INTERIM FINANCIAL STATEMENTS · NDB sustains sound pre-COVID 19 growth and profitability amidst multiple stresses. Geared to propel economic recovery. • Total operating income of

INTERIM FINANCIAL STATEMENTS QUARTER ENDED 31 MARCH 2020 NATIONAL DEVELOPMENT BANK PLC CSE stock code: NDB.N0000 | Bloomberg: NDB SL | Reuter’s: NDB.CM

Released to CSE on: 20 May 2020

Table of Contents

Performance commentary 2

Financial statements published as per Rule 7.4 of the Listing Rules of the Colombo Stock Exchange 6

Important dates - Q1 2020 financial results release 21

Corporate information 21

*The financial statements presented herewith are the unaudited financial statements for the three months ended 31 March

2020 and are prepared in accordance with the Sri Lanka Financial Reporting Standards.

NDB sustains sound pre-COVID 19 growth and profitability amidst

multiple stresses. Geared to propel economic recovery.

• Total operating income of LKR 6.6 Bn up by 11%

• Post-tax profitability of LKR 1.7 Bn up by 27% YoY

• Balance sheet expansion by 4% YTD to LKR 553 Bn

• ROE enhanced to 15%

• NIMs challenged – 3.2% for the quarter

National Development Bank PLC recorded sound financial results for the first quarter ended 31 March

2020, prior to the onset of the COVID-19 pandemic which has subsequently led to exponential economic

stresses at home and the world over.

An unprecedented quarter marked by multiple challenges

With the heightened responsive measure of an island wide lockdown that was imposed only towards

the latter part of Q1, the impact of the COVID-19 pandemic was felt by the Sri Lanka economy since the

beginning of the first quarter of 2020 due to cascading effects on global supply chains and local business

operations. Furthermore, the blow from the pandemic came in less than 12 months since the Sri Lankan

economy plummeted due to Easter Sunday attacks in April 2019. The combined effects of all this has

caused tremendous impact on every sector in the economy with distinct impact on the banking sector as

well. In such a backdrop the Bank increased its operating income to LKR 6.6 Bn by 11%. Post-tax

profitability was LKR 1.7 Bn up by 27%, partly benefiting from tax removals introduced by the

Government. The Bank’s Balance Sheet also expanded by 4% to LKR 553 Bn, which translated to a

quantum increase of LKR 24 Bn.

Mr. Dimantha Seneviratne – Director/ Group Chief Executive Officer of NDB stated that the world is

currently experiencing the most dramatic economic downturn in its history caused by the COVID-19

pandemic, with distinct challenges posed on the financial services sector such as stressed liquidity,

capital adequacy, asset quality and profitability. He stated that it is a test for the sector to demonstrate

their adaptability, resilience, responsiveness and readiness in such crises. The situation demanded the

most prudent, strategic and skillful navigation by banking institutions which have a tremendous role to

play in support of the national economy whilst safeguarding the interests of the key stakeholders

including shareholders, customers and employees. Mr. Seneviratne went on to say that the NDB results

for Q1 2020 is a reflection of the Bank’s delivery of far-sighted strategies. Though we witnessed normal

volumes in Q1 up to mid-March, we continue to witness challenges in certain sectors, hence the need

for provision build-ups and getting adjusted to the new normal from Q2 onwards.

Furthermore, amidst disruptions to daily life, NDB continued its valid contribution to economic activities

by ensuring undisrupted banking services to its customers with highest standards in convenience and

safety. The Bank’s virtual platforms - NDB NOES mobile banking and online banking were accessible

24*7 whilst the branch network was open to customers in selected localities, fortified by the mobile

banking units. Team NDB stood up to the challenge of serving our customers through a combination of

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presence at branches/ service points and working from home, keeping up with the Bank’s spirit of

excellence in service delivery “We Go Beyond”. He conveyed his appreciation to employees at all levels

for their exemplary dedication in serving customers whilst going through many challenges during the

lockdown period.

Profitability

Total operating income which consists of Net Interest Income (NII), Net Fee and Commission income,

income from financial investments, Forex profits and other operating income increased by 11% YoY to

LKR 6.6 Bn. Net fee and commission income recorded an impressive increase of 19% to LKR 1 Bn

benefiting from the strong growth in the retail assets and liability base and uptake in digital financial

services. Net interest income [NII] was LKR 4.3 Bn, a negative growth of 7%, partly due to the increase in

interest expenses stemming from fresh quoted debentures issued in Q1 2019 and the reduction in

margins in line with regulatory policies. A narrowing net interest margin of 3.22% [compared to 3.53% in

2019] also contributed towards this dip in NII, which is a wider reflection of the drop in benchmark

market rates during the quarter. The significant increase in other operating income to LKR 835 Mn

attributed to exchange gains on the revaluation of the foreign currency reserves of the Bank. This was

due to the depreciation of the Sri Lankan Rupee in early 2020 - due to COVID-19 pandemic related

economic outcomes, in comparison to the appreciation of the Sri Lankan Rupee in the comparative

period in 2019.

The impairment charges for loans and other losses for Q1 2020 was LKR 1.3 Bn and was a 53% increase

over the comparative period. The increase in the impairment charges was mainly due to the increase in

the collective provision charge in line with the growth in the loan book. The Bank also accounted for

provisions at individual levels considering elevated risks due to stressed market conditions, which are

being reassessed with COVID-19 related stresses. Other provisions under impairment charges included

provisions made for permanent diminution in fair value of investments. The Bank’s regulatory non-

performing loan [NPL] ratio was 4.78% and compares with 4.77% as 31 December 2019 and 5.2% of the

industry for the period under review.

Total operating expenses for Q1 2020 was LKR 2.4 Bn, an increase of 8% from Q1 2019. The cost to

income ratio of the Bank was 36.5%, and compares well with 39.9% for 2019. The dynamic automations

and efficiency enhancing initiatives introduced by the Bank over 2018 and 2019, such as Robotic

Process Automation technology and work flow solutions, adoption of six sigma practices, installation of

new product management IT systems and upscaling the Bank’s digital banking infrastructure contributed

towards this relatively low cost to income ratio. These initiatives also stood the Bank in good stead

particularly during the recent lockdown periods, as same enabled seamless services at uncompromised

productivity levels with minimum staff involvement.

