Improved net fee income, net gains from trading boost NDB Group 9-month profits

13 November 2015 06:30 pm - 0     - {{hitsCtrl.values.hits}}

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National Development Bank PLC and its Group companies ended the first nine months of 2015 with resilience and strength, continuing the growth momentum it has demonstrated in the recent past. 

The Bank’s post-tax profit for the period under review was Rs. 2.7 billion, whilst the Group profit attributable to shareholders (PAS) stood at Rs. 2.3 billion. 

Group net interest income (NII) was Rs 5.7 billion, with a marginal reduction of 4 percent over the comparative period ended 30 September 2014. Considering the continuation of the low market interest rate levels, the Group has well managed its NII levels.

Profitability was strengthened by improved net fee and commission income, net gains from trading, and other operating income. The Bank’s net fee and commission income stood at Rs. 1.5 billion at the end of Q3 2015, an increase of 10 percent over the comparative period. Increased volumes in the primary business of lending, card transactions and international operations were the key contributors towards the enhanced net fee and commission income of the Bank. Net fee and commission income of the Group increased to Rs. 2.2 billion, by a significant 23 percent growth over the comparative period, benefiting from the Group’s wide array of expert capital market services.  

Net gains from trading which includes foreign exchange income increased by 19 percent to reach Rs. 831 million. Group other operating income of Rs. 555 million recorded a marked increase of over Rs. 400 mn over the comparative period. However, net gains on financial investments of Rs. 308 million reduced by over 70 percent over the comparative period, primarily due to the high marked to market gains earned during the prior period.

Total operating expenses of the Group increased by 17 percent from Rs. 4.3 billion to Rs. 5.0 billion. 

The NDB Group’s Balance Sheet expanded by 6 percent during the nine month period to reach Rs. 285 billion in comparison to 31 December 2014.  Within total assets, loans and receivables to customers grew by 10 percent to reach Rs. 192 billion, a considerable growth against the industry climate of slow credit growth. 

The Group remains well capitalized. The Tier I capital adequacy ratio of the Group as at 30 September 2015 was 12.39 percent whilst the Tier I & II ratio was 16.82 percent and compares with regulatory minimum ratio requirements of 5 percent and 10 percent respectively.

The Group Return on Equity (ROE) was 10.55 percent. Basic earnings per share (EPS) closed at Rs. 18.25, whilst the share price at the end of the quarter was Rs. 222.30.

Rajendra Theagarajah, the Chief Executive Officer of NDB emphasized on the NDB Group’s concerted focus on growth and expansion for the remainder of the year, and also for the long run. The Group’s diversified business model, competencies perfected over decades along with the Group’s talent pool qualify the Group to make significant strides in the industry, he said.

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