Sri Lanka’s NDB Bank March 2018 quarter profits up 56-pct
ECONOMYNEXT – Profits at Sri Lanka’s NDB Bank grew 56 percent from a year earlier to 1.2 billion rupees in the March 2018 quarter, on improving interest margins and increasing incomes from financial investments and fee and commissions, interim accounts showed.
The bank reported group earnings of 6.49 rupees a share in the quarter. The stock was trading 1 rupee higher at 135 rupees in early trading.
"Net interest income was strengthened by the improvement in net interest margin to 3.5 percent from 3 percent in 2017 and growth in business volumes," NDB Bank told shareholders.
Interest income grew 15 percent to 9.9 billion rupees, interest expenses growing at a slower 5 percent to 6.5 billion rupees resulted in net interest income increasing 42 percent to 3.5 billion rupees, interim financial results filed with the Colombo Stock Exchange showed.
"Growth in the loan book, particularly in leasing and credit cards, and the accelerated penetration of the Bank’s mobile banking app were instrumental in generating enhanced fee based income," the bank told shareholders.
Net fee and commission income grew 30 percent to 927 million rupees.
Gains from financial investments amounted to 423.3 million rupees, against 65 thousand rupees a year earlier.
Loan loss provisioning increased 613 percent to 795 million rupees.
"The increase in the collective impairment charges was primarily due to the portfolio growth and some stresses experienced in the lending portfolio," NDB Bank said.
The bank said it made precautionary provisions for a few selective individually significant facilities on a prudent basis during the quarter.
"The Bank’s prudent risk management strategies and robust recoveries mechanisms are anticipated to reduce the impairment charges during the year," NDB Bank said.
Operating expenses including personnel and depreciation grew 12 percent to 2.1 billion rupees.
NDB Bank’s deposit base grew 4 percent from the previous December 2017 quarter to 283.8 billion rupees in the March 2018 quarter. The bank’s loan book grew 3 percent to 282 billion rupees.
The banking group reported a capital adecuacy ratio of 14.44 percent in the March 2018 quarter, down from 15.18 percent the previous quarter. The minimum regulatory requirement is 11.875 percent. (COLOMBO, 11 May 2018)
Updated to reflect group-level results