The total tax charge for Q1 2020 was LKR 1.2 Bn, comprising LKR 556 Mn in VAT on financial services and

LKR 631 Mn in Income Tax. The effective tax rate for Q1 2020 was41%, down from 53% in Q1 2019 due

3

to the removal of Nation Building Tax [NBT] and Debt Repayment Levy [DRL], w.e.f 01 January 2020. The

resultant profit attributable to shareholders at the Group level was LKR 1.2 Bn, a YoY increase of 23%.

Balance Sheet Growth and Funding

Whilst the total asset base at the Bank level stood at LKR 553 Bn, same of the NDB Group reached LKR

559 Bn. The Balance Sheet expansion was supported by a year-to-date [YTD] growth of 4% in the gross

loan book to LKR 425 Bn. The YoY growth of the loan book was 18%, which translated to an increase of

LKR 63.7 Bn. The focused and energetic business drive across all segments contributed towards the loan

book expansion despite the effects of the pandemic.

Balance Sheet expansion was funded by multiple sources including customer deposits and repo

borrowings. Customer deposits grew by 2% YTD to LKR 414 Bn, whilst this was a YoY growth of 18% over

Q1 2019 – a quantum growth of LKR 63 Bn. Within deposits, the CASA ratio remained at the 20% mark

with the CASA base recording a marginal increase of 2% YTD driven by granular CASA.

Capital Adequacy and Liquidity

The Bank remained well capitalized by the end of the quarter, with the capital adequacy ratios well

above the regulatory minimum requirement levels. Accordingly, Tier I and total capital ratios at the Bank

level were 9.03% and 12.96% whilst the same at the Group level were 9.88% and 13.65% [minimum

requirements of 8.5% and 12.5% respectively].

The Bank is also maintaining sound liquidity levels with Liquidity Coverage Ratios well above the

statutory minimum requirements. The Bank’s Net Stable Funding Ratio was 105%, well above the

regulator mandated minimum of 100%. These strong capital adequacy and liquidity levels are clear

affirmation of the Bank’s stability in the face of the ongoing crisis and its readiness and ability to steer

forward sustainably.

Investor returns

The Return on Average Shareholder Funds [ROE] for the Bank was of 14.99% [2019:13.73%] and the

Earnings per Share LKR 25.96 [2019: LKR 23.05] for Q1 2020. The same ratios for the Group were 11.38%

[2019: 11.59%] and LKR 21.48 [2019: LKR 21.53] respectively. Return [before tax] on Average Assets for

the Bank was 1.93% [2019: 2.01%] and for the Group was 1.47% [2019: 1.97%]. The net asset value per

share of the Bank was LKR 176.50 and compared with a closing share price for the quarter of LKR 66.20

[on 20 March 2020].

Way forward in a “new normal” defined by the pandemic

Commenting on the year ahead, the Director/ Group CEO Mr. Dimantha Seneviratne stated that the

economic toll from the COVID-19 pandemic will further deepen in the coming quarters and remain for

years ahead. Whilst the full financial impact stemming from same on the Bank is yet to be estimated,

the Bank remains committed to provide relief to all affected customers along with the debt moratorium,

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loans at concessionary rates and other means introduced by the Central Bank of Sri Lanka. Digital

banking will be the norm in the “new normal” in the aftermath of the pandemic, and NDB is at a strong

position in this aspect with the Bank’s dynamic digital banking avenues, particularly the upgraded NDB

NEOS mobile banking and online banking options, which saw a surge in transactions and volumes

recently.

We will revisit our business model, revise future forecasts and realign strategic resources in pursuit of

sound returns delivered to all our stakeholders in the coming months and beyond, whilst placing

digitization at core. We are assured that the expertise gathered over four decades as a prime banking

institution in the country who have withstood many economic cycles, the clear vision of the leadership

team and passion and competence of Team NDB will propel the Bank in making meaningful contribution

towards reviving the national economy at this juncture he stated.

On a final note, on behalf of the Bank, Mr. Seneviratne also expressed his gratitude towards the health

care services, tri-forces, the police and all other frontline service providers including banking and

financial services which made immense contribution in keeping the country safe and alive through the

pandemic.

NDB Bank is the Best Domestic Bank in Sri Lanka for 2020 as adjudged by the AsiaMoney Magazine for

the second consecutive year and the NDB Group has earned close to 50 awards in 2019, affirming its

excellence in multiple performance aspects.

5

Period Period Period Period

ended ended ended ended

31/03/2020 31/03/2019 Change 31/03/2020 31/03/2019 Change

LKR '000 LKR '000 % LKR '000 LKR '000 %

Gross Income 16,045,347 14,101,036 14 15,809,518 14,117,910 12

Interest Income 13,747,027 12,769,671 8 13,794,338 12,828,753 8

Interest Expenses 9,417,492 8,108,286 16 9,414,373 8,101,836 16

Net Interest Income 4,329,535 4,661,385 (7) 4,379,965 4,726,917 (7)

Net Fee and Commission Income 1,026,121 864,302 19 1,223,299 1,064,555 15

Net gain/(loss) from trading 213,444 356,335 (40) 213,444 356,335 (40)

Net gain/(loss) from financial investments at fair value Through

Profit or Loss 836 4,756 (82) (16,125) (11,882) (36)

Net gains/(losses) from derecognition of financial assets 223,273 61,918 261 217,996 61,836 253

Other operating income 834,645 44,053 1,795 376,566 (181,687) 307

Total Operating Income 6,627,854 5,992,750 11 6,395,145 6,016,074 6

Impairment charges

Individual Impairment 854,106 1,039,381 (18) 854,106 1,039,381 (18)

Collective Impairment 387,325 (243,127) 259 387,325 (243,127) 259

Other provisions - charge/(release) 45,159 45,368 - 42,964 159,613 (73)

