NDB reports stellar performance for September on new loans, lower provisions

• Records a net interest income of Rs.9.07bn 
• Out of total loans, Rs.29.46bn came in final three months
• Stage 3 loans stood at 4.45%, compared to 5.18% at beginning of year
• NDB Director/CEO says one of key performance highlights is growth of small and medium scale enterprise loan book

Board of Directors Chair Sriyan Cooray

Director and CEO Kelum Edirisinghe

Amid a deluge of earnings this week, National Development Bank PLC (NDB) reported a solid financial performance for the September quarter, driven by new loans, higher fee incomes and lower impairment provisions.

The bank recorded a net interest income of Rs.9.07 billion for the three months, up 13.8 percent from the same period last year, while the fee incomes rose by an even higher 24.3 percent to Rs.2.77 billion.

This was predominantly supported by new lending, which grew by a substantial Rs.127.16 billion in the nine months through September, translating into a 24.9 percent increase. Of this, Rs.29.46 billion came in the final three months, reflecting some moderation in growth.

Despite the sharp rise in new loans, the bank provided only Rs.1.41 billion for possible bad loans, down markedly from Rs.2.65 billion in the same period last year, as it remained confident in the quality of both new and existing loans.

The bank’s net interest margin, the spread between what it charges on loans and pays on deposits, narrowed to 4.08 percent, from 4.34 percent at the start of the year. This trend is typical as the lending rates adjust to declining market interest rates.

The Stage 3 loans ratio, which measures the quality of the loan portfolio, stood at 4.45 percent, compared to 5.18 percent at the beginning of the year. A lower ratio suggests higher asset quality.

Commenting on the performance, NDB Director and Chief Executive Officer Kelum Edirisinghe said that amongst others, one of the key performance highlights is the growth of the small and medium scale enterprise loan book, which expanded by over 24.0 percent on a year-to-date basis.

“Looking ahead, we remain focused on further sharpening our strategic direction, with significant groundwork underway. A broad strategic realignment is taking shape across the bank, positioning us for sustainable growth and value creation for the benefit of our shareholders and other stakeholders in the years ahead,” he said.

The bank attributed its net fee income performance to targeted efforts made to strengthen the non-fund sources of income, thereby enhancing the resilience of the bank’s overall income composition.

The banks’ numerous and often opaque fee incomes have recently drawn the attention of the Central Bank, which has called for greater transparency and justification.

NDB reported earnings of Rs.8.49 a share or Rs.3.62 billion for the July-September quarter, compared to Rs.3.48 a share or Rs.1.47 billion in the same period last year, a 145.6 percent increase.

The Employees’ Provident Fund held a 9.46 percent stake in the bank as of September 30, 2025, making it the lender’s second-largest shareholder.