The NDB Group’s profit after tax for the year was Rs. 2.94 billion, an impressive growth of 35% over the previous year. The profit attributable to shareholders for the year was 2.70 billion and compares with Rs. 2.1 billion for 2010, a growth of 29%.
This significant increase in group profits was attributable to the growth in the core banking income of NDB by 13% over the previous year and the improved performance of the fee based group companies.
NDB positions itself as the only financial services group in the country, with subsidiaries and associates in investment banking, stock broking, and wealth management, which make up the capital markets cluster and insurance.
The performance of the capital markets cluster improved significantly due to the increased level of activity, in particular managing complex IPOs, apart from a host of other Investment banking services it offers. Additionally, the investment banking arm in Bangladesh, NDB Capital, has performed well despite the difficult market conditions.
The bank’s net interest income grew by 18% over 2010, supported by a significant growth in loans and advances by 43% and customer deposits by 35%. The growth is commendable, and in relative terms NDB’s performance during the year was higher than its peers.
The bank’s profit after tax, grew by 32% despite the relatively lower equity income during the year compared with 2010.
NDB has been able to contain its Non Performing Loans (NPL) ratio to an all time low of 1.35% which is one of the lowest in the industry. The bank has been able to achieve this low level of delinquencies by the use of strong credit analysis techniques and proactive risk management practices.
The provision cover on NPLs was at 74% as at 31 December 2011 with an open loan position of 2.73%, which signify minimum amount of stress on the bank’s equity, on account of un-provided delinquencies.
NDB is actively engaged in SME banking and has funded agriculture, handicrafts, manufacturing, trading and distribution, fisheries, and dairy sectors to develop the entrepreneurs in the country.
NDB Divi Aruna SME Loan Scheme was extended to most parts of the country in 2011 including the deep south and the east. Facilities were provided to fisheries, agriculture, dairy and other small scale industries. This scheme provides much needed capital with flexible repayment terms at an attractive pricing, with convenient accessibility. NDB also conducted capacity building workshops in identified areas of the country in an effort to enrich the knowledge base of SMEs
NDB is also actively engaged in corporate banking with primary concentration on import, export and infrastructure related businesses. Majority of the corporate banking customers of NDB use the electronic-banking platform to transact their business. Product features and facilities are regularly being added and enhanced to continuously improve accessibility, convenience and security.
In keeping abreast with the growth momentum created as a result of restoration of peace, the project finance division diversified its portfolio into growth sectors such as tourism, healthcare, rubber products, non-conventional renewable energy, construction related sectors and animal husbandry.
The economic revival of the north and the east created unprecedented opportunities for project financing and NDB funded several projects. This also included hotel projects in Pasikudah in the east, including a five-star hotel in 2011.
NDB has also made strong inroads into rural and urban parts of the country. The expansion plan with 13 branches in 2011 increased its foot print covering key geographies in the country. NDB continued to push its national savings drive, taking the core concept of ‘savings’ beyond monetary measures. This savings drive was extended to all part of the country earlier in the year.
NDB launched some of the most innovative products in the year 2011. NDB introduced the breakthrough ‘Rattharan Savings’ product. The pioneering product offers a unique feature in which customers can reserve gold at today’s price and obtain gold for the future by paying in instalments
The bank revolutionised the leasing industry by introducing new benefits to its leasing product, where long traditional requirements of customers, to have guarantors or make a down payment, in order to obtain a lease facility are no longer required.
For the first time in the Sri Lankan banking history NDB introduced a loan approval within three hours for its Dream Maker Personal Loans. NDB also became the first bank in Sri Lanka to introduce secure, online shopping for debit cardholders with the introduction of the ‘Verified by Visa’ facility.
NDB Group has signed an MOU with Singapore’s DBS Bank, to form a strategic alliance in investment banking. Through this MOU, NDB Group and DBS Bank would work on equity and fixed income issuances, syndications, project financing and mergers and acquisitions. DBS Bank is the largest bank in Singapore and a leading financial services group in Asia.
NDB was presented a number of awards in the year including the award for excellence in branding and marketing at the CMO Asia Awards, the Bronze Award for its ‘Ithuru Karana Maga’ at the 2011 Effie Awards.
In addition the bank emerged the proud recipient of an award presented at the prestigious National Business Excellence Awards and won two awards at the Best Corporate Citizens Awards 2011. The bank emerged second Runner Up – under the second main category at the Best Corporate Citizen Award 2011 for CSR and Sustainable Business, and was also recognised for the special CSR project carried out in the north and east, under the category of ‘Best CSR Projects’
NDB was once again positioned in the prestigious Business Today Top Twenty Awards ranking which recognises the cream of Sri Lankan corporates for their exceptional performance throughout the past year.
In keeping with the bank’s commitment to provide high quality banking services, NDB implemented a new core banking IT platform in the last quarter of 2011. The IT platform is expected to significantly improve customer services and offer innovative services.