NDB pre-tax profit for Q1 2019, a 9% growth over Q1 2018
View(s):National Development Bank PLC (NDB) recorded a pre-tax profit of Rs.3 billion for Q1 2019 ended 31 March 2019, a growth of 9 per cent over Q1 2018.
Its post-tax profit at Rs.1.4 billion was however, a 12 per cent decline over Rs.1.6 billion reported for the comparative period, due to higher taxes including the new Debt Repayment Levy and the impact from exchange losses incurred on the revaluation of the foreign currency reserves of the bank, the premier bank said in a media statement.
“The reported results are largely reflective of the subdued macroeconomic and industry conditions experienced during the first quarter of the year,” it said.
Commenting on the quarter’s performance, the Group Chief Executive Officer of NDB Bank, Dimantha Seneviratne noted that the bank saw a moderation in growth having accounted for the prevailing economic conditions and the industry-wide trends in escalating non- performing loans (NPLs). Hence the bank’s growth has been calibrated to match such conditions, and taken a cautious approach with sound risk management and credit underwriting practices, to ensure healthy and sustainable growth.
He said the NDB will focus on considerable internal integration during the year, wherein investments are planned in the core banking system as well as digital banking capabilities. The bank is also evaluating internal processes to introduce business process re-engineering [BPR] solutions to achieve leaner, speedier and more cost effective processes, with the ultimate intentions of achieving cost efficiencies and an enhanced customer experience.
Gross income recorded an 18 per cent growth to Rs.14.1 billion from Rs.11.9 billion in the corresponding quarter.
The high rates offered on deposits, particularly time deposits by both banks and non-banking financial institutions have resulted in higher interest costs. This is however expected to ease out with the measures taken by the Central Bank to introduce a cap on deposit interest rates.
On the funding side, customer deposits reached Rs.351 billion, with a moderated YTD growth of 1 per cent (equivalent to Rs. 3.5 billion) and a year-on-year growth of 24 per cent.
“NDB is on the trajectory to attain the status of a Domestic – Systemically important Bank in Sri Lanka with an asset base of Rs.500 billion, under the midterm strategy – Transformation 2020. There is clear indication that the bank will achieve this goal well before the set timeline of 2020,” the statement said.