NDB posts strong second quarter results

The profit attributable to shareholders of the NDB Group increased significantly by 38% over the first half of 2008. The profit after tax and the profit before tax has also increased significantly by 37% and 27% respectively over the corresponding period last year.

This impressive performance for the first six months is mainly due to the significant profits earned from the banking segment of the NDB Group. NDB Bank’s profit before tax and the profit after tax increased by 46% and 42% respectively over the figures for the corresponding period in 2008.

NDB Bank’s core banking revenue (net interest income and other income) grew by 39% over the corresponding period last year. The bank’s core banking income includes Rs 607 mn of gains from the trading portfolio of government securities for the period as compared with Rs 52 mn for the corresponding period last year.

The Bank’s core banking revenue excluding the capital gains from government securities increased by 14% over the first six months of 2008.  NDB Bank’s Net Interest Income grew significantly by 25% over the corresponding period last year. During the first half of 2009 NDB Bank was also able to strengthen its liquidity position through a significant increase in customer deposits by 21% over December 31, 2008 and by gaining additional credit lines from multi-lateral agencies.

NDB Bank remains a well-capitalised bank among local banks with a Tier 1 Capital Adequacy Ratio of 13.52% and a Tier 1 & 2 ratio of 16.25% and is well in excess of the regulatory minimum of 10%.

Non Performing Loans

The Bank’s stringent policies in maintaining the quality of its loan book, resulted in the ratio of Non Performing Loans (NPLs) to the gross lending portfolio increasing to only 3.08% as at June 30 as compared to 2.3% as at December 31, 2008. It should be noted that NDB Bank’s NPL ratio remains one of the lowest in the local banking industry where the average ratio was 8.7% as at June 30.

Following the recent Banking Act Direction No.9 of 2008 by the Central Bank of Sri Lanka, the criteria relating to the requirement to classify loans as NPLs were relaxed. However, NDB Bank opted to follow the earlier more stringent process in order to ensure the strict management of its loan book. In the event that NDB Bank followed the new NPL classification basis, the NPL’s would have declined by Rs.93 million to Rs.1,519 million resulting in a lower NPL ratio of 2.94%.

Operating costs

By adopting effective cost reduction methods NDB Bank managed to curtail its operating cost to a 13% increase over the corresponding period last year despite the challenging economic conditions. Further NDB Bank’s cost income ratio excluding exceptional items was 44% for the period and this ratio is one of the lowest amongst the local banking industry. The effective overall tax rate of NDB Bank inclusive of the Financial Services VAT was 54% for the period as compared with 53% for the corresponding period last year.

Fitch Credit Rating

NDB Bank’s Fitch Credit rating of AA (lka), is amongst the best in the industry and reflects NDB Bank’s strong financial profile in terms of its capital base, profitability and asset quality. NDB Group continues to focus on its business strategy, which is to grow in corporate, retail, emerging corporates (SME), project finance, specialized commercial markets, investment banking, stock brokering and insurance areas.

Local and regional growth

The NDB Group’s strategic investment arm, Capital Development and Investment Company PLC, a subsidiary of NDB Bank acquired a controlling interest of a direct and indirect shareholding representing 51% of the issued share capital of Eagle NDB Fund Management Company Limited from Eagle Insurance Company PLC during the second quarter of 2009. Accordingly, AVIVA International Holdings, through AVIVA NDB Finance Lanka (Private) Limited acquired an indirect stake of 49% of ENDB.

Both NDB Group and ENDB clientele can now benefit from the synergies of this acquisition. Both existing and potential customers now have access to a wider selection of wealth management products that are designed for the local market; using global expertise, innovation and technology. 

NDB Bank also expanded its business operations in the region early this year by acquiring a controlling interest of 77.8% in an investment banking operation in Bangladesh, NDB Capital Limited. The group share of profits from the diversified group company investments increased by 16% over the corresponding period last year.

