The NDB Group’s Profit Attributable to shareholders for the six months ended 30 June 2011 recorded a growth of 37 percent over the corresponding period last year to reach the Rs 1 billion landmark for the period, the bank announced on Monday (15).
The Bank’s Net Income increased by 5 percent over the corresponding period last year. This improvement was supported by the significant growth in loans and advances and deposits by 44 percent and 41 percent respectively over the last twelve months. NDB Bank’s core banking profits (Operating Profit After Provision for Fall in Value of Dealing and Investment Securities less Equity Income) increased by 9.7 percent over the corresponding period last year.
The second quarter performance of the bank was significantly higher than the performance for the first quarter. NDB Bank’s Profit Before Tax for the second quarter was Rs.971 million, a growth of 37 percent over the first quarter of 2011. This has been backed by strong Net Income growth of 16 percent over the same period. The Profit After Tax of the Bank for the second quarter was 31 percent higher than the Profit After Tax for the first quarter of 2011. Profit After Tax of the Bank increased even more significantly by 45 percent over the 12 month period, partly due to the reduced tax rates applicable from 2011, the bank said.
The loans and advances and deposits portfolio grew by 23 percent (Rs 16 billion) and by 14 percent (Rs 8.6 billion) respectively over 31 December 2010. This impressive growth in the Bank’s lending portfolio and the deposit liabilities are well in line with industry growth rates. The Bank’s total assets as at 30 June 2011 increased by 28 percent over 30 June 2010 from Rs 94.9 billion to Rs 121.2 billion.
Despite the significant growth in the Loan portfolio in all the sectors, NDB Bank has been able to contain its Non Performing Loans (NPL) ratio to an all time low of 1.58 percent which is one of the lowest in the industry, due to prudent underwriting policies and well-defined risk acceptance criteria. The Bank has been able to achieve this low level of delinquencies by the use of strong credit analysis techniques and with the use of proactive risk management practices. The provision cover on NPLs was at 73.5 percent as at 30 June 2011 with an Open Loan Position of 2.98 percent, which signify minimum amount of stress on the Bank’s equity, on account of un-provided delinquencies.
The Group’s Tier 1 Capital Adequacy Ratio of 14.53 percent and a Tier 1 & 2 ratio of 16.55 percent are well in excess of the regulatory minimum of 5 percent and 10 percent respectively, providing ample capacity for the rapid expansion planned for the future.
SME’s continues to be the key focus area for NDB Bank. The aim is to develop this sector by educating and enhancing skills and building their competencies thereby preparing them to face the SME opportunities in the country. In line with this, the bank is conducting workshops in different parts of the country in partnership with the International Finance Corporation (IFC). This has enabled the SME portfolio to grow by 66 percent over the past 12 months, the bank said.
Establishing its commitment to rebuilding the conflict affected areas and developing entrepreneurs, the Bank has promoted SME products and services in Batticaloa in partnership with the Batticaloa Chamber of Commerce.
Through Divi Aruna Livelihood Development Loans Scheme which provides entrepreneurs the much-needed capital together with flexible repayment terms at an attractive pricing, the Bank has to date funded sectors such as fisheries, agriculture, dairy, pottery, maldive-fish and other small scale industries in Jaffna, Batticaloa, Ampara, and Chilaw. Recently this scheme was extended to 30 dairy farmers in Wariyapola with the opening of its newest branch.
Branch Expansion continued in the second quarter with the island-wide branch network reaching a significant 52 branches. The newest branches to open were Ja-Ela, Matugama, Matale, Wariyapola, and Ambalangoda.
source - www.island.lk
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