NDB maintains growth momentum in 3Q

• Gives Rs.14.1bn in new loans
• Net interest income up 9% to Rs.4.9bn
• Reports Rs.1.5bn net profit
• Clinch Rs.600bn asset milestone 

National Development Bank PLC (NDB) seized the economic rebound after the end of lockdowns in May as it gave more loans to generate higher interest and fee incomes in the three months to September (3Q20), enabling the bank to blunt the impact stemming from the narrow margins in a low interest rate environment. The bank gave Rs.14.1 billion in new loans during the July-September period, significantly higher than the Rs.4.1 billion it gave in the April-June quarter, and close to Rs.15.5 billion in the pre-pandemic quarter ended in March. The bank increased its net interest income by 9 percent year-on-year (YoY) to Rs.4.9 billion while the net fee and commission income rose by 24 percent YoY to Rs.1.54 billion. 

 The performance in the bank reflects that it was well poised to ride the growth in credit driven by the economic revival after the first wave of the pandemic till end of September. NDB has remained hungry for growth particularly during the last four years. Hence its lending growth outperforming the rest comes as no surprise.  

The bank, which clinched its Rs.600 billion asset milestone in the September quarter raised Rs.6.5 billion via a debenture issue in September and announced a rights issue in October to raise Rs.8.0 billion to bolster its capital buffers, which provide the lender with more wiggle room to go on its expansion drive. 

The bank’s provisions for possible loan losses rose by about Rs.600 million to Rs.1.6 billion in the September quarter, largely driven by provisions made for large individual clients. The bank’s gross non-performing loan ratio edged up to 5.57 percent from 5.40 percent in June, but remains elevated from 4.77 percent at the end of 2019. 

As the September earnings season is in full swing, none of the banks reported significant deterioration in their asset quality as predicted by rating agencies and other experts who expected calamity when the moratoria ended. NDB gave moratorium on 30 percent of its loan book and those moratoriums came to an end in August. 

The bank reported earnings of Rs.6.78 a share or Rs.1.5 billion for the July-September quarter compared to Rs.5.17 a share or Rs.1.15 billion in the comparable period last year. 

The bank grew its deposits by Rs.59.3 billion in the nine months, of which Rs.36.7 billion was materialised during 3Q20.