National Development Bank Plc · CSELK:NDB.N0000
National Development Bank — Q3 2020 Earnings Presentation
29 slides from National Development Bank's earnings presentation, Nov 13, 2020
Slide 1: Investor Webinar Earnings Call Q3 2020
INVESTOR WEBINAR Earnings Call Q3Q3 2019 2020 National Development Bank PLC National Development [CSE Stock Code - NDB.N0000]Bank PLC NDB.N0000 15 November 2019 10:00 HRS Colombo 13 Sri November Lanka 2020 10.00 am Colombo – Sri Lanka National Long Term Rating: A+(lka) Stable Outlook by Fitch Rating
Slide 2: Forward Looking Statements
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 regard
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 – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 4
Slide 5: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 5
Slide 6: Corporate Profile
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 services
Slide 7: Corporate Profile Contd.
Corporate Profile Contd. Shareholder Milestones In September In 2019 NDB 2020, NDB crossed the In August LKR 500 Bn crossed LKR 2005, NDB mark in total 600 Bn total NDBSL acquired assets mark, asset incorporated commercial further NDB was becoming the a commercial operations, affirming its privatize
Slide 8: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 8
Slide 9: NDB Historic Financial Performance
NDB Historic Financial Performance ROE ROA 17.6% 1.9% 1.9% 2.0% 17.3% 17.4% 1.8% 2.0% 16.1% 1.7% 1.8% 1.4% 16.2% 13.7% 1.6% 15.6% 1.3% 13.4% 13.2% 10.3% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 NDB INDUSTRY Industry NDB NIM 3.6% 3.6% 3.6% Cost to Income Ratio 3.5% 3.5% 3.5% 3.5% 49.1% 48.46
Slide 10: NDB Historic Financial Performance Contd.
NDB Historic Financial Performance Contd. CASA Ratio NPL Ratio 5.5% 40.3% 4.7% 37.13% 34.2% 32.0% 4.5% 31.36% 4.8% 3.2% 3.4% 25.6% 3.5% 22.7% 21.2% 21.8% 2.6% 19.9% 2.5% 2.5% 2.6% 2.9% 2.4% 1.5% 1.8% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 NDB INDUSTRY NDB Industry Total CAR 16.53% 15.7% 1
Slide 11: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 11
Slide 12: Operating Environment Outlook
Operating Environment Outlook Growth projections in percentage Emerging Market and World Output Advanced Economies Developing Economies 5.2 6.0 3.9 2.8 3.7 1.7 2019 2020 2021 2019 2020 2021 2019 2020 2021 -3.3 -4.4 -5.8 Global growth projection for 2020 -4.4% Global growth projection for 2021 is
Slide 13: Operating Environment Outlook Contd.
Operating Environment Outlook Contd. Macro economic indicators – Sri Lanka • Trade deficit improved in Sep 2020 to USD 4.3 due to contractions in imports being larger than contraction in exports (Imports – USD 11.7 Bn Exports – USD 7.4 Bn) • Worker remittances increased steadily since June 2020 indi
Slide 14: Operating Environment Outlook Contd.
