NDB March net profit up on higher margins; loan growth moderates
National Development Bank PLC (NDB) reported higher profits for the January – March quarter (1Q18) as the bank was seen pricing its loans higher as the loan book growth moderated amid general slowdown in private sector credit.
The bank also made higher provisions against possible bad loans with asset quality taking a slightly negative turn.
According to the interim results filed with the Colombo Stock Exchange, NDB group reported earnings of Rs.6.49 a share or Rs.1.15 billion total earnings for the quarter, up 56 percent from a year ago.
The net interest income rose by 42 percent year-on-year (YOY) to Rs.3.43 billion as the net interest margin rose by 49 basis points to 3.49 percent during the three months.
The bank appears to have mostly priced its existing loans higher as the new loan growth moderated to Rs.8.8 billion during the quarter.
The bank has a total asset base of Rs.396 billion.
NDB Director/ceo Dimantha Seneviratne in an exclusive interview with Mirror Business a few months back said NDB aims to become a systematicallyimportant private bank with over Rs.500 billion assets by 2020.
Meanwhile, the bank’s deposits rose by Rs.10.8 billion to Rs. 284.2 billion.
NDB remains thirsty for fresh capital to maintain its ambitious growth in the loan book as the bank’s capital ratios are nearing regulatory minimums.
By the end of March, the bank’s BASEL III compliant tier I capital ratio stood at 8.73 percent whereas the regulatory minimum is 7.875 percent.
Meanwhile the tier II ratio stood at 13.35 percent against the regulatory minimum of 11.875 percent.