SANASA Development Bank Ltd (SDBL) has performed well in 3rd quarter ending 30.09.2010, recording a pre-tax profit of Rs.457 million compared to Rs.281 million for the corresponding period in 2009, a growth of 63%. Post-tax profit for the 3rd quarter had been Rs.205 million as against Rs.136 million in 2009, a growth of 63%.
Meanwhile, Fitch Ratings Lanka had upgraded SDBL's National Long-term rating to "BB+ (lka)" from "BB (lka)", the Outlook is Stable, said Nimal Mamaduwa, General Manager/CEO of SDBL in a press release.The Fitch upgrade reflects SDBL's improving capitalization and sound financial profile relative to peers'. Significant equity infusions (cumulative LKR 1.3 bn) over 2007-2009 have made SDBL a well capitalized bank, with a larger equity cushion to absorb potential losses on bad loans.
The bank's profitability ratios continued to be above peers' due to its exposure to micro-finance (MFI) type clientele and pawning. In addition, its asset quality has historically been above or on par with the banking sector. SDBL's asset quality is on par with larger licensed commercial banks, mostly in the "AA (lka)"- rated category.
Commenting further on the financial profile as at 30.09.2010, Mamaduwa further stated that the net income has shown a growth of 59%, to 1.265 billion from 794 million.
The deposit base has recorded a growth of 15% - from Rs. 10.8 billion to Rs. 12.5 billion, driven by the expansion of bank's network having 69 Customer Service Centres as at 30.09.2010.
The loan portfolio of the bank has shown an increase of 19%, to Rs. 12.8 billion. The bank's gross NPL ratio has consistently been better than industry average, although the SDBL's target market consist of low income, high-risk segment of the economy, it has been able to mitigate defaults through effective risk management procedures.
SDBL's gross NPL ratio stands at 6.24% as against 6.63% as at 31.12.2009, whilst the net NPL ratio stands at 3.39% as against 4.77 % in December 2009. As at 30.09.2009, SDBL's Tier I core capital adequacy ratio stands at 12.11% and the total capital adequacy ratio stands at 12.72% as against the regulatory requirement of 5% and 10% respectively.