Operating Environment Outlook Contd. Accommodative monetary policy stance of the Central Bank of Sri Lanka Timeline of policy rate easing in 2020 30 Jan 17 Mar 17 Mar 03 Apr 06 May 16 Jun 09 Jul 22 Oct Policy rates SRR Policy rates Policy rates Policy rates SRRR Policy rates Policy rates reduced by
Slide 15: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 15
Slide 16: Performance Highlights
Performance Highlights Q3 2020 Q3 2019 % Operating Income 19.6 17.6 11 Profitability Operating Expenses 7.0 7.2 -2 (LKR Bn) Profit before All Tax 7.7 7.6 2 Profit after Tax 4.5 3.4 34 Q3 2020 FY 2019 % Financial Total Assets 600 530 13 Position (LKR Bn) Total Gross Loans 443 409 8 Total Deposits 464
Slide 17: Income: Fund based income
Income Fund based income LKR Mn Q3 2020 Q3 2019 Variance % Highlight: Interest Income 40,808 39,424 1,384 4 Decline in NIM by 30 bps in Q3 Interest Expense 27,141 26,332 809 3 2020 vs 2019 Net interest income 13,667 13,092 576 4 Movement in Market Rates and Bank NIM • Moderate growth in NII amidst c
Slide 18: Income (Contd.): Non Fund based income
Income (Contd.) Non Fund based income LKR Mn Q3 2020 Q3 2019 Variance % Net fee and commission income 2,904 2,753 151 5 Other non-fund based income 2,986 1,737 1,249 72 Total non-fund based income 5,890 4,489 1,400 31 Highlight: Net fee & commission income growth due to uptick in volumes Fund to Non
Slide 19: Impairment
Impairment Impairment charges Highlights: -NPL on the increasing trend, LKR Mn Q3 2020 Q3 2019 Variance % reflecting wider market Individual Impairment 2,690 2,119 571 27 movements -LKR 583 Mn accounted for, in Collective Impairment 1,458 561 896 160 other impairment charges Other provisions - charg
Slide 20: Operating Expenses
Operating Expenses Operating Expenses Cost composition % LKR Mn Q3 2020 Q3 2019 % Q3 2020 Q3 2019 Personnel expenses 3,855 3,702 4 55 52 Depreciation & amortization 411 393 5 6 5 Other expenses 2,752 3,058 -10 39 43 Total operating expenses 7,019 7,153 -2 • Total operating expenses reduction of 2% •
Slide 21: Taxation & Profitability
Taxation & Profitability Taxation LKR Mn Q3 2020 Q3 2019 % VAT on Financial services 1,473 1,374 7 NBT on Financial services - 185 -100 Highlight: Effective tax rate of 42% [Down Debt repayment Levy - 757 -100 from 56% in Q3 2019] Income tax 1,763 1,894 -7 Total taxes 3,236 4,211 -23 • Considerable
Slide 22: Balance Sheet Performance
Balance Sheet Performance LKR Bn Q3 2020 FY 2019 Q3 2019 YTD YTD % YoY YOY % Quantum growth Quantum growth growth growth Total assets 600 530 505 71 13 95 19 Investments 141 95 91 45 47 50 55 Gross loans 443 409 390 34 8 53 14 Total deposits 464 405 374 59 15 90 24 Borrowings 80 72 80 8 11 0 0 Total
Slide 23: Capital & Liquidity
Capital & Liquidity BASEL III – Q3 2020 Bank Group Common Equity Tier 1 Capital Ratio % [Minimum Requirement -6.5%] 9.21 9.77 Tier 1 Capital Ratio % [Minimum Requirement – 8.0%] 9.21 9.77 Total Capital Ratio % [Minimum Requirement – 12.0%] 14.21 14.62 Liquidity Coverage Ratio [%] – Rupee [Minimum Re
Slide 24: Investor Ratios
Investor Ratios Investor Ratios Bank Group Q3 2020 FY 2019 Q3 2020 FY 2019 Closing price per share [LKR] 89.00 100.00 - - EPS [LKR] [Annualized] 23.92 23.05 21.01 21.53 ROE [%] 13.37 13.73 10.85 11.59 ROA [%] [Pre-tax] 1.70 2.01 1.65 1.97 Book value per Share [LKR] 187.97 178.02 200.85 195.60 P/E [t
Slide 25: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 25
Slide 26: Impact of COVID-19 & NDB's Response
Impact of COVID-19 & NDB’s Response Offering banking services at customer convenience and safety Digital financial services functional in full force to ensure access to safe banking *On average, 80% of the transactions of the Bank are carried out via digital modes 3 mobile ATM trucks deployed ac
Slide 27: Impact of COVID-19 & NDB's Response
Impact of COVID-19 & NDB’s Response Support extended to affected customers Extension of financial assistance through Government refinancing scheme – Saubhagya COVID-19 Renaissance Loan Facility - Over LKR 18 Bn approved - the fourth highest amount approved by a bank in the country Over 30% of th
Slide 28: Agenda
Agenda • Part I – Corporate Profile • Part II – NDB Historic Financial Performance • Part III - Operating Environment Outlook • Part IV – NDB Financial Performance – Q3 2020 • Part V –Impact of COVID-19 and NDB’s Response • Part VI – Q&A 28
Slide 29: NDB Investor Relations
NDB Investor Relations NDB’s Investor Relations is the recipient of the Gold Award for Best Investor Relations at the coveted CFA Sri Lanka Capital Market Awards, for four consecutive years in 2019, 2018, 2017 & 2016. INVESTOR WEBINAR Investor/ Analysts Support Q3 2019 Clearly defined Quarterly Re
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