Strong Financial Performance Demonstrates Resilience and Growth
National Development Bank PLC recently released its financial results for the nine months ended September 30, 2025, to the Colombo Stock Exchange. The report highlights impressive profitability growth driven by solid core banking operations. Key metrics show a significant increase in net operating income and pre-tax profit, rising by 32.3% and 62.1%, respectively, reaching LKR 28.4 billion and LKR 11.0 billion (9M-24: LKR 21.5 billion and LKR 6.8 billion).
Net interest income saw an improvement of 6.4% to LKR 25.9 billion over 2024. This is particularly notable given the tapering interest rate environment during the period. Despite this, the Bank managed to stabilize its Net Interest Margins at 4.1% (2024: 4.3%), which was 4.3% on a like-for-like basis excluding one-off items (2024: 4.5%). By the end of September 2025, the Bank had close to LKR 46.8 billion in Loans and Deposits under a special arrangement with its customers, featuring a netting-off mechanism (end 2024: LKR 19.6 billion).
Diversified Revenue Streams and Improved Risk Management
Net fee and commission income grew by 13.8% to reach LKR 5.8 billion YoY, with a particularly strong performance in the third quarter, where it increased by 24.2% compared to the same period in 2024. Impairment charges continued to decline, reflecting the Bank’s efforts to enhance the quality of its loan book. For the period under review, impairment charges amounted to LKR 5.9 billion, representing a 46.7% reduction YoY.
The Bank’s pre-tax return on average assets stood at 2.3%, while for the third quarter alone, it was 2.6% (2024: 3.1%). Net asset value per share was LKR 194.01 (2024: LKR 186.91), and compared with a closing share price of LKR 142.00, it showed a 25.4% appreciation at the end of 2024. Group Net asset value per share was LKR 207.34 (2024: LKR 199.13).
Expansion of Deposits and Loans
Total deposits reached LKR 702.9 billion at September 30, 2025 (end 2024: LKR 631.7 billion, an 11.3% growth). Meanwhile, net loans expanded to LKR 585.4 billion (end 2024: LKR 460.7 billion, a 27.1% growth). The Bank’s Impaired loans (Stage 3) to total loans ratio was 4.5% (end 2024: 5.2%), which compares favorably with the industry average. Its Stage 3 provision coverage was 55.6% (end 2024: 54.5%), aligning closely with industry norms.
Robust Liquidity and Solvency Ratios
Liquidity levels remained strong, with the Bank’s Liquidity coverage ratios across both Rupee and All currency being 343.3% and 226.6%, respectively, at September 30, 2025 (end 2024: 358.1% and 308.3%). The Net stable funding ratio was 136.1% (end 2024: 152.4%)—all well above the minimum regulatory requirements of 100%. The Bank’s solvency levels, as measured by CET1/Tier I and Total CAR, were 11.5% and 15.4%, respectively, representing adequate buffers over its regulatory minimums (end 2024: 13.7% and 19.1%).
Strategic Focus and Future Outlook
Commenting on the financial results, the Bank’s Director/Chief Executive Officer, Kelum Edirisinghe, emphasized the consistent positive progress made across all business operations. He highlighted the strategic clarity, agility, and commitment of the staff in navigating the fast-paced market landscape while creating excellence in every aspect of operations.
Among key performance highlights, the growth of the Small and Medium Scale Enterprise (SME) loan book expanded by over 24.0% on a year-to-date basis, underscoring the Bank’s commitment to supporting the sector. Looking ahead, the Bank remains focused on sharpening its strategic focus, with significant groundwork underway. A broad strategic realignment is taking shape, positioning the Bank for sustainable growth and value creation for shareholders and stakeholders.
Commitment to ESG Principles
The Bank’s commitment to Environmental, Social, and Governance (ESG) principles remains steadfast. From the outset, sustainability has been embedded into its business model, ensuring that growth is inclusive, responsible, and aligned with the long-term well-being of communities and stakeholders. Mr. Edirisinghe expressed sincere appreciation to customers, shareholders, staff, and other stakeholders for their trust, loyalty, and support.
Together, the Bank remains focused on creating a future of enduring impact and shared prosperity for all stakeholders.