NDB Bank offers a wide range of commercial banking services through its growing island-wide branch network; which is set to grow in the Northern and Eastern Provinces in the months to come. In addition, as part of the NDB Group, its customers have access to the a full range of banking and financial services, including market driven and consumer-oriented retail banking, corporate banking, project finance, SME lending, investment banking, stock brokering, insurance solutions and wealth management, making NDB a truly universal bank. 

ComBank first to offer 365 day banking in Jaffna

Commercial Bank of Ceylon has launched 365-day banking at its main branch in Jaffna, becoming the first bank to offer this service in the Peninsula.

Commercial Bank was also the first bank to offer ATM facilities and real time online banking in the peninsula. The main branch was established in 1939 and has served the people even during the most difficult times.

Located at 474, Hospital Road, Jaffna, the branch, one of five Commercial Bank branches in the peninsula, will open for business every day of the year from August 16 onwards, from 9 am to 3pm on week days, and from 9 am to 1.30pm on holidays.

“It is heartening to see life returning to normal in the north and the Commercial Bank is happy to facilitate and further encourage this process by extending features like 365-day banking,” said the Bank’s Deputy General Manager, Sanath Bandaranayake.

He said the demand for banking services had increased sharply in areas of the north and east, following the end of the military conflict. Having  pioneered this service in Sri Lanka, Commercial Bank has extensive experience in 365-day banking, with 28 branches and Supermarket Banking Counters already offering this facility in most major towns of the country. 

“Extending this facility to our Main Branch in Jaffna, which has been in operation for over 70 years,  will be of immense benefit to residents of the entire Peninsula,” Bandaranayake said.

Among the services available at this branch on a 365 day basis are cash and cheque deposits in rupees or in foreign currency, withdrawals from savings accounts and encashment of cheques up to Rs.  500,000, opening of rupee or  foreign currency savings and fixed deposit accounts and payment of e-Exchange and MoneyGram remittances. Issue of travellers cheques, foreign currency notes and encashment of travellers cheques or foreign currency notes up to Rs. 200,000 will be available shortly. 

HNB felicitates senior staff 

Hatton National Bank PLC has been felicitating its staff members who complete 25 years in service since 1997.  This year too a ceremony was held at the Bank’s Auditorium on a grand scale in the presence of the Managing Director/CEO, members of the corporate management and spouses of staff members who had completed 25 years of service in 2008.

American Express adds new benefits

American Express announced new benefits for cardmembers each time they use their American Express Card at Keells Supermarkets. American Express will be offering shoppers the chance to win Rs10,000 in cash daily as well as the chance to win free air tickets weekly.

Cardmembers simply need to use their card to make a purchase at Keells Super for a minimum value of Rs.2500 to be eligible for daily and weekly prizes. The offer is available at all Keells outlets islandwide.

Commenting on this, Chief Manager Cards and Consumer Assets, Nations Trust Bank, Lewie Diasz said, “We are delighted to partner with  Keells Super as well as  Classic Travel to offer our cardmembers this amazing opportunity. This benefit will be available till end August in order to enjoy the holiday season.”

The Winners of the first three air tickets to Singapore, Chennai and Dubai are Uwanthi Perera, Hiran Jayasuriya and Ranjanie De Silva.

ComBank’s total assets top Rs. 300 bn in 1H ’09 

Commercial Bank of Ceylon Group has posted a turnover of Rs 22.051 billion in the six months ended June 30, 2009, recording a growth of 4.40 per cent.

In results released to the Colombo Stock Exchange last week, Commercial Bank of Ceylon PLC, its subsidiaries and associates reported a profit before tax and financial VAT of Rs 4.520 billion, and profit before tax of Rs 3.440 billion. Group Net profit after tax for the first half of 2009 surpassed the Rs. 2 billion mark to reach Rs 2.015 billion.

The Group’s non-interest income grew by 23.88 per cent to Rs.3.620 billion mainly as a result of the contribution from exchange profit, the Bank said. This coupled with a growth in total assets which reached the Rs. 300 billion mark enabled Commercial Bank of Ceylon PLC to post moderate results in the first six months of 2009. The Group reported a foreign exchange profit of Rs.1.915 billion, an increase of 77.91 per cent over the Rs. 1.076 billion reported in the corresponding period in 2008. 

