Financial Times

4Q loss causes dip in NDB for the year 2004 net profits
By K. Kenthiran
Losses suffered by National Development Bank in the last quarter caused a dip in the group's net profits for the year ended December 31, 2004. NDB Group reported a net profit of Rs 805 million for the year, or Rs 13.09 per share, 34 percent lower than the Rs 1.2 billion, or Rs 20.90 per share, it earned in the previous year.

The significant declines came in the wake of its banking operation suffering a loss of Rs 40.3 million for the fourth quarter ended December 31, 2004 compared to earnings of Rs 177 million in the same quarter of the previous year.

Revenue for the year was Rs 4.4 billion, down five percent from Rs 4.7 billion in the previous year. However, there was a massive 260 percent increase in group staff retirement benefits along with a 50 percent increase in other operating expenses and tax expenses for the year compared to the previous year, according to the latest unaudited financial statements released by the bank.

According to segment analysis of the latest available financial statements, the equity segment continued making losses as in the previous year. The equity segment incurred a loss of Rs 146 million, far more than double the loss of Rs 61 million recorded in the previous year.

Lending and property development also showed a considerable decline in the segmental result. However, the insurance segment has grown significantly showing a profit of Rs 538 million, more than three times the Rs 180 million profit it contributed in the previous year.

To add to the declining trend, profits from NDB group associate companies also declined significantly, contributing only Rs 31 million compared to Rs 113 million in the previous year. NDB group's shareholders funds as at December 31, 2004 was Rs 8.4 billion, up from Rs 7.9 billion as at December 31, 2003.

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