National Development Bank Plc · CSELK:NDB.N0000
National Development Bank — Q1 2021 Earnings Presentation
26 slides from National Development Bank's earnings presentation, May 17, 2021
Slide 1: Earnings Call Q1 2021
Earnings Call Q1 2021 National Development Bank PLC NDB.N0000 17 May 2021 2.30 pm Colombo – Sri Lanka National Long Term Rating: A+(lka) Stable Outlook by Fitch Ratings Lanka Limited
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This document has been prepared by National Development Bank PLC [“NDB”, “Bank” or the “Group”] solely for use at its presentation to potential & current investors. By accepting this document, you agree to maintain absolute confidentiality regarding the information disclos
Slide 3: Corporate Participants
Corporate Participants PRESENTED BY Dimantha Seneviratne Director/ Group Chief Executive Officer Panelists Sanjaya Perera – Senior Vice President – Personal Banking & Branch Network Deepal Akuratiyagama – Chief Operating Officer Suvendrini Muthukumarana – Vice President – Finance Niran Mahawatte – V
Slide 4: Agenda
AGENDA PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 5: Part I - Corporate Profile
PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 6: Part I - Corporate Profile
PART I - CORPORATE PROFILE • Over forty years of banking supremacy since 1979 • Fourth largest listed commercial bank in Sri Lanka • Credit rating of A+ LKA with a Stable Outlook by Fitch Ratings Lanka Limited • Over 3,000 NDBers • 113 branches and a strong digital banking platform • Only financial
Slide 7: Part II - Operating Environment
PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 8: Part II - Operating Environment
PART II – OPERATING ENVIRONMENT • Sri Lankan economy contraction (in real terms) by 3.6% in 2020 – the deepest recession since independence, owning to the effects of the COVID-19 pandemic [2019 – 2.3% growth] • Subdued inflationary pressure and well-anchored inflation expectations allowed a signific
Slide 9: Part III - Financial Performance Q1 2021
PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 10: Performance Overview
PART III – PERFORMANCE OVERVIEW Resilient performance in turbulent environment Sustained healthy growth in the Balance Sheet Impressive profitability Enhanced KPIs YTD growth rates YoY growth rates Enhanced KPIs Balance Sheet Income Statement KPIs - Total assets growth - Post tax - ROE 15.79
Slide 11: Income Statement - Fund Based Income
PART III – INCOME STATEMENT - FUND BASED INCOME LKR Mn Q1 2021 Q1 2020 Variance % Interest Income 12,666 13,747 (1,081) Highlight: (8) Enhanced NIM of 3.29% Interest Expense 7,536 9,417 (1,881) (20) Net Interest Income 5,129 4,330 800 18 Trend in Market Rates and Bank NIM 11.45 10.49 10.00 • Reducti
Slide 12: Income Statement - Non-Fund Based Income
PART III – INCOME STATEMENT – NON-FUND BASED INCOME LKR Mn Q1 2021 Q1 2020 Variance % Net fee and commission income 1,325 1,026 299 29 Other non-fund based income 1,721 1,272 449 35 Total non-fund based income 3,046 2,298 748 33 Fund to Non-fund Based* Income • Net fee and commission income driven b
Slide 13: Income Statement - Impairment
PART III – INCOME STATEMENT – IMPAIRMENT LKR Mn Q1 2021 Q1 2020 Variance % Total impairment charges 2,183 1,287 897 70 NPL Ratio Trend Provision charges increased in line with • the growth in the loan book 5.4 5.57 5.35 5.40 • provisions made at both collective and individual levels in 4.56 4.93 4.7
Slide 14: Income Statement - Operating Expenses
PART III – INCOME STATEMENT – OPERATING EXPENSES Cost composition % LKR Mn Q1 2021 Q1 2020 % Q1 2021 Q1 2020 Personnel expenses 1,378 1,269 9 55 52 Depreciation & amortization 140 139 0.2 5 6 Other expenses 1,006 1,008 (0.2) 40 42 Total operating expenses 2,524 2,417 4 Improved Cost to Income ratio