In contrast, Other Income at Rs. 1.705 billion recorded a drop of 7.63 per cent compared with the Rs.1.846 billion reported in the corresponding period of the last year due to the inclusion of the profit on the sale of Commercial Bank’s stake in the shares of Commercial Leasing Company PLC, one of the associate companies of the Group, under Other income recorded for the first half of last year.

Non-interest expenses grew by 19.62 per cent to Rs.4.156 billion largely due to personnel costs increasing by 25.18 per cent to Rs.2.229 billion. This was due to enhanced employment benefits paid under the Collective Agreement signed, effective January 1, 2009, with the Ceylon Bank Employees Union for non-executive staff, salary increments granted to executive officers and an increase in number of staff during the period under review, the Bank said.

Net provisions on account of Bad and Doubtful Debts decreased by Rs. 64.0 million or 8.04 per cent, with the reversal of a part of the statutory general provision made as stipulated by the provisioning requirements of the Central Bank of Sri Lanka, consequent to a drop in the total performing and overdue advances portfolio of the Bank during the half year under review. However, the specific provisions on non-performing loans and advances increased by Rs. 396.7 million or 59.42 per cent.

One of the main reasons for the drop in pre and post tax profits of the Group was the decrease in net interest income by Rs. 282.2 million or 4.65 per cent. This was mainly due to an increase in the cost of funds due to a shift in the deposits mix from low cost deposits to high cost deposits. The interest income on loans and advances compared to the corresponding period in 2008 increased marginally by 0.02 per cent, notwithstanding a decrease in performing loans and advances and an increase in non-performing loans and advances. The interest margins narrowed to 4 per cent in 2009 compared to 4.47 per cent recorded for the corresponding period in 2008.

Total assets of the Group grew by 6.83 per cent since December 31, 2008 to reach Rs. 300.8 billion as at June 30, 2009 and this helped the Bank to maintain its position as the largest indigenous private bank in Sri Lanka.

Total deposits of the Group, which stood at Rs 199.9 billion as at December 31, 2008, rose to Rs 215.7 billion, as at June 30, 2009. However, the total gross loans and advances of the Group, which stood at Rs 189.7 billion as at December 31, 2008, dropped to Rs. 176.9 billion as at June 30, 2009 in the backdrop of the adverse macroeconomic conditions that prevailed in the country. The Bank’s gross and net non-performing advances ratios increased to 8.85 per cent and 6.65 per cent respectively as at June 30, 2009, and these ratios were in line with the current average non-performing advances ratios of the banking industry. 

Pre-tax profit of the Bank for the first half 2009 amounted to Rs. 3.384 billion as against Rs. 3.783 billion reported for the corresponding period in 2008. This was a drop of Rs. 399 million or 10.54 per cent.  Post-tax profit of the Bank for the first half of 2009 amounted to Rs. 1.977 billion as against Rs. 2.259 billion reported for the corresponding period in 2008, and reflected a drop of Rs. 282 million or 12.47 per cent.

CDB records Rs. 757mn revenue for Jan-June 2009 

Citizens Development Business Finance Ltd (CDB) recorded a healthy Rs. 757mn revenue for the first six months of 2009 in the context of a challenging environment. This achievement reflects CDB’s implementation of a focused strategy and its ability to weather adverse external conditions with its committed staff led by a professional management team.

CDB’s Director/GM/CEO Mahesh Nanayakkara said, “Our results are testimony of our strong commitment towards corporate governance not merely as a compliance requirement but as an indispensable tool that adds value to the business, thereby safeguarding the interest of all stakeholders.”

