CDB’s 9month profit up 28% to Rs. 398 m

Continuing its growth momentum into the third quarter of FY2011/12, Citizens Development Business Finance PLC (CDB) said yesterday it has recorded exceptional all-round financial performance.

The nine months profit-after-tax figure of Rs. 398 million as per the interim results released to the Colombo Stock Exchange (CSE) reflects a growth of 28% compared to the corresponding previous period.

The third quarter profit reflects a decline of 25% compared to the corresponding previous quarter. This was mainly due to other incomes recording a mark to market value adjustment of Rs. 114.97 million in the corresponding previous quarter as against the current quarter recording a negative figure of Rs. 15.7 million.

However, the core business profit for the third quarter has recorded a growth of 80%. On the same basis after- tax-profit for the 09 months from the core business reflects a growth of 98%. The top-line grew by 36% during the 09 months period surpassing the Rs. 2 billion mark. Net interest income grew by 52% recording a figure of Rs. 886 million. These strong bottom-line results have been made possible by a steady growth of 45% to Rs. 14.8 billion in the balance sheet from the last audited balance sheet date of 31/03/2011.

Balance sheet growth has been fuelled by a loan book growth of 52%, a deposit portfolio growth of 40% and a debt funding growth of 41%. Capital funds have surpassed the Rs. 2 billion mark, substantially strengthening CDB’s balance sheet and the capital adequacy ratios in Tier 1 and Tier 2 at 16.45% and 16.68% respectively.

Continued improvement in the quality of the loan portfolio has resulted in recording a gross NPL of 2.15% and a net NPL of 0.47% being among the best in the industry.

CDB’s net asset value per ordinary share stood at Rs. 39.68 and earnings per share for the 09 months ending 31 December 2011 recorded a figure of Rs. 8.62.

 “The nine months results have been particularly encouraging and we are confident of concluding FY 2011/12 as yet another year with exceptional performance,”

CDB Managing Director and CEO Mahesh Nanayakkara said. “Our all-round exceptional financial performance amply demonstrates the strength and dynamism of our sustainable growth-enabled business model based on rural lending and urban funding which also enable us to position ourselves as a net lender to the rural economy,” he added.

Elaborating on the business model, he said that it was a business model, proven and tested in good times as well as in challenging times which also provides ample flexibility and space to manoeuvre under volatile market conditions to achieve business growth targets, margins, and bottom-line results.

CDB is in the process of further expanding its 34 online connected multi-layered distribution network across rural and urban sectors and commenced savings account operations in December 2011 under its new core bank solution powered by Polaris and MillenniumIT (MIT). The new core bank solution is expected to go fully live in the first quarter of FY2012/13. CDB also intends to commence an Islamic Finance window under the brand name of “CDB Meezan” within the current quarter. CDB was recently adjudged the winner in the Specialised Banking and Financial Services Sector category at the National Business Excellence Awards 2011 organised by the National Chamber of Commerce of Sri Lanka. CDB also received the Bronze Award in the Finance Company category at the Annual Report Awards 2011 organised by the Institute of Chartered Accountants of Sri Lanka. CDB’s corporate credit rating was recently upgraded to BBB/P2 by RAM Ratings.