1,286,590 841,621 53 1,284,395 955,867 34

Net operating income 5,341,264 5,151,129 4 5,110,750 5,060,207 1

Operating Expenses

Personnel Expenses 1,269,313 1,161,063 9 1,384,080 1,277,825 8

Depreciation and amortization 139,492 136,556 2 157,870 150,786 5

Other Expenses 1,008,053 934,369 8 1,102,040 1,035,197 6

Total operating expenses 2,416,858 2,231,989 8 2,643,990 2,463,808 7

Operating Profit Before tax on Financial Services 2,924,406 2,919,140 0 2,466,760 2,596,399 (5)

Less: Value Added Tax (VAT) on Financial services 556,333 489,000 14 556,333 489,000 14

Nation Building Tax (NBT) on Financial services - 66,127 (100) - 66,127 (100)

Debt Repayment Levy - 275,000 (100) - 275,000 (100)

Operating Profit After Tax on Financial Services 2,368,073 2,089,013 13 1,910,427 1,766,272 8

Share of associate companies' profits/(losses) - - - - - -

Profit Before Taxation 2,368,073 2,089,013 13 1,910,427 1,766,272 8

Less : Income tax expenses 631,289 716,200 (12) 654,860 741,016 (12)

Profit for the period 1,736,784 1,372,813 27 1,255,567 1,025,256 22

Profit Attributable to:

Equity Holders of the parent 1,736,784 1,372,813 27 1,242,717 1,007,871 23

Non Controlling Interests - - - 12,850 17,387 (26)

1,736,784 1,372,813 27 1,255,566 1,025,258 22

Basic Earnings per share (in LKR) 7.47 3.83 95 5.34 4.02 33

Diluted Earnings per share (in LKR) 7.47 3.83 95 5.34 4.02 33

Period Period Period Period

ended ended ended ended

31/03/2020 31/03/2019 Change 31/03/2020 31/03/2019 Change

LKR '000 LKR '000 % LKR '000 LKR '000 %

Profit for the period 1,736,784 1,372,813 27 1,255,566 1,025,258 22

Items that will be reclassified to Income Statement

Exchange differences on translation of foreign operations - - - 6,175 (17,112) 136

Net Gains/(losses) on Investments in debt Instruments measured at

fair value through other Comprehensive Income(16,696) 586,537 (103) (21,199) 610,338 (103)

Changes in Impairment allowance for Expected credit losses 14,470 (3,594) 503 14,470 104,363 (86)

Net Gains /(losses) on cash flow hedges 71,621 (192,136) 137 71,621 (192,136) 137

Less :Tax expense relating to items that will be reclassified to Income

Statements352,372 (499,638) 171 352,178 (505,871) 170

A 421,767 (108,831) 488 423,244 (418) 101,318

Items that will not be reclassified to Income Statement

Net Gains/(losses) on Investments in equity Instruments measured

at fair value through other Comprehensive Income(142,617) (244,155) 42 (142,617) (244,155) 42

B (142,617) (244,155) 42 (142,617) (244,155) 42

Total Other Comprehensive Income after Tax A + B 279,150 (352,986) 179 280,627 (244,573) 215

Total Comprehensive Income for the period 2,015,934 1,019,827 98 1,536,193 780,685 97

Attributable to:

Equity holders of the parent 2,015,934 1,019,827 98 1,522,485 766,139 99

Non Controlling Interests - - - 13,708 14,546 (6)

2,015,934 1,019,827 98 1,536,193 780,685 97

STATEMENT OF PROFIT OR LOSS

STATEMENT OF COMPREHENSIVE INCOME

Bank Group

6

Current Period Previous Period Current Period Previous Period

As at As at As at As at

31/03/2020 31/12/2019 Change 31/03/2020 31/12/2019 Change

(Audited) (Audited)

LKR '000 LKR '000 % LKR '000 LKR '000 %

Assets

Cash and cash equivalents 12,488,949 5,703,468 119 12,838,294 6,081,359 111

Balances with the Central Bank of Sri Lanka 11,238,609 13,886,575 (19) 11,238,609 13,886,575 (19)

Placements with banks 286,463 6,291,047 (95) 286,463 6,291,047 (95)

Derivative Financial Instruments 2,239,272 1,596,359 40 2,239,272 1,596,359 40

Financial assets recognized through profit or loss measured at fair value 261,529 932,253 (72) 2,811,060 3,488,735 (19)

Financial assets at amortised cost -loans and receivables to other customers 410,899,921 396,648,811 4 410,994,629 396,672,022 4

Financial assets at amortised cost - debt and other instruments 33,165,938 27,485,885 21 33,165,938 27,485,885 21

Financial assets measured at fair value through other comprehensive income 72,031,779 67,018,254 7 73,372,507 68,430,331 7

Investments in subsidiary companies 2,144,774 2,144,774 - - - -

Investment Property - - - 2,272,881 2,272,881 -

Intangible assets 661,133 687,785 (4) 675,158 700,908 (4)

Property, plant & equipment 2,954,088 3,012,213 (2) 3,490,636 3,565,166 (2)

Right to Use Assets 899,538 960,849 (6) 1,168,103 1,229,414 (5)

Current Tax Assets - - - 22,508 23,396 (4)

Deferred tax Assets 799,661 599,216 33 805,421 647,444 24 Other assets 3,263,284 2,626,940 24 3,298,153 3,228,104 2

Total assets 553,334,937 529,594,428 4 558,679,632 535,599,626 4

Liabilities

Due to Banks 31,241,196 18,380,356 70 31,241,196 18,380,356 70

Derivative Financial Instruments 1,355,576 728,873 86 1,355,576 728,873 86

Financial Liabilities at amortised cost -due to depositors 414,146,321 405,048,024 2 413,756,399 404,667,529 2

Financial Liabilities at amortised cost

- due to debt securities holders 3,439,705 1,398,068 146 3,439,705 1,398,068 146

- due to other borrowers 29,296,212 29,342,027 - 29,296,212 29,342,027 -

Debt securities issued 23,086,591 23,108,734 - 23,086,591 23,108,734 -

Retirement benefit obligations 600,752 583,933 3 725,763 718,983 1

Current Tax Liabilities 2,149,191 2,247,997 (4) 2,218,980 2,342,373 (5)

