NDB Bank 1Q25 profit climbs on reduced impairments, loan growth

Chairman Sriyan Cooray

CEO/Director  Kelum Edirisinghe

National Development Bank PLC (NDB) reported a 168 percent year-on-year (YoY) jump in the first quarter net profit to Rs.1.9 billion, supported by lower impairment charges and steady growth in core banking operations.

Total operating income rose 5 percent to Rs.10.6 billion, though net interest income slipped one percent to Rs.8.0 billion, due to a 270-basis-point drop in market interest rates. Net interest margin stood at 3.92 percent.

Net fee and commission income edged down 2 percent to Rs.1.8 billion, as card-related revenues softened, while income from digital and operational services increased. Other income surged to Rs.842.4 million, bolstering the topline growth.

Impairment charges fell 40 percent YoY to Rs.2.6 billion, aided by a Rs.457.5 million reversal linked to debt restructuring. Loan-related impairment dropped 22 percent. Stage 3 impaired loans rose to 5.53 percent of total loans (2024: 5.18 percent), while the Stage 3 coverage stood at 53.26 percent (2024: 54.48 percent).

Operating expenses climbed 13 percent to Rs.4.4 billion, mainly due to higher premises and other overheads. Pre-tax profit more than doubled to Rs.4.0 billion, while total taxes reached Rs.2.1 billion.

The balance sheet expanded 7 percent year-to-date to Rs.852.4 billion, marking the strongest growth in recent quarters. Gross loans rose 5 percent to Rs.535.2 billion, with Rs.16.9 billion from local currency lending. Deposits grew 2 percent to Rs.642.3 billion, with local currency deposits up Rs.9.1 billion. The CASA ratio improved to 25.82 percent, from 24.91 percent, with the CASA balances rising Rs.8.5 billion.

Capital and liquidity remained strong, with Tier I and total capital adequacy at 12.16 percent and 16.95 percent, comfortably above the regulatory minimums. The liquidity coverage and stable funding ratios also exceeded the 100 percent thresholds.

Return on average equity fell to 10.03 percent (2024: 12.22 percent) and EPS to Rs.18.18 (2024: Rs.21.73). Group ROE was 10.19 percent and EPS Rs.19.70. The net asset value per share declined to Rs.180.29 (2024: Rs.186.91), with the share closing at Rs.107.00. the group NAV per share was Rs.192.53.