NDB posts best ever profit boosted by strategic divestment
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Board of Directors
Both the new Chairman of the NDB and its CEO have stated in the recently released 2013 annual report of the bank that the directors of both the NDB and the DFCC Bank have commenced preliminary talks with a view to achieving such consolidation but given no timeframe for completing an arrangement.
Mr. Sunil G. Wijesinha, who assumed the chairmanship of the NDB on December 1, 2013 noted that "the regulators have expressed the desire to see the two development lending oriented banks, DFCC Bank and National Development Bank PLC merged in order to create a strong development bank that could provide a broader impetus development bank activities."
Wijesinha said that the talks between the two banks had begun in this context and has told shareholders "your bank is ready to embrace the positive changes that the consolidation of the sector will bring about."
NDB’s Director/CEO Rajendra Theagarajah said that the merger talks were intended "to create a strong development bank of significant strength and stature – an institution that will be one of Sri Lanka’s systemically important banks in the next few years."
"After all, size does matter," he asserted.
In a note on events occurring after balance sheet date, the report said that the NDB and DFCC Bank "are about to commence preliminary discussions with a view to achieving such consolidation."
"The consolidation of the two entities will be dependent on relevant approvals and possibly, passage of facilitative legislation."
Board of Directors
Both the new Chairman of the NDB and its CEO have stated in the recently released 2013 annual report of the bank that the directors of both the NDB and the DFCC Bank have commenced preliminary talks with a view to achieving such consolidation but given no timeframe for completing an arrangement.
Mr. Sunil G. Wijesinha, who assumed the chairmanship of the NDB on December 1, 2013 noted that "the regulators have expressed the desire to see the two development lending oriented banks, DFCC Bank and National Development Bank PLC merged in order to create a strong development bank that could provide a broader impetus development bank activities."
Wijesinha said that the talks between the two banks had begun in this context and has told shareholders "your bank is ready to embrace the positive changes that the consolidation of the sector will bring about."
NDB’s Director/CEO Rajendra Theagarajah said that the merger talks were intended "to create a strong development bank of significant strength and stature – an institution that will be one of Sri Lanka’s systemically important banks in the next few years."
"After all, size does matter," he asserted.
In a note on events occurring after balance sheet date, the report said that the NDB and DFCC Bank "are about to commence preliminary discussions with a view to achieving such consolidation."
"The consolidation of the two entities will be dependent on relevant approvals and possibly, passage of facilitative legislation."
Claiming "exemplary financial results" for the NDB, Theagarajah said that they have posted their best ever financial performance during the year under review including many firsts for the bank –
* The bank’s profit after tax reached an unprecedented Rs.7.7 billion, a staggering 164% year on year growth, albeit inclusive of an exceptional equity gain of Rs.5.3 billion arising from a strategic divestment.
* Amidst an environment of steadily declining margins, the bank successfully defended its position and maintained its net interest margin at 3.74% for the second successive year.
* The total operating income of the bank – comprising net interest income, fee and commission income and net trading income achieved an impressive 80% year on year growth to reach Rs.15.9 billion.
"However, the corresponding growth in net operating income was limited to 68% due to impairment losses totaling Rs.1.2 billion during the year. This was a result of increased stress levels within the industry for loan recoveries, and the bank’s prudent adoption of fair valuing the impaired loans based on sound judgment and objective evidence on future recoveries," he said.
The Bank of Ceylon with 9.94% of the NDB is its biggest individual shareholder followed by the EPF (9.72%) and the General Fund of the SLIC with 5.70%. The Life Fund of SLIC has 4.74% and the ETF 3.22%.
Dr. Sena Yaddehige with 5.26% is the biggest individual shareholder and Mr. Ashok Pathirage is among the top twenty. Several foreign funds and local banks like HNB and insurance companies such as Asian Alliance Insurance are also among the top 20 shareholders. The NDB’s own Employees Share Ownership Plan owns 2.51%.
The directors of NDB are: Messrs Sunil G. Wijesinha (Chairman), Ashok Pathirage (Deputy Chairman), Rajendra Theagarajah (Director/CEO),Trevine Jayasekara, Sarath Wickramanayake, Mrs. Kimarli Fernando, Anura Siriwardena, G.D.C. Ekanayake, Sujeewa Rajapakse, Mrs. Indrani Sugathadasa, Hemaka Amarasuriya (Chairman - Retired 30.11.2013), Russell de Mel (Director/CEO – Retired 23.8.2013) and Ms. Shehani Ranasinghe (Asst. Vice-President).
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* The bank’s profit after tax reached an unprecedented Rs.7.7 billion, a staggering 164% year on year growth, albeit inclusive of an exceptional equity gain of Rs.5.3 billion arising from a strategic divestment.
* Amidst an environment of steadily declining margins, the bank successfully defended its position and maintained its net interest margin at 3.74% for the second successive year.
* The total operating income of the bank – comprising net interest income, fee and commission income and net trading income achieved an impressive 80% year on year growth to reach Rs.15.9 billion.
"However, the corresponding growth in net operating income was limited to 68% due to impairment losses totaling Rs.1.2 billion during the year. This was a result of increased stress levels within the industry for loan recoveries, and the bank’s prudent adoption of fair valuing the impaired loans based on sound judgment and objective evidence on future recoveries," he said.
The Bank of Ceylon with 9.94% of the NDB is its biggest individual shareholder followed by the EPF (9.72%) and the General Fund of the SLIC with 5.70%. The Life Fund of SLIC has 4.74% and the ETF 3.22%.
Dr. Sena Yaddehige with 5.26% is the biggest individual shareholder and Mr. Ashok Pathirage is among the top twenty. Several foreign funds and local banks like HNB and insurance companies such as Asian Alliance Insurance are also among the top 20 shareholders. The NDB’s own Employees Share Ownership Plan owns 2.51%.
The directors of NDB are: Messrs Sunil G. Wijesinha (Chairman), Ashok Pathirage (Deputy Chairman), Rajendra Theagarajah (Director/CEO),Trevine Jayasekara, Sarath Wickramanayake, Mrs. Kimarli Fernando, Anura Siriwardena, G.D.C. Ekanayake, Sujeewa Rajapakse, Mrs. Indrani Sugathadasa, Hemaka Amarasuriya (Chairman - Retired 30.11.2013), Russell de Mel (Director/CEO – Retired 23.8.2013) and Ms. Shehani Ranasinghe (Asst. Vice-President).
www.island.lk
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