Rajendra Theagarajah

NDB Bank recorded a PAT of Rs. 2 billion for the first half of 2015, which was a 7% Year-on-Year (YoY) growth as compared to June 30, 2014.Total operating income of the Bank grew by 5% compared to H1 2014, to reach Rs. 6,241 million.

Net Interest Income (NII) declined marginally by 3% due to the relatively low credit growth environment which prevailed in the country.  Net fee and commission income which is a primary contributor towards core-banking operations increased by 12% compared to the prior period. The Bank’s Other operating income also increased by Rs. 602 million, to reach Rs. 1,044 million for the period, which included equity income of Rs. 965 million as compared with Rs. 431 million for the prior period.

At a Group level, total operating income declined marginally by 3% to reach Rs. 6,136 million. The decrease was primarily due to the reduction in Net gains from NDB Group’s total financial investments portfolio. However, NDB Group’s Net fee and commission income recorded a significant growth of 28% over the prior period due to the increased performance of the fee based Group Companies.

The Bank’s Impairment charges for loans and other losses for the first six months of 2015 was Rs. 198 million, compared to Rs. 222 million of 2014, a reduction of Rs. 24 million which was primarily due to the improved quality of the Bank’s loan portfolio.

Total operating expenses grew by 16%, an increase of Rs. 411 million compared to the prior period. The main cost driver during the period under review was 9 new branches which were added to the Bank’s branch network. At a Group level, the operating expenses of Rs. 3,280 million grew by 18% over the first half of 2014.NDB Group continues to strive in its cost management initiatives, ensuring that the Group maintains an optimum Cost to income ratio which in turn will ensure higher returns to its shareholders.

The Bank’s Balance Sheet recorded moderate growth during the first six months of the year, with Total assets growing at 3%.  Loans and receivables to customers grew at the same pace of 3%, reflecting the slow credit growth experienced across the banking industry. The Non-performing loan ratio (NPL) of the Bank for the six months ended June 30, 2015 was 2.64%, still one of the best NPL ratios in the industry and compares with an industry average of 4.5% (as at April 2015).

Customer deposits recorded a 12% growth compared to the year ended December 31, 2014.The Bank issued and placed listed rated unsecured subordinated redeemable debentures of Rs. 10 billion with a maturity period of 5 years during the second quarter of 2015.

The Bank continues to remain well capitalized with a 10.12% Tier I capital adequacy ratio and a 14.69% Total capital adequacy ratio, well above the minimum statutory requirement.

Earnings per Share (EPS) for the period under review was Rs. 17.54. The share price of the Bank closed at Rs. 260.30 on June 30, 2015, with a resultant PE ratio of 14.84 (times). NDB remains focused in generating the highest returns to its shareholders for their commitment and confidence placed in NDB.

The Chief Executive Officer of NDB, Rajendra Theagarajah, commenting on the six months’ performance reiterated that the Bank is resolute in its strategic growth momentum. NDB has experienced considerable improvement in its share in the market, and will continue to grow its share through competitive and innovative product offerings and excellent customer service.