Deferred Tax Liabilities - - - 530,757 566,983 (6)

Other liabilities 6,837,858 9,197,775 (26) 7,272,373 9,732,266 (25)

Dividends payable 121,533 74,804 62 121,533 74,804 62

Total liabilities 512,274,936 490,110,591 5 513,045,085 491,060,996 4

Equity

Stated Capital 8,794,333 7,685,334 14 8,794,333 7,685,334 14

Statutory Reserve Fund 1,896,479 1,896,479 - 1,896,479 1,896,479 -

General Reserve 5,805,707 5,805,707 - 5,805,707 5,805,707 -

Retained Earnings 23,896,381 23,689,843 1 27,130,716 27,416,982 -

Other Reserves 667,100 406,472 64 838,830 578,848 45

Total shareholders' equity 41,060,000 39,483,835 4 44,466,065 43,383,350 2

Non Controlling Interests - - - 1,168,482 1,155,280 1

Total Equity 41,060,000 39,483,835 4 45,634,547 44,538,630 2

Total liabilities and equity 553,334,937 529,594,428 4 558,679,632 535,599,626 4

Net Book Value Per Share (LKR) 176.50 178.02 (1) 191.14 195.60 (2)

Contingent liabilities and commitments 295,925,389 293,145,821 295,923,497 293,267,959

Memorandum Information

Number of Employees 2,977 2,936

Number of Branches 113 112

Certification:We hereby certify that the above financial statements are in compliance with the requirements of the Companies Act No. 07 of 2007.

(Sgd.)

Suvendrini Muthukumarana

Vice President - Finance

We, the undersigned, being the Chairman and the Chief Executive Officer of National Development Bank PLC certify jointly that:

(a) The above statements have been prepared in compliance with the format and definitions prescribed by the Central Bank of Sri Lanka.

(b) The information contained in these statements have been extracted from the unaudited financial statements of the Bank unless indicated as audited.

(Sgd.) (Sgd.)

Eshana de Silva Dimantha Seneviratne

Director/Chairman Director/Group Chief Executive Officer

20 May 2020

BANK Group

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

7

Total

Statutory Reserve

Fund

Revaluation

ReserveFair Value Reserve

Cash Flow Hedge

ReserveGeneral Reserve Retained Earnings Total

Equity

LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000

BANK

Balance as at 1 January 2019 6,469,323 1,636,479 1,041,261 (1,022,229) 101,311 5,805,707 20,966,190 34,998,042 - 34,998,042

Transitional Impact on the adoption of SLFRS 9 - - - - - (252,677) (252,677) - (252,677)

Restated opening balance under SLFRS 9 6,469,323 1,636,479 1,041,261 (1,022,229) 101,311 5,805,707 20,713,513 34,745,366 - 34,745,366

Total Comprehensive Income for the period

Profit for the period - - - - - 1,372,813 1,372,813 - 1,372,813

Other Comprehensive Income before Tax - - - 338,788 (192,136) - - 146,652 - 146,652

Tax on Other Comprehensive Income - - - (499,638) - - - (499,638) - (499,638)

Total Comprehensive Income for the period - - - (160,850) (192,136) - 1,372,813 1,019,827 - 1,019,826

Transactions with equity holders

Final Dividend for year 2018-Scrip 1,216,012 - - - - - (1,367,061) (151,049) - (151,049)

Final Dividend for year 2018 - Cash - - - - - - (311,106) (311,106) - (311,106)

Balance as at 31 March 2019 7,685,335 1,636,479 1,041,261 (160,850) (90,825) 5,805,707 20,408,156 35,303,037 - 35,303,033

Balance as at 1 January 2020 7,685,334 1,896,479 1,262,453 (854,367) (1,614) 5,805,707 23,689,842 39,483,834 - 39,483,835


Profit for the period - - - - - 1,736,784 1,736,784 - 1,736,784

Other Comprehensive Income before Tax - - - (159,313) 71,621 - 14,470 (73,223) - (73,223)

Tax on Other Comprehensive Income - - - 348,320 - - 4,052 352,372 - 352,372

Total Comprehensive Income for the period - - - 189,007 71,621 - 1,755,306 2,015,934 - 2,015,934


Final Dividend for year 2018- Scrip 1,108,999 - - - - - (1,108,999) (0) - (0)

Final Dividend for year 2018- Cash - - - - - - (439,769) (439,769) - (439,769)

Balance as at 31 March 2020 8,794,333 1,896,479 1,262,453 (665,360) 70,007 5,805,707 23,896,381 41,060,000 - 41,060,000

STATEMENT OF CHANGES IN EQUITY

For the year ended 31 MarchStated Capital

Non Controlling

Interests

Other Reserves

8

Total

Statutory Reserve

Fund

Revaluation

ReserveFair Value Reserve

Cash Flow Hedge

ReserveGeneral Reserve Retained Earnings Total

Equity

LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000

GROUP

Balance as at 1 January 2019 6,469,323 1,636,479 1,166,840 (1,029,596) 101,311 5,805,707 24,862,382 39,012,446 1,099,042 40,111,488

Transitional Impact on the adoption of SLFRS 9 - - - - - - (258,319) (258,319) (6) (258,326)

Restated opening balance under SLFRS 9 6,469,323 1,636,479 1,166,840 - 101,311 5,805,707 24,604,063 38,754,127 1,099,036 39,853,162


Profit for the period - - - - - - 1,007,871 1,007,871 17,387 1,025,258

Other Comprehensive Income before Tax - - - 470,547 (192,136) - (14,271) 264,140 (2,841) 261,299

Tax on Other Comprehensive Income - - - (505,871) - - - (505,871) - (505,871)

Total Comprehensive Income for the period - - - (35,325) (192,136) - 993,600 766,138 14,546 780,685


Final Dividend for year 2018-Scrip 1,216,012 - - - - - (1,367,061) (151,049) - (151,049)

Final Dividend for year 2018 - Cash - - - - - - (311,106) (311,106) - (311,106)

Dividend attributable to non controlling interest - - - - - - - - (384) (384)

