Connect with us

Business

NDB commences 2021 on positive note. Ups post-tax profitability by 34%

Published

on

National Development Bank PLC, the reigning winner of The Best Bank in Sri Lanka 2021 of Global Finance USA and The Bank of the Year 2020 of The Banker UK, achieved sustained results for the first quarter ended 31 March 2021, amidst challenging conditions.

Commenting on this performance, the Director/ Group Chief Executive Officer of NDB – Dimantha Seneviratne noted that the period was marked by two fundamental changes, one – the prospect of prolonged low interest rates, and the other – greater inclination towards digital engagements from our customers.

NDB strategized in response to these changes well, which ensured continued support to our customers as well as preserved returns to our shareholders. The NDB Group’s new strategic plan, which was launched in October 2020, has placed us on a steadfast growth trajectory amidst the turbulences.

“We carry good momentum to the second half of the year, which seems steeper in terms of challenges, with the outbreak of the third wave of the pandemic in Sri Lanka and worsening situations across Asia, which will have a cascading impact on the local economy. The Bank will fully deploy prudent and timely strategic initiatives in response to the pandemic, the development and impact of which is yet to be fully gauged”, he noted.

The Bank’s total operating income posted a growth of 23% to LKR 8.2 Bn, supported by enhanced net interest income (NII), fee income and other non-fund income bases. Although interest income dipped by 8% due to lower interest rates, this was more than offset by a larger dip in interest expenses of 20% leading to a NII growth of 18% to LKR 5.1 Bn. This also led to a broadly stabilized net interest margin of 3.29% compared to 3.07% of 2020. Driving NIMs was the CASA base of LKR 129 Bn in Q1 2021 growing impressively by 58% over Q1 2020 (quantum of growth – LKR 47 Bn), which also raised the CASA ratio from 20% to 26%. Fee and commission income recorded a healthy growth of 29% to LKR 1.3 Bn due to larger credit volumes across all segments and increased transactions routed through NDB NEOS digital platforms. Net gains and trading also posted a record increase of 116% over Q1 2020 to LKR 460 Mn, reflecting the forex income gained during the quarter.

Impairment charges for loans and other losses for Q1 2021 was LKR 2.2 Bn, an increase of 70% YoY. Provision charges increased in line with the growth in the loan book and provisions made at both collective and individual levels in response to elevated risks caused by the pandemic and other stresses. The regulatory gross non-performing loan [NPL] ratio for Q1 2021 was 5.40% (2020: 5.35%) reflecting the wider industry NPL behavior. The net NPL ratio for the quarter was 2.96% (2020:3.23%). The Bank is cognizant of further potential stresses on asset quality stemming from the third wave of the pandemic, and has strengthened its risk management framework to mitigate and manage the impact.

On total operating expenses, same was LKR 2.5 Bn for Q1 2021, a 4% increase over Q1 2020.

Within this, the Bank continued to manage a reduction in controllable expenses compared to Q1 2020 amidst considerable business growth and various initiatives carried out. The resultant cost to income ratio for the quarter was 30.9% – one of the best in the industry as well as amongst other corporates. This ratio has been on a significant improvement from a high of 49% in 2016, thanks to the increase in banking revenue in line with the Bank’s strategic plans, coupled with conscious and concerted cost management initiatives and productivity enhancement measures, which include digitization and automations.

Accordingly, operating profit before all taxes for the period was LKR 3.5 Bn, an increase of 19%. Total taxes for the period was LKR 1.1 Bn, comprising VAT on financial services and income tax, with income tax rate reducing to 24% from 28%. The resultant effective tax rate for Q1 2021 was 33%.

Post-tax profitability enhanced to LKR 2.3 Bn, with a solid growth of 34% whilst profit attributable to shareholders was LKR 2.4 Bn, up by an impressive 90%, complemented by improved performance of the NDB Group’s capital market cluster, making up the unique financial service powerhouse in Sri Lanka.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

HNB Finance bags 2 CMA Reporting Awards 2025

Published

on

Prof. Ho Yew Kee presents the award, while Rajeeva Bandaranaike hands over the certificate to the HNB Finance team. Featured (right to left): Thushara Jayasekara – Chief Manager / Head of Corporate Planning & Analytics; Randula Munindradasa – Assistant Manager Planning & Analytics; Sandakelum Jayathunga – Senior Manager – Financial Reporting; Maheshika Samarakoon – Manager – Strategy Implementation & Reporting

HNB Finance PLC has been honoured with two prestigious accolades at the CMA Excellence in Integrated Reporting Awards 2025, reaffirming the company’s commitment to transparency, good governance, and integrated business performance.

