Sri Lanka's NDB March quarter net profit down 13-pct
May 15, 2019 12:39 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Profits at Sri Lanka’s National Development Bank (NDB) fell 13 percent to just over a billion rupees in the March 2019 quarter from a year earlier, as growth slowed amid rising bad loans and taxes, interim accounts showed.
The group reported earnings of 4.54 rupees per share for the quarter, down 30 percent. The share was trading at 86.70 rupees Wednesday, down 1.9 percent.
Interest income grew 29 percent to 12.8 billion rupees in the March 2019 quarter from a year earlier and expense grew at a slower 24 percent to 8.1 billion rupees with net interest income up 38 percent to 4.7 billion rupees.
The bank’s Net Interest Margin (NIM) was 3.41 percent, compared to 3.49 percent a year ago.
Loans grew two percent to 351 billion rupees or by 6.7 billion rupees from the year before.
An NDB statement said its gross non-performing loan (NPL) ratio was 3.37 percent in the March 2019 quarter, up 52 basis points from 2.85 percent at end-2018.
“This increase is a reflection of the wider trend in industry NPLs, as a result of the challenging conditions experienced in the country.”
Growth in customer deposits was almost stagnant from end-2018, up by just one percent to 351 billion rupees, or by 3.5 billion rupees but up 24 percent from a year ago
NBD group chief executive Dimantha Seneviratne said the bank saw a moderation in growth having accounted for the prevailing economic conditions and the industrywide trends in escalating NPLs.
“The bank’s growth has been calibrated to match such conditions, and it has taken a cautious approach with sound risk management and credit underwriting practices, to ensure healthy and sustainable growth.”
The NDB statement said the fall in profits was owing to higher taxes including the new Debt Repayment Levy and the impact from exchange losses incurred on the revaluation of the foreign currency reserves of the bank.
It said other operating income was contained to 44 million rupees in the March 2019 quarter, given the exchange losses incurred on the revaluation of the foreign currency reserves of the bank, due to the appreciation of the Sri Lankan rupee in the first quarter of 2019.
Net fee and commission income grew by 22 percent to 864 million rupees from a year ago owing to the expansion of fee generating business activities and volume growths.
Impairment charges for loans and other losses rose to 842 million rupees in the quarter ended 31 March 2019 from 800 million rupees the year before.
(COLOMBO, 15 May 2019)