NDB March net up 102%

 Sri Lanka's National Development Bank group's net profit for the first quarter doubled to 605 million rupees from a year ago. 

Lending and deposit grew although there were bad loans.

Interest income fell two percent to 2.5 billion rupees while interest expenses fell four percent to 1.4 billion rupees enabling net interest income to rise one percent to just over a billion rupees, a stock exchange filing said.

The core banking income of NDB Bank increased by 15 percent in March 2011 from the previous year while profit after tax "increased even more significantly by 65 percent, partly due to the reduced tax rates applicable from 2011," the bank said.

The stock exchange filing said NDB Bank's non-interest income rose 20 percent to 659 million rupees in the quarter from the previous year.

Total performing loans grew nine percent to 77.6 billion rupees as at March 31, 2011 from the beginning of the year while total deposits grew two percent to 60.5 billion rupees.

"The bank’s balance sheet as at 31 March 2011 grew by 17 percent over 31 March 2010 from 94.6 billion rupees to 110.3 billion rupees," a bank statement said. "This was mainly due to the significant growth in the bank’s gross lending portfolio by 20.1 billion rupees or 35 percent over the past twelve months."

Despite the significant growth in the loan portfolio in all the sectors, NDB Bank said it has been able to contain its Non Performing Loans ratio to an all-time low of 1.8 percent which is one of the lowest in the industry.

This was "due to prudent underwriting policies and well-defined risk acceptance criteria," the statement said.

"The bank has been able to achieve this low level of delinquencies by analysing the customers’ cash flows and matching their repayments to their business income cycles."

NDB Bank also said that in addition to the traditional forms of lending to the SMEs, the bank also intermediated in facilitating links between the small time producers with the large scale distributors and vice versa.

"NDB Bank has also taken the far sighted initiative of pursuing a customer centric cash flow based lending approach as opposed to the traditional collateral based lending," the statement said.