At this year’s ceremony, HNB Finance PLC was awarded Second Runner Up – joint in the category of “Best Integrated Report , Finance and Leasing Sector”, and also received a Merit Award in recognition of its continued efforts to enhance reporting quality and strengthen stakeholder communication.

The CMA Excellence in Integrated Reporting Awards, organised annually by the Institute of Certified Management Accountants (CMA) of Sri Lanka, acknowledge organisations that demonstrate superior financial reporting standards aligned with global best practices. Winners are assessed on key criteria such as financial performance and strategic management, corporate governance and compliance, innovation and digital transformation, sustainability practices, and professional excellence.

Chaminda Prabhath, Managing Director/CEO of HNB Finance PLC, commented on the recognition, “These awards reaffirm our commitment to upholding the highest standards of integrated reporting and transparent financial disclosure. At HNB Finance, we remain focused on delivering sustainable long-term value through robust governance frameworks, prudent financial management, and continuous innovation. The acknowledgement by CMA Sri Lanka reflects the disciplined efforts of our teams across the organization and motivates us to further enhance our reporting quality, strengthen ESG integration, and reinforce our stakeholder centric approach.”

Continue Reading

Business

ComBank joins ‘Liya Shakthi’ scheme to further empower women-led enterprises

Published

on

Mithila Shyamini, Assistant General Manager – Personal Banking at Commercial Bank and Jude Fernando, Chief Executive Officer of the National Credit Guarantee Institution exchange the agreement in the presence of representatives of the two organisations

The Commercial Bank of Ceylon has reaffirmed its long-standing commitment to advancing women’s empowerment and financial inclusion, by partnering with the National Credit Guarantee Institution Limited (NCGIL) as a Participating Shareholder Institution (PSI) in the newly introduced ‘Liya Shakthi’ credit guarantee scheme, designed to support women-led enterprises across Sri Lanka.

The operational launch of the scheme was marked by the handover of the first loan registration at Commercial Bank’s Head Office recently, symbolising a key step in broadening access to finance for women entrepreneurs.

Representing Commercial Bank at the event were Mithila Shyamini, Assistant General Manager – Personal Banking, Malika De Silva, Senior Manager – Development Credit Department, and Chathura Dilshan, Executive Officer of the Department. The National Credit Guarantee Institution was represented by Jude Fernando, Chief Executive Officer, and Eranjana Chandradasa, Manager-Guarantee Administration.

‘Liya Shakthi’ is a credit guarantee product introduced by the NCGIL to facilitate greater access to financing for women-led Micro, Small, and Medium Enterprises (MSMEs) that possess viable business models and sound repayment capacity but lack adequate collateral to secure traditional bank loans. Through NCGIL’s credit guarantee mechanism, Commercial Bank will be able to extend credit to a wider segment of women entrepreneurs, furthering its mission to drive inclusive economic growth.

Continue Reading

Business

Prima Group Sri Lanka supports national flood relief efforts with over Rs. 300 Mn in dry rations

Published

on

Defence Secretary Air Vice Marshal (Retd) Sampath Thuyacontha receiving the donation from Sajith Gunaratne - General Manager of Ceylon Agro Industries Limited, and Sanjeeva Perera - General Manager of Ceylon Grain Elevators PLC

Prima Group Sri Lanka has pledged assistance valued at over Rs. 300 million, providing essential Prima food products to support communities affected by the recent floods across the island. This relief initiative is being coordinated through the Ministry of Defence to ensure the timely and effective distribution of aid to impacted families.

As part of this commitment, Prima Group Sri Lanka donated a significant stock of Prima dry rations to the Government of Sri Lanka on 30 November. The consignment will be distributed across multiple severely impacted districts. These supplies will support families facing disruptions to daily life, ensuring they receive assistance as recovery efforts continue.

The handover took place at the Ministry, where the donation was received by the Secretary of Defence, Air Vice Marshal (Retired) Sampath Thuyacontha. Representing Prima Group Sri Lanka, Sajith Gunaratne – General Manager of Ceylon Agro Industries Limited, and Sanjeeva Perera – General Manager of Ceylon Grain Elevators PLC, officially presented the donation.

Prima Group has been standing with the people of Sri Lanka for over 40 years, and this donation reflects its broader commitment to the nation during challenging times. As relief operations continue across the island, the company remains focused on helping families rebuild their lives and supporting the ongoing recovery process in collaboration with the Government Authorities.

Continue Reading

Trending