Slide 15: Income Statement - Taxation & Profitability
PART III – INCOME STATEMENT – TAXATION & PROFITABILITY Effective Tax Rate % 49 TAXATION - LKR Mn Q1 2021 Q1 2020 % VAT on Financial services 613 556 10 41 42 42 41 40 Income tax 521 631 (18) 33 Total taxes 1,134 1,187 (5) Income tax rate - 24% down from 28% 2016 2017 2018 2019 Q1 2020 2020 Q1 2021
Slide 16: Balance Sheet Performance
PART III – BALANCE SHEET PERFORMANCE LKR Bn Q1 2021 FY 2020 Q1 2020 YTD Quantum YTD % YoY Quantum YOY % growth growth growth growth Total assets 636 627 553 9.6 2 83 15 Investments 161 159 106 2 1 55 53 Gross loans 462 444 425 18.6 4 37 9 Total deposits 500 490 414 9.2 2 85 21 Borrowings 79 80 87 (0
Slide 17: Capital Raising
PART III – CAPITAL RAISING Capital -EXPECTED CAPITAL RAISING OF LKR 9.5 BN VIA RIGHTS ISSUE AND PRIVATE PLACEMENT -Rights Issue announced in October 2020 • 28 new ordinary voting shares for every 61 ordinary voting shares held • A total of 106,780,489 shares issue under Rights Issue (RI) • Considera
Slide 18: Regulatory Ratios on Capital & Liquidity
PART III – REGULATORY RATIOS ON CAPITAL & LIQUIDITY BASEL III – Q1 2021 Bank Group Common Equity Tier 1 Capital Ratio % [Minimum Requirement -6.5%] 9.00 9.47 Tier 1 Capital Ratio % [Minimum Requirement – 8.0%] 9.00 9.47 Total Capital Ratio % [Minimum Requirement – 12.0%] 13.74 14.09 Liquidity Covera
Slide 19: Investor Ratios
PART III – INVESTOR RATIOS Ratios Bank Group Q1 2021 FY 2020 Q1 2021 FY 2020 Closing price per share [LKR] 80.80 78.10 - - EPS [LKR] [Annualized] 30.98 23.77 33.62 21.99 ROE [%] [Annualized] 15.79 13.13 16.01 11.20 ROA [%] [Pre-tax] [Annualized] 1.62 1.59 1.76 1.58 Book value per Share [LKR] 199.81
Slide 20: Part IV - NDB's Response to the Pandemic
PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 21: NDB's Response to the Pandemic
PART IV – NDB’S RESPONSE TO THE PANDEMIC Digital financial services functional in full force to ensure access to safe banking c. 80% of the transactions via digital modes Branches opened in selected localities amidst restrictions imposed within highest health safety guidelines “Bank2U” branchl
Slide 22: Other Initiatives
PART IV – OTHER INITIATIVES • Continued equilibrium in performance without compromising on any aspect • Value generated to all stakeholders alike – Sound financial results to shareholders – Customer-centric solutions – Considerable strides made in digital sphere – E.g: NEOS PAY – Concerted efforts i
Slide 23: Part V - Way Forward
PART I - CORPORATE PROFILE PART II – OPERATING ENVIRONMENT PART III – FINANCIAL PERFORMANCE Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A
Slide 24: Way Forward - Mid-Term Strategy
PART V – WAY FORWARD Mid-Tem Strategy Voyage guiding the NDB Group 2025 towards “The Banking Group of Choice” Committed to Customer- support national centric economic solutions prosperity Continued Digital innovation for drive industry leader initiatives 24
Slide 25: Part VI - Q&A
PART I - CORPORATE PROFILE PART II – MACRO-OPERATING ENVIRONMENT PART III – NDB FINANCIAL PERFORMANCE – Q1 2021 PART IV – NDB’S RESPONSE TO THE PANDEMIC PART V – WAY FORWARD PART VI – Q&A Please use the chat option in the MS Teams window to pose your questions to the GCEO and Panel.
Slide 26: NDB Investor Relations
Analysts Support Clearly defined Quarterly Results Calendar released at the end of each quarter Webinar transcripts hosted to the NDB NDB Investor Relations Corporate website/ IR page in playback video and written transcript forms Dedicated communication channels made available for any queries
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