank in line with its impairment policy.

The quality of the Bank’s asset portfolio was affirmed by the non-performing loan ratio of 2.54%.

Operating expenses of the Group grew by 7%.