NDB reports highest-ever Group PBT, surpassing Rs. 24.0bn

National Development Bank PLC (NDB) yesterday announced a record-breaking profit for the financial year 2024, marking a significant milestone in the bank’s growth trajectory. 

All key performance indicators (KPIs) and shareholder metrics showed substantial improvements, reflecting the bank’s resilience and commitment to delivering value. 

“For the period under review the Bank reported a pre-tax profit of Rs. 24.3 billion up 141 percent over 2023 inclusive of the one-off gain of Rs. 12.8 billion stemming from the ISB restructure. Excluding this gain, our pre-tax profit from the underlying business grew 31 percent year-on-year,” said NDB Director/ Chief Executive Officer Kelum Edirisinghe.

NDB recorded a post-tax profit of Rs. 9.0 billion for the financial year ended 31 December 2024, a 68 percent increase over the prior year 2023 (YoY). Group profit attributable to shareholders was Rs. 9.8 billion, again an impressive growth of 70 percent YoY. Profit before tax at Bank and Group level were Rs. 24.3 billion and Rs. 25.7 billion respectively, making them the highest-ever profitability figures the Bank and the Group have posted in its 45 years plus history. 

The bank’s core business activities saw improved performance, with notable increases in net interest income and fee and commission income. Net interest income (NII), which comprises 75 percent of the bank’s total operating income grew by 7 percent YoY to Rs. 34.2 billion, a commendable performance in a low interest rate environment, and in a year in which loan book growth was moderate. NDB’s prudent assets and liability management and timely pricing of the book resulted in Net Interest Margin (NIM) settling at a 4.34 percent. 

Net fee and commission income, another integral component within the bank’s total revenue increased by 9 percent YoY to Rs. 7.8 billion. Though moderate, the gradual increase in loan volumes, trade financing operations and digital banking transactions together with concerted transactions drive under the strategy drove fee income up. Total other non-fund based income netted Rs. 3.5 billion, with a resultant total operating income of Rs. 45.5 billion. 

The impact of the debt restructuring, comprising the Day 01 loss and hair-cut loss, was Rs. 14.3 billion. The bank posted a net impairment reversal of Rs. 10.0 billion comprising an impairment charge on the loan book and aforementioned impairment reversal on the investment portfolio. 

Loan portfolio quality improvement, another element of the strategy made considerable advancements during the year. The impairment charge on the loan book in 2024 was down by Rs. 2.7 billion (17 percent) compared to 2023. 
Resultantly, Impaired Loans (Stage 3) to Total Loans Ratio improved by 340 bps to 5.18 percent whilst Impairment (Stage 3) to Stage 3 loans Ratio increased by 13.37 percentage points to 54.48 percent over the end 2023 position, continuing the progress maintained since 3Q 2023. Equal focus on cost management continued through the year. Total operating costs for the year was Rs. 16.8 billion, a YoY increase of 23 percent with a cost to income ratio of 36.9 percent. 

Balance Sheet performance moderated through 2024, a result of the conscious strategic approach taken in the evolving economic dynamics. Accordingly, total assets growth was marginal at 2 percent, closing in at Rs. 796 billion. 

Gross loans and deposits growth was 3 percent reaching Rs. 510 billion and Rs. 632 billion respectively, inclusive of a negative impact stemming from movement in the exchange rate.  Balance sheet funding remained healthy, leading to further optimisation of cost of capital. 

The CASA ratio increased to 25.0 percent by 2 percentage points compared to 2023, tapping in to the upside potential NDB possesses in increasing its CASA ratio towards industry average. Total equity also enhanced by 11 percent to Rs. 77.7 billion.

Additionally, NDB raised a total of Rs. 10.0 billion in Basel III compliant Tier II capital via two tranches of Rs. 5.0 billion each during the year. Enhancements in capital was reflected in the regulatory capital ratios of Tier I and Total Capital Adequacy which stood at 13.68 percent and 19.09 percent, 518bps and 659 bps above the minimum requirement respectively.  

Regulatory Liquidity Coverage Ratio (Rupee), Liquidity Coverage Ratio (All Currency) and Net Stable Funding Ratio stood well above the regulatory minimum requirement of 100 percent at 358.12 percent, 308.26 percent and 152.43 percent respectively. 

Investor KPIs reported record highs in 2024. Return on Average Equity was 12.22 percent up from 8.03 percent in 2023. Earnings per share reached Rs. 21.73 from Rs. 12.92 in 2023. Respective ratio at the Group level was 12.46 percent and Rs. 23.57. 

Bank Pre-tax Return on Average Assets was 3.09 percent an, exceptional improvement from the 1.25 percent of the prior year. Net Asset Value per Share was Rs. 186.91 and compared with a closing share price of Rs. 113.25. The comparatives of these indicators in 2023 were   Rs. 175.60 and Rs. 64.90 respectively. Group Net Asset Value per share was Rs. 199.13 (2023: Rs. 186.43).