“The Central Bank of Sri Lanka’s timely policy rate relaxation together with the DDO finalisation has enabled the moderation of historically high interest rates and we are passing on this benefit to our customers, which will stimulate economic activity,” he added.
For 1Q23, the banking group reported earnings of Rs.3.85 per share or Rs.1.5 billion, compared to earnings of Rs.3.12 per share or Rs.1.18 billion reported for the same period, last year.
For the first half of 2023, the banking group reported earnings of Rs.5.99 per share or Rs.2.39 billion, compared to earnings of Rs.4.54 per share or Rs.1.7 billion reported for the corresponding period of the previous year.
The banking group reported a net interest income of Rs.6.6 billion in 1Q23, against Rs.8.8 billion a year ago. The net interest margin for the first half was 3.7 percent.
The net fee and commission income for the quarter under review was Rs.2 billion, compared to Rs.1.5 billion a year ago.
The banking group booked a Rs.1.1 billion trading gain for the quarter, compared to a loss of Rs.286.6 billion a year ago.
The total operating income for the quarter was Rs.9.6 billion, down from Rs.12.7 billion a year ago.
The impairment charges for the period came down to Rs.3 billion, from Rs.7.5 billion a year ago.
As a result, the net operating income improved to Rs.6.5 billion, against Rs.5.19 billion a year ago.
NDB said it continues to maintain provisions on investments in foreign currency bonds, for the expected International Sovereign Bond (ISB) restructuring to be announced by the government.
The total operating expenses for the period rose to Rs.3.7 billion, from Rs.3.3 billion.
NDB saw a 16 percent decline in its loan book during the first half of 2023 form the end of 2023 to Rs.469.6 billion.
The bank’s impaired loans (Stage 3) ratio was 9.21 percent as at June 30, 2023, compared to 6.24 percent by end-2022, indicating a deterioration in the asset quality.
The bank’s deposit base also came down 7 percent to Rs.627.8 billion. NDB said the reduction in deposits was mainly due to the effect of the appreciation of the rupee on the foreign currency-denominated deposit book.
The total assets of the banking group slipped 5 percent from six months ago to Rs.799.7 billion, which the bank attributed to the “deflation of the foreign currency-denominated asset book”.
As at end-June 2023, NDB’s liquidity and capital positions remained above the regulatory stipulated minimum levels.
The Employees’ Provident Fund has a 9.5 percent stake in NDB, as its second single largest shareholder.
National Development Bank PLC (NDB) reported higher earnings for the quarter ended on June 30, 2023 (2Q23) and first half, as the bank was able to reduce the impairment provisions significantly from last year, which were made on the bank’s foreign currency investments.