Balance as at 31 March 2019 6,469,323 1,636,479 1,166,840 (35,325) (90,825) 5,805,707 23,919,495 39,058,110 1,113,204 40,171,307

Balance as at 1 January 2020 7,685,334 1,896,479 1,405,671 (825,209) (1,613) 5,805,707 27,416,982 43,383,350 1,155,280 44,538,630


Profit for the period - - - - - - 1,242,717 1,242,717 12,850 1,255,567

Other Comprehensive Income before Tax - - - (163,817) 71,621 - 19,786 (72,410) 859 (71,551)

Tax on Other Comprehensive Income - - - 352,178 - - - 352,178 - 352,178

Total Comprehensive Income for the period - - - 188,361 71,621 - 1,262,503 1,522,485 13,709 1,536,193


Final Dividend for year 2018- Scrip 1,108,999 - - - - - (1,108,999) - - -

Final Dividend for year 2018- Cash - - - - - - (439,769) (439,769) - (439,769)

Dividend attributable to non controlling interest - - - - - - - - (507) (507)

Balance as at 31 March 2020 8,794,333 1,896,479 1,405,671 (636,848) 70,007 5,805,707 27,130,716 44,466,065 1,168,482 45,634,547

For the year ended 31 MarchStated Capital

Non Controlling

Interests

STATEMENT OF CHANGES IN EQUITYOther Reserves

9

For the period ended 31 March 2020 2019 2020 2019

LKR '000 LKR '000 LKR '000 LKR '000

CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 11,711,238 12,643,569 11,774,798 12,691,400

Fee based income received 1,026,154 865,122 1,262,734 1,045,035

Dividend income received 19,101 7,639 24,731 17,571

Other Operating income received 350,369 120,878 353,623 121,106

Interest paid (9,491,709) (6,982,721) (9,527,399) (6,992,159)

Personnel costs paid (1,277,213) (1,129,314) (1,334,103) (1,232,832)

Other expenses paid (1,348,694) (713,549) (1,433,044) (849,091)

Operating Profit before changes in operating assets and liabilities 989,247 4,811,624 1,121,341 4,801,030

(Increase )/decrease in operating assets

Deposits held for regulatory or monitory control purposes 2,647,966 2,347,000 2,647,966 2,347,000

Financial Assets at amortised cost -loans and receivables to other customers (13,139,439) (6,843,327) (13,139,439) (6,843,327)

Net (increase)/decrease in operating assets (1,620,474) (634,218) (1,367,474) (692,008)

(Increase )/decrease in operating liabilities

Financial liabilities at amortised cost - due to depositors 8,790,851 3,118,437 8,790,851 3,118,437

Financial liabilities at amortised cost - due to debt securities holders (4,744,711) (3,280,560) (4,744,711) (3,280,560)

Net increase/(decrease) in other liabilities 703,505 (1,785,242) 220,744 (1,775,857)

Net cash generated from operating activities before taxation (6,373,055) (2,266,286) (6,470,722) (2,325,285)

Tax on Financial Services paid (426,446) (404,502) (426,446) (412,020)

Income taxes paid (578,168) (348,672) (634,488) (350,488)

Net cash provided by/(used in) operating activities (7,377,669) (3,019,460) (7,531,656) (3,087,793)

CASH FLOWS FROM INVESTING ACTIVITIES

Net changes in financial Investments (10,517,010) (7,860,803) (10,392,502) (7,996,658)

Purchase of Intangible assets (7,145) - (7,145) -

Purchase of property, plant & equipment (55,587) (204,363) (56,885) (206,472)

Proceeds from sale of property, plant & equipment 819 83 3,050 1,233

Net cash (used in) from investing activities (10,578,923) (8,065,083) (10,453,482) (8,201,897)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds/(Repayment of other borrowings 19,181,088 9,501,407 19,181,088 9,501,407

Dividends paid to non-controlling interests - - - (384)

Dividends paid to shareholders of the Bank (443,599) (290,411) (443,599) (290,411)

Net cash provided by /(used in) financing activities 18,737,489 9,210,996 18,737,489 9,210,612

NET INCREASE IN CASH

AND CASH EQUIVALENTS 780,897 (1,873,547) 752,351 (2,079,078)

CASH AND CASH EQUIVALENTS

AT THE BEGINNING OF THE YEAR 11,994,515 21,774,885 12,372,406 22,308,744

CASH AND CASH EQUIVALENTS

AT THE END OF THE PERIOD 12,775,412 19,901,338 13,124,757 20,229,666

RECONCILIATION OF CASH AND CASH EQUIVALENTS

Cash and cash equivalents 12,488,949 6,207,158 12,838,294 6,535,486

Placements with banks 286,463 13,694,180 286,463 13,694,180

12,775,412 19,901,338 13,124,757 20,229,666

BANK GROUP

STATEMENT OF CASH FLOW

10

For the period ended 31 March

2020 2019 2020 2019 2020 2019 2020 2019 2020 2019

LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000 LKR '000

Revenue

Interest Income 13,747,027 12,769,671 44,191 52,632 - - - - 13,791,218 12,822,303

Net Fee and Commission Income 1,026,121 864,302 106,326 105,691 50,237 39,762 32,429 38,568 1,215,114 1,048,323

Net gain/(loss) from trading 213,444 356,335 - - - - - - 213,444 356,335

836 4,756 (16,961) (16,638) - - - - (16,125) (11,882)

Net gains/(losses) from derecognition of financial assets 223,273 61,918 (5,277) (82) - - - - 217,996 61,836

Other Operating Income 373,829 (265,982) 2,737 84,295 - (362) - - 376,566 (182,049)

Total revenue from external customers 15,584,530 13,791,000 131,017 225,899 50,238 39,400 32,429 38,568 15,798,214 14,094,866

Inter-segment Revenue - - 552 9,956 10,722 13,088 - - 11,274 23,044

Total Revenue 15,584,530 13,791,000 131,569 235,855 60,960 52,488 32,429 38,568 15,809,518 14,117,910

Impairment (charge )/reversal for

loans & other losses (1,286,590) (750,886) 2,195 (114,245) - - - - (1,284,395) (865,131)

