National Development Bank PLC had posted a Profit After Tax (PAT) of Rs.1,558 million during the first quarter of 2015, a 30% growth compared to the first quarter of 2014.
Accordingly, the Bank’s Total Operating Income before impairment charges for loans and other losses and operating expenses grew by 18% year-on-year (YoY) to Rs.3,631 million in the first quarter of 2015.
The Bank’s net gains from its total investment portfolio declined by 49%, a rupee equivalent of Rs.284 million as compared to the prior year, primarily due to the higher marked to market profit realized from the portfolio in the first quarter of 2014.
Other Operating Income increased by Rs.673 million over the prior period, which was predominantly due to the increased Group dividends of Rs.569 million received during the period. However, at a Group level, Total Operating Income recorded a marginal decline of 3% which was due to the reduction in net gains from the Group’s total investment portfolio.
Impairment charges for loans and other losses was a release of Rs.64 million for the current quarter as compared to a charge of Rs.28 million for the corresponding quarter of 2014. This was a direct outcome of the improved asset quality of the Bank despite a static loans and advances portfolio, compared to the prior year.
The resultant Non Performing Loan (NPL) ratio of the Bank was 2.49% and compares with an NPL ratio of 2.51% at the end of 2014. This is one of the lowest NPL ratios of the industry and reflects the soundrisk management practices embedded within the Bank’s loan origination, disbursement, recovery and monitoring processes.
The NDB Group strengthened its strategic cost management initiatives during the first quarter of 2015 as cost optimization remains a key strategic priority of the Bank. The NDB Group recorded only a 9% increase in its Total Operating Expenses, whilst expanding its network by three new branches. The Cost to Income Ratio (CIR) was 39% for the quarter and is one of the lowest CIRs in the industry.
The total capital base of the Bank as at 31 March 2015 was Rs.29,406 million, whilst the same at the Group level was Rs.36,648 million. Core capital and Total capital adequacy ratios of the Bank were 10.11% and 14.86%, whilst the same ratios for the Group were 12.70% and 17.56%. The capital adequacy ratios of the Bank and the Group have always remained well above the minimum regulatory requirements and the capital base has amply facilitated the ambitious growth of the Bank and the Group.