The core banking revenue (net interest income, forex and commissions, etc) of NDB Bank grew at a steady pace by 15% over the corresponding period last year, as a result of the significant growth in loans and advances by 20% and deposits by 23% over the comparative period. The Profit Before Tax and the Profit After Tax of the Bank excluding the exceptional equity capital gains earned by the Bank during the corresponding period last year increased by 18% and 23% respectively over the comparative period, the bank said in a statement.

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, it said.

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.

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, the statement said.

"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 statement said.

"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."

The effective overall tax rate of the Bank inclusive of the Financial Services VAT was 53% for the current period as compared with 48% for the corresponding period last year. The lower effective rate for the corresponding period last year was due to the exceptional equity capital gains that are exempt from income tax, earned by the Bank during the first half of 2007. Excluding the effect of that gain, the effective rate of tax on core banking income was 54%, it.

"The overall tax rate of the group inclusive of the VAT charge was 51% as compared with 44% for the corresponding period last year. The effective tax rate excluding the equity capital gains was 49% for the corresponding period last year, which compares with a rate of 51% for the current period."

Fitch Ratings Lanka Ltd confirmed the "AA" credit rating of NDB Bank, which reflects the Bank’s strong financial profile, sound asset quality and strong capital position. Further, NDB Bank was also ranked amongst the top 10 Sri Lankan Companies for the financial year 2006 – 2007 recently chosen by the leading business magazine "Business Today".