He said that the Citizens Development (CDB) has put in place a strong integrated risk management framework covering both corporate governance and enterprise governance. “While corporate governance focuses on conformity through the audit committee comprising of independent directors and headed by a member of the Institute of Chartered Accountants of Sri Lanka, enterprise governance focuses on business process and includes specific risks areas such as credit, market, liquidity and strategic risks through the integrated risk management committee headed by an independent director who is a Chartered Management Accountant and other key management personnel of the institution”, Nanayakkara added.

Citizens Development (CDB) is one of the top 10 largest financial institutions from among 54 players registered under the Finance Companies Act and specialised leasing institutions registered under the Finance Leasing Act.

During the six month period ending June 30, 2009, CDB’s revenue was Rs. 757mn compared to the corresponding previous period figure of Rs. 753Mn. Net interest income recorded a growth of 36% compared to the corresponding previous period recording a figure of Rs. 238mn. Profit after tax recorded a sum of Rs. 25mn compared with the Rs. 29mn recorded in the corresponding previous period. Total assets recorded Rs. 5,493mn as at 30th June 2009 compared to Rs. 6,384Mn recorded as at 30th June 2008.

CDB’s Senior Manager – Business Development Malcom Weerasuriya said that the CDB is in a strong position to capitalise on the opportunities available in the new era of Sri Lanka following the eradication of three decades of terrorism in the country. He added that the CDB is strongly committed to broaden its business domain both geographically and product-wise with a special focus on making finance / lending products accessible to the bottom of the pyramid market as well as to the rural sector.

CDB’s Senior Manager – Finance & Planning Damith Tennakoon said that “a positive stance adopted by the international funding agencies is the best testimony of the faith they have in our country’s future potential. We have absolutely no doubt that it is going to be a quantum leap in economic development.”

He further commended the initiatives taken by Central Bank of Sri Lanka to make it a mandatory requirement for institutions registered under the Finance Companies Act to obtain a listing. “Listing of CDB shares on the Colombo Stock Exchange (CSE) was a key target in our strategic plan and we are yet to decide whether we will be going for the listing by way of an Initial Public Offering (IPO) or by way of an introduction,” he said.

CDB is an independent institution directly regulated and supervised by the Central Bank of Sri Lanka.

In the national interest 

Continuing with its mission of helping the country and its people, Seylan Bank recently made a donation towards the historic Kataragama Esala Perahera which is to be held shortly. Shown in the picture is Manager - Tissamaharama Branch, K.J.S Hettiarachchi handing over a cheque for Rs. 100,000 to the Basnayake Nilame, Kataragama Devalaya, Shashindra Rajapakse

0% interest for 24 months  

For the first time in Sri Lanka Standard Chartered Credit cardholders can purchase goods at Abans Elite, Damro, Modern Homes, Singer Mega, Softlogic Max and Softlogic Lifestyle Electronics at 0% interest and repay in 18 or 24 months. This is in addition to the existing 3, 6, 9 and 12 monthly installment schemes. What’s more they will also be entitled to discounts of up to 15% when they shop at partner outlets using their Standard Chartered Credit Card. This offer is valid till 31st December 2009.

“Now you can own that dream home theatre system or the bedroom suite you always wanted with the Standard Chartered Credit Card. It’s just one more step we take to make sure that we give our credit cardholders the best privileges by offering them convenience and an affordable solution,” commented Head of Credit Cards, Standard Chartered Bank, Sheahan Arasaratnam.

“We are pleased to partner with Standard Chartered Bank and we are confident that the promotion will be a treat to our loyal and new customers. Standard Chartered credit cardholders can experience this exclusive offer on all our new furniture range at Modern Homes; ranging from sitting room suites, bedroom suites, dining sets, wardrobes, dressing tables, display units, children’s furniture along with variety of brands such as Samsung, Whirlpool, Hitachi, and Philips at Singer Mega,” added Marketing Director for Singer, Nasser Majeed.

“We were delighted to partner Standard Chartered Bank since this was a first of its kind promotion in Sri Lanka giving true value to our customers. We are thankful to Standard Chartered Bank for their innovation and the timing is the best,” said  Brand Manager for Abans Pvt. Ltd, Pubudu Suraweera.