NDB posts PTP of Rs. 2.7 bn for 1H
National Development Bank PLC (NDB/ the Bank) posted a pre-tax profit of LKR 2.7 billion for H1 2022 for the six months ended June 30 2022.
Although a reduction of 56% over the first half of 2021 (the comparative period), this deceleration in profits was equitable compared to the considerable quantum of impairment charges factored in for the period, and is predominantly attributable to strong revenue generation and expenses management by the Bank amidst external challenges. Taxes netted LKR 973 Mn, with post-tax profits closing in at LKR 1.7 billion.
“Financial performance recorded was moderate yet resilient against a highly challenged socio-economic backdrop that prevailed during the review period. With our strategy recalibrated to match external developments well on track, NDB was able to achieve its core banking revenue targets, “ said, Director/ CEO of NDB Dimantha Seneviratne commented.
The unprecedented depreciation in the exchange rate together with severe macro-stresses that resulted in higher provisions for investments and provisions made on a prudent basis on loans to factor in expected stresses narrowed our profits.”
The Bank recorded healthy core banking performance as reflected in a total operating income of LKR 22.4 Bn, an increase of 46% over the comparative period, bolstered by both fund and non-fund based income. Net interest income, for the period under review was LKR 15.0 Bn up by 45% over the comparative period. Interest income and interest expenses both grew simultaneously at 46% and 47% respectively, due to the increasing market rates for both loans and deposits triggered by an 8.5% increase in the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR)over the first half of 2022.
The resultant net interest margin for the period was 3.77% (2021: 3.25%). On non-fund based income, net fee and commission income improved by 19% to LKR 3.1 Bn, whilst sources of other non-fund based income totaled to LKR 4.3 Bn, predominantly benefitting from the revaluation gains on the Bank’s foreign currency denominated reserves, due to the sharp depreciation of the LKR against the US dollar.
The period under review saw the Bank booking impairment charges of LKR 13.9 Bn, an increase of 235% over the comparative period.
Total operating expenses for the period was LKR 5.8 Bn, an increase of 13% over the comparative period. Total assets closed at LKR 816 Bn at the Bank level and LKR 822 Bn at the Group level, a 16% increase over end 2021 position (YTD growth).