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The group Profit After Tax and the Profit Attributable to the Shareholders also increased by 7% and 9% respectively over the corresponding period last year excluding the said equity capital gains earned by the Bank during the corresponding period last year.
The Bank continues to progress as a financial service provider by offering a comprehensive range of banking products to its corporate, SME and consumer customers. These products and services are backed by efficient electronic processing including ATM's, state of art Internet Banking Services, Touch - Banking by phone and multiple delivery channels, operated by teams of highly experienced banking professionals. In addition to the wide array of products, NDB Bank introduced an innovative product - 'eZ Pay', South Asia's first mCommerce initiative and also launched a special savings account - 'Vishmitha' - offering zero-percent interest loans for the first time in Sri Lanka. The latest addition to NDB Bank's product portfolio is the "Premium Plus" Savings Account, which offers a higher interest of 14%. The bank's latest promotional campaign "NDB Badu Malla" is now underway, where NDB Bank rewards its customers by creating a winner every weekday, while encouraging them to save more and win more.
NDB Bank took another step towards consolidating its position in the financial sector by purchasing 23.86% of shares owned by Bank of Ceylon in the Capital Development & Investment Company PLC (CDIC) for Rs 1.15 b on 11 July 2008. Prior to the purchase, NDB owned 75.8% of CDIC, a public quoted company in the Colombo Stock Exchange. The recent purchase of CDIC shares by NDB increases its effective shareholding in Eagle Insurance Company PLC (Eagle) from 32.4% to 41.1%. CDIC is now positioned as an effective vehicle for NDB's plans for local and regional growth.
Mr. Eran Wickramaratne CEO - NDB Bank
The customers of the NDB Bank also have access to the products and services of the NDB Group, including insurance from Eagle, stock brokering from NDBS stockbrokers and Investment Banking from NDB Investment Bank, among others. Innovation and technology have been the hallmarks of NDB Bank and the rapid expansion of the branch network has helped the customers to enjoy an excellent service from its highly customer oriented staff.
The Bank now has 40 branches, which act as distribution channels supporting the various business areas - Corporate banking, SME lending, Retail Banking, Investment Banking and Insurance. The Bank's performance for the first half of the year has shown steady growth in profits despite the continuing expenditure incurred in building brand, increase in channels of distribution and IT systems and in training people on whom its success depends.
During the last quarter of 2006, the Central Bank of Sri Lanka mandated a 1% provision on the performing lending portfolio of each Bank. The Banks have been given time to make this provision over ten quarters ending on 31 March 2009. However the Bank reached the required level of provisioning by 30 September 2007 and has continuously complied with this requirement up to now. (The required general provision as at 30 June 2008 was Rs 432 m). The Bank's NPL ratio as at 30 June 2008 was 2.45% as compared with 2.29% as at the year-end and is one of the lowest in the banking industry.
The overheads of the Bank increased by 21% as compared with the corresponding period last year. The increased expenditure was due to investments in distribution channels, technology and brand improvement and inflationary pressure. Despite the increased expenditure, the Bank's cost income ratio of 43% for the current period still compares very favorably with the ratio of other local Banks.
