NDB NIMs above 4% for 3rd successive quarter
National Development Bank (NDB) kept its Net Interest Margin (NIMs) above 4% for the fourth successive quarter. This was alongside large reductions in the ratio of stage 3 loans in line with broader recovery in the economy.
CEO Kelum Edirisinghe said, “We have been successful NIMs in excess of 4% for the 3rd successive quarter.” The bank has been able to maintain NIMs by aggressively repricing it’s deposit book. Edirisinghe said, “We have been able to protect largely because of repricing the deposit book. We see that coming to an end. We want to broaden our deposit base and that is what will drive our CASA.”
The bank reported a reduction in its stage three loan book to 6.45% at the end of September 2024, down from 8.58% in December 2023. The improved figures come despite a challenging economic environment, demonstrating the bank’s robust internal controls and strategic foresight.
Edirisinghe was speaking on 19 November at the NDB Investor Webinar. He said, “We are committed to deliver sustainable return and increase shareholder value over a period of time.”
Financially, NDB also reported a strong profit before tax of 9.4 billion rupees for the nine-month period ending in September 2024, though marginally lower compared tohe same period last year. This was supported by a consistent Net Interest Margin (NIM) which remained above 4.20% for the third consecutive quarter, underscoring the bank’s ability to manage profitability in a low-interest-rate environment.
Edirisinghe also discussed the future outlook, emphasizing continued efforts to decrease non-performing loans and improve overall asset quality. “If you consider the stage three loan book, which we are actively working to reduce, any reduction in these non-performing loans either by shifting them back to the performing category or by resolving them completely, should positively impact our Net Interest Margins (NIMs). However, overall, I expect that our current NIMs will likely remain at this level or may slightly decline due to the prevailing low-interest rate environment.” TP
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