Segment expenses (11,831,231) (10,424,560) (186,982) (198,908) (10,363) (3,447) (29,789) (29,466) (12,058,363) (10,656,381)

Total segment expenses (13,117,821) (11,175,446) (184,787) (313,153) (10,363) (3,447) (29,789) (29,466) (13,342,759) (11,521,513)

Segment results 2,466,710 2,615,553 (53,218) (77,299) 50,596 49,041 2,641 9,101 2,466,759 2,596,397

Income tax expenses - - - - 654,860 741,016

Taxes on financial services - - - - 556,332 830,123

Profit after taxation 1,255,566 1,025,259

Other information

Segment assets 552,869,960 482,288,395 3,118,182 3,151,534 2,558,456 2,443,220 133,040 99,597 558,679,638 487,982,746

Consolidated total assets 558,679,633 478,428,205

Segment liabilities 511,826,035 446,948,648 567,700 291,439 634,055 556,354 17,295 14,999 513,045,085 447,811,441

Consolidated total liabilities 513,045,085 447,811,441

Segmental Cash flows

Cash flows from operating activities (7,377,669) (3,019,460) (171,940) (14,624) 6,493 (12,106) 11,460 (41,603) (7,531,656) (3,087,793)

Cash flows from investing activities (10,578,923) (8,065,083) 126,107 (229,717) (640) 11,667 (26) 81,236 (10,453,482) (8,201,897)

Cash flows from financing activities 18,737,489 9,210,996 - (384) - - - - 18,737,489 9,210,612

Net gain/(loss) from financial investments at fair value

Through Profit or Loss

Property Investment Others

SEGMENTAL ANALYSIS- GROUP

ConsolidatedBanking Capital Markets

11

At fair value through At amortised At fair value through Others Total

ASSETS profit or loss cost Other comprehensive income

Cash and cash equivalents - 12,488,949 - - 12,488,949

Balances with the Central Bank of Sri Lanka - 11,238,609 - - 11,238,609

Placements with banks - 286,463 - - 286,463

Derivative Financial Instruments 2,239,272 - - - 2,239,272

Financial assets recognized through profit or loss measured at fair

value 261,529 - - - 261,529

Financial assets at amortised cost -loans and receivables to other

customers - 410,899,921 - - 410,899,921

Financial Assets at amortised cost - debt and other instruments - 33,165,938 - - 33,165,938

Financial assets measured at fair value through other

comprehensive income - - 72,031,779 - 72,031,779

Other Financial Assets - 496,647 - - 496,647

Total Financial Assets 2,500,801 468,576,528 72,031,779 - 543,109,106

At fair value through Amortized cost Others Total

LIABILITIES profit or loss

Due to Banks - 31,241,196 - 31,241,196

Derivative Financial Instruments 1,355,576 - - 1,355,576

Financial Liabilities at amortised cost -due to depositors - 414,146,321 - 414,146,321


- due to debt securities holders - 3,439,705 - 3,439,705

- due to other borrowers - 29,296,212 - 29,296,212

Debt securities issued - 23,086,591 - 23,086,591

Other Financial Liabilities - 2,004,959 - 2,004,959

Total Financial Liabilities 1,355,576 503,214,984 - 504,570,561





Placements with banks - 286,463 - - 286,463


Financial assets recognized through profit or loss measured at fair

value 2,811,060 - - - 2,811,060

Financial assets at amortised cost -loans and receivables to other

customers - 410,994,629 - - 410,994,629

Financial Assets at amortised cost - debt and other instruments - 33,165,938 - - 33,165,938

Financial Assets measured at fair value through

Other comprehensive income - - 73,372,507 - 73,372,507





Due to Banks - 31,241,196 - 31,241,196

Derivative Financial Instruments 1,355,576 - - 1,355,576







Total Financial Liabilities 1,355,576 502,837,213 - 504,192,789

MEASUREMENT OF FINANCIAL INSTRUMENTS AS AT 31 MARCH 2019 - BANK (LKR '000)

MEASUREMENT OF FINANCIAL INSTRUMENTS AS AT 31 MARCH 2020 - GROUP (LKR '000)

12





Placements with banks - 6,291,047 - - 6,291,047


Financial Assets measured at fair value through profit or loss 932,253 - - - 932,253

Financial Assets at amortised cost -loans and advances - 396,648,811 - - 396,648,811

Financial Assets at amortised cost - debt instruments - 27,485,885 - - 27,485,885


comprehensive income - - 67,018,254 - 67,018,254





Due to Banks - 18,380,356 - 18,380,356

Derivative Financial Instruments 728,873 - - 728,873







Total Financial Liabilities 728,873 480,028,220 - 480,757,092





Placements with banks - 6,291,047 - - 6,291,047


Financial Assets measured at fair value through profit or loss 3,488,735 - - - 3,488,735

Financial Assets at amortised cost -loans and advances - 396,672,022 - - 396,672,022

Financial Assets at amortised cost - debt instruments - 27,485,885 - - 27,485,885


comprehensive income - - 68,430,331

- 68,430,331





Due to Banks - 18,380,356 - 18,380,356

Derivative Financial Instruments 728,873 - - 728,873







Total Financial Liabilities 728,873 479,695,464 - 480,424,337

MEASUREMENT OF FINANCIAL INSTRUMENTS AS AT 31 DECEMBER 2019 - BANK (LKR '000)

MEASUREMENT OF FINANCIAL INSTRUMENTS AS AT 31 DECEMBER 2019 - GROUP (LKR '000)

13

Notes to the Financial Statements

1 The figures are extracted from the unaudited financial statements.

2. The accounting policies and methods of computation are consistent with those followed during the previous financial year.

2

3

4

5 Fair Valuation of Foreign Currency Denominated Government Bonds

6 Amendments to the Income Tax Law Announced by the Government

7

The financial statements of the Bank and the Group have been prepared based on the accounting policies and methods which have been revised in line with the requirements of SLFRS 9 -

Financial Instruments as published in the last year Annual Report. These Financial Statements also comply with Sri Lanka Accounting Standard 34- "Interim Financial Reporting".

