NDB posts consolidated Group profits of Rs. 7 bn, up by 35%
National Development Bank PLC posted sound all-round performance for 2021, notwithstanding the multiple challenges that marked the year ended December 31, 2021.
Dimantha Seneviratne, Director/ CEO of NDB mentioned that the retrospect of 2021 had many reasons to be grateful for. We managed one of the largest equity infusions in the history of the Bank netting Rs 9.5 billion and boarded the Norwegian Investment Fund for developing countries (Norfund) as our top shareholder with a 9.99% ownership.”
“The sustainable growth trend we have maintained over the years continued, with the Bank achieving triple Rs 500 billion in total assets, gross loans and customer deposits. I am proud of the NDB Team, whose perseverance and relentlessness made another good year possible, whilst as a bank, we are deeply grateful for the unstinted loyalty and confidence of our investors and customers, he commented.
Core income sources of the Bank enhanced during the year compared to 2020, attributable to the timely delivery of the Bank’s strategy milestones. Net interest income enhanced by 22% to Rs. 21.6 billion, despite a marginal decline in interest income, which was off-set by a larger decline in interest expenses. Exports related trade services was a key contributor in this aspect, with digital financial services and other asset products also contributing. Other non-fund based income on an amalgamated basis increased by 11% to Rs 3.8 billion.
The Bank saw a considerable increase in its impairment charges for the year of Rs 10.3 billion, up by 51% compared to similar charges in 2020. The resultant operating profit before taxes was Rs. 10.3 billion an increase of 12%. Total taxes for the period were Rs 3.9 billion with an effective tax rate of 38%. Accordingly, post-tax profitability reached Rs 6.4 billion at a YoY growth of 15%, whilst Profits attributable to shareholders of the Bank reached Rs 6.9 billion, with an YoY growth of 35%.
NDB posts
Business growth retained momentum through concerted efforts in balancing the dual aspects of caution and support to the needy segments of the economy. Accordingly, total assets grew at 12% over 2020 and reached Rs 703 billion, demonstrating promising potential in reaching the Rs 1 Trillion target by 2025, aspired under the Bank’s long-term strategy.
During the year, Gross loans grew by 19% to cross the Rs 500 billion mark to Rs 526 billion, a quantum of Rs 82.6 billion, and a diversified growth stemming from all business segments.
Business growth retained momentum through concerted efforts in balancing the dual aspects of caution and support to the needy segments of the economy. Accordingly, total assets grew at 12% over 2020 and reached Rs 703 billion, demonstrating promising potential in reaching the Rs 1 Trillion target by 2025, aspired under the Bank’s long-term strategy.
During the year, Gross loans grew by 19% to cross the Rs 500 billion mark to Rs 526 billion, a quantum of Rs 82.6 billion, and a diversified growth stemming from all business segments.
Loan book quality denoted by the Non-performing loan (NPL) ratio broadly improved, with the ratio improving to 4.65% from 5.35% in 2020. Net NPL ratio was 2.29% (2020: 3.23%). With regards to funding sources, customer deposits also crossed the LKR 500 Bn mark to reach LKR 552 Bn, enabled by a YoY growth rate of 13% – an equivalent of LKR 62 Bn.
The Bank also raised LKR 8 Bn in Tier II capital in November 2021 by way of listed debentures, with the Issue oversubscribing on the Issue open day in the Colombo Stock Exchange. Return on average equity and Earnings per share were 12.27% and LKR 20.68 respectively, marginally lower than those of 2020 (13.13% and LKR 23.77 respectively).