Sri Lanka’s NDB posts strong performance despite Covid 19 pandemic
Sri Lanka’s National Development Bank (NDB) PLC, which is the country’s fourth largest listed bank, has reportedly said it continued to demonstrate its resilience to external shocks and ability to deliver consistent results in the first half of this year.
According to NDB, the review period was marked by months-long travel restrictions imposed to curb the spread of the third wave of the pandemic in Sri Lanka, which affected business momentum.
NDB Director and Group CEO Dimantha Seneviratne has been quoted in the local media saying that notwithstanding these deepening challenges, the bank stayed in top form in delivering uncompromised value to all its stakeholders, thanks to its agile strategies and committed team.
The banking sector has always played a crucial role in national economic development, and its importance is more pronounced at present and with the nation-wide vaccination programme successfully rolling out there is expectancy of expedited return to economic normalcy, local media reports stated.
In such a backdrop, NDB has affirmed its focus in safeguarding the interest of three critical stakeholders, i.e. the customers, the employees and the society at large, Seneviratne has stated.
This focus has enabled the Bank to maintain a sound equilibrium in its performance, for the benefit of all its stakeholders together with a sense of achievement for the team, he has added.
Income and profitability: NDB recorded a total operating income of Rs. 15.4 b, which grew by 19% over six months ended June 2020 (YoY). Operating income was strengthened by net interest income (NII), net fee and commission income and consolidated other non-fund based income, all of which recorded a growth over the comparative period, according to local media reports.
NII, the majority contributor in operating income (67%), grew by 17% to Rs. 10 b. Reflecting the reduced interest rate environment, both interest income and interest expenses declined YoY with the latter posting a larger decline at 18%, reports further stated.
Deposit portfolio’s improving skew towards CASA base, with over 50% of the fresh deposits growth for H1 2021 over H1 2020 coming from CASA deposits and a significantly improved CASA ratio of 26% (H1 2020: 21%) has contributed to reduce interest expenses. CASA base has also improved by 54% YoY (Rs. 48 b).
OSL take:
The strong performance of Sri Lanka’s NDB is indicative of the strength and growth of the country’s banking sector. Sri Lanka’s economy has shown great resilience to external and internal challenges through the years and is once again on the path to recovery after facing the impact of the global Covid 19 pandemic. The country is also fast becoming a business hub in the South Asian region given its geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. All these have resulted in an expansion in Sri Lanka’s economy and has in turn expanded business/investment opportunities in the country. Given that the country has a strong banking sector, foreign businesses/investors could explore opportunities in Sri Lanka.
| Article Code : | VBS/AT/20210729/Z_1 |