On 18 February 2020, the Bank paid a first and final dividend of LKR 7.00 per share comprising of a cash dividend of LKR 2.00 per share and a scrip dividend of LKR 5.00 per share, for the

financial year 2019. As per the Notice dated 18 February 2020 published by the Department of Inland Revenue, the above dividend payment was not subject to withholding tax.

Accordingly, the stated capital of the Bank as at 31 March 2020 increased to LKR 8,794 Mn (LKR 7,685 Mn as at 31 December 2019), as a result of the scrip dividends declared for the year

ended 31 December 2019.

The Covid19 pandemic has led to the most severe global economic downturn in world history. Lockdown measures of varying intensities imposed across many countries,

with the aim of curbing the virus spread, has affected business activities causing mammoth losses, unemployment and other economic implications. The same scenario

prevailed in Sri Lanka, where business operations across a large number of industries were affected, with direct and indirect impact on the banking industry.

While considering such potential impact of COVID 19 pandemic on economy, the government of Sri Lanka issued circulars introducing relief measures to assist COVID 19

affected businesses and individuals in the form of deferment of repayment terms of credit facilities, concessionary interest rates for selected lending products and waiving

off certain charges and fees.

Impact to Financial Statements due to COVID 19 pandemic

There are no other events that require adjustment to the Financial Statements or disclosure in the Financial Statements that has occurred subsequent to the date of the Statement of the

Financial Position of the Bank and the Group .

The proposed relief measures and other implications of COVID -19 could have a negative impact on banks’ net interest income, fee & commission income and the

impairment provisions in future reporting periods. Given that eligible borrowers could apply for reliefs from the banks till 15th May 2020, the Bank is unable to estimate the

potential impact of the outbreak as at the reporting date. At the moment, the Bank is in the process of evaluating the possible ways of providing such reliefs to our

customers.

However, the Management is of the view that these implications are unlikely to unduly stress the Bank’s capital or liquidity levels. The Bank is presently well above the

regulatory minimum ratios required for both capital and liquidity.

The Cabinet has approved to reduce the income tax rate applicable to banks by 4% from the tax rate of 28% with effect from 1st January 2020. However the said

amendment is yet to be legalized. As such the Bank continued using 28% in calculating the income tax and deferred tax liabilities/assets as at 31st March 2020 as this

amendment is not substantively enacted by the end of the reporting period. Had the Bank applied the reduced income tax rate of 24% to calculate income tax and deferred

tax assets/liabilities as at 31st March 2020, total income tax expense (current and deferred tax) for the quarter ended 31st March 2020 would have been increased by

Rs.3.6Mn.Further the deferred tax on the items that are routed through other comprehensive income would have been reduced by Rs. 40Mn. The overall Balance Sheet

impact would have been a reduction of LKR 43.7 Mn.

Subsequent to the outbreak of COVID 19 in Sri Lanka, the Bank has strictly adhered to the guidelines and directions issued by both Government and Central Bank of Sri

Lanka (CBSL) when conducting its business operations.

The Bank carries foreign currency denominated government bonds (Sovereign Bonds) amounting to LKR 9.3 Bn which are classified under fair value through OCI. However,

due to the volatility in the financial markets and significant decrease in the value and level of activities since March 2020, the Bank is of the view that the prices observed as

at March 31, 2020, do not reflect fair value as at March 31, 2020. Accordingly, the Bank considered the prices prevailed as at end February 2020, for the fair valuation of

foreign currency denominated government bonds.

14

Notes to the Financial Statements

8. ANALYSIS OF LOANS & ADVANCES,COMMITMENTS,CONTINGENCIES AND IMPAIRMENT AS AT 31 MARCH 2020


8.1 Product wise Gross Loans and Receivables 31/03/2020 31/12/2019 31/03/2020 31/12/2019

LKR '000 LKR '000 LKR '000 LKR '000

By product-Domestic Currency

Term loans 117,548,602 112,966,347 117,548,602 112,966,349

Medium and short term loans 46,691,552 45,889,420 46,691,552 45,889,420

Overdrafts 48,851,042 50,324,543 48,849,702 50,255,807

Trade Finance 16,006,284 16,111,316 16,006,284 16,111,316

Consumer loans 39,923,796 37,915,878 39,923,796 37,915,878

Lease rentals receivable 27,714,966 25,842,041 27,714,966 25,842,041

Housing loans 16,309,099 15,860,023 16,309,099 15,860,023

Islamic Banking facilities 9,261,378 8,742,843 9,261,378 8,742,843

Credit cards 6,802,297 6,212,728 6,802,297 6,212,728

AF Loans 3,815,963 3,760,515 3,815,963 3,760,515

Staff loans 2,025,722 1,970,459 2,121,771 2,062,404

Pawning 1,331,988 1,117,274 1,331,988 1,117,274

Hire Purchase 11,618 13,156 11,618 13,156

Sub total 336,294,309 326,726,543 336,389,018 326,749,754

By product-Foreign Currency

Term loans 8,038,747 7,519,992 8,038,747 7,519,992

Overdrafts 3,873,012 3,178,970 3,873,012 3,178,970

Medium and short term loans 43,100,488 40,777,560 43,100,488 40,777,560

Trade Finance 29,450,950 27,246,038 29,450,950 27,246,038

Islamic Banking facilities 3,877,844 3,741,555 3,877,844 3,741,555

Housing loans 53,544 30,773 53,544 30,773

Sub total 88,394,584 82,494,889 88,394,584 82,494,889

Total 424,688,894 409,221,432 424,783,602 409,244,643


8.2 Product wise commitments and contingencies considered for Impairment 31/03/2020 31/12/2019 31/03/2020 31/12/2019

By product- Domestic Currency LKR '000 LKR '000 LKR '000 LKR '000

Guarantees 23,534,643 29,728,454 23,534,643 29,728,454

Performance Bonds 9,372,693 8,860,859 9,372,693 8,860,859

Documentary Credits 124,157 191,484 124,157 191,484

Acceptances 14,038 100,110 14,038 100,110

Undrawn commitments 115,097,893 109,734,383 115,097,893 109,734,383

Sub Total 148,143,423 148,615,290 148,143,423 148,615,290

By product- Foreign Currency

Guarantees 13,163,008 10,832,955 13,163,008 10,832,955

Performance Bonds 7,001,226 6,428,518 7,001,226 6,428,518

Documentary Credits 8,167,526 10,683,864 8,167,526 10,683,864

Acceptances 8,989,561 8,659,851 8,989,561 8,659,851

Undrawn commitments 1,034,067 1,352,426 1,034,067 1,352,426

Sub Total 38,355,388 37,957,614 38,355,388 37,957,614

Total 186,498,811 186,572,904 186,498,811 186,572,904


31/03/2020 31/12/2019 31/03/2020 31/12/2019

LKR '000 LKR '000 LKR '000 LKR '000

Gross loans and advances ,Commitments and Contingencies 611,187,705 595,794,336 611,282,413 595,817,547

(Less): Accumulated impairment under stage 1 2,990,888 2,682,507 2,109,766 2,682,507

Accumulated impairment under stage 2 2,034,932 1,674,451 2,482,152 1,674,451

Accumulated impairment under stage 3 8,763,154 8,215,663 5,790,794 8,215,662

Net value of loans and advances, commitments and contingencies 597,398,731 583,221,714 600,899,701 583,244,927

GroupBank

GroupBank

15

Group


31/03/2020 31/12/2019 31/03/2020 31/12/2019

8.3 Movement of impairment during the period LKR '000 LKR '000 LKR '000 LKR '000

Under stage 1

Balance at 1 January 2,682,507 1,801,385 1,801,385 1,801,385

Charge/(Write back) to Statement of Profit or Loss 308,381 881,122 308,381 881,122

Write-off during the period - -

Closing balance 2,990,888 2,682,507 2,109,766 2,682,507

Under stage 2


Charge/(Write back) to Statement of Profit or Loss 360,481 (447,220) 360,481 (447,220)

Write-off during the period - -

Closing balance 2,034,932 1,674,451 2,482,152 1,674,451

Under stage 3


Charge/(Write back) to Statement of Profit or Loss 572,569 3,235,143 572,569 3,235,143

Write-off during the period (25,078) (388,106) (25,078) (388,106)

Other movement - 125,321 - 125,321

Closing balance 8,763,154 8,215,663 5,790,794 8,215,662

8.4 Movements in Individual and Collective Impairment during the period for Loans

and Receivables to Other Customers


31/03/2020 31/12/2019 31/03/2020 31/12/2019

LKR '000 LKR '000 LKR '000 LKR '000

Individual impairment



Write-off during the period (25,078) (219,093) (25,078) (219,093)

Other movement - 125,321 - 125,321

Closing balance 6,346,495 5,517,467 6,346,495 5,517,467

Collective impairment



Write-off during the Period - (169,013) - (169,013)

Closing balance 7,442,478 7,055,153 7,442,478 7,055,153

Total impairment 13,788,973 12,572,620 13,788,973 12,572,620

9. ANALYSIS OF DEPOSITS

Due to Other Customers - By product As at As at As at As at

31/03/2020 31/12/2019 31/03/2020 31/12/2019

LKR '000 LKR '000 LKR '000 LKR '000

By product-Domestic Currency

Demand deposits 19,278,977 20,675,504 19,261,512 20,720,171

Savings deposits 41,194,401 39,849,785 41,177,239 39,807,361

Time deposits 259,650,093 257,721,796 259,294,799 257,340,112

Other deposits 445,234 652,261 445,234 652,261

Sub total 320,568,705 318,899,346 320,178,783 318,519,904

By product- Foreign Currency

Demand deposits 6,321,860 4,582,635 6,321,860 4,582,635

Savings deposits 15,029,769 15,448,039 15,029,769 15,446,986

Time deposits 72,065,451 65,934,145 72,065,451 65,934,145

Other deposits 160,536 183,859 160,536 183,859

Sub total 93,577,616 86,148,678 93,577,616 86,147,625

Total 414,146,321 405,048,024 413,756,399 404,667,529

Bank

GroupBank

GroupBank

16

Selected Performance Indicators (As per regulatory Reporting)As at As at As at As at

31/03/2020 31/12/2019 31/03/2020 31/12/2019

Regulatory Capital Adequacy (LKR ’000)

Common Equity Tier 1 Capital 36,199,004 34,909,032 40,477,037 39,563,816

Tier 1 Capital 36,199,004 34,909,032 40,477,037 39,563,816

Total Capital 51,963,045 51,090,032 55,917,523 55,320,388

Regulatory Capital Ratios (%)

Common Equity Tier 1 Capital Ratio (Minimum Requirement - 6.5% (2019 - 7%)) 9.03 9.18 9.88 10.15

Tier 1 Capital Ratio (Minimum Requirement - 8.0% (2019 - 8.5%)) 9.03 9.18 9.88 10.15

Total Capital Ratio (Minimum Requirement - 12.0% (2019 -12.5%)) 12.96 13.43 13.65 14.20

Leverage Ratio ( Minimum Requirement - 3%) 5.99 6.09 6.62 6.81

Regulatory Liquidity

Statutory Liquid Assets (LKR’000) 113,353,332 106,381,911 113,353,332 106,381,911

Statutory Liquid Assets Ratio ( Minimum Requirement -20%)

Domestic Banking Unit (%) 21.37 20.93 21.37 20.93

Off-Shore Banking Unit (%) 23.99 24.78 23.99 24.78

Total stock of high quality liquid assets (LKR ' 000) - All currency 82,465,671 75,511,819 82,465,671 75,511,819

Total stock of high quality liquid assets (LKR ' 000) - Rupee 69,865,104 66,143,681 69,865,104 66,143,681

Liquidity Coverage Ratio (%) – Rupee (Minimum Requirement - 100% (2019-100%)) 170.08 162.42 170.08 162.42

Liquidity Coverage Ratio (%) – All Currency (Minimum Requirement -100% (2019-100%)) 161.08 153.26 161.08 153.26

Net stable Funding Ratio (%) ( Minimum Requirement- 100%) 105.28 108.92 105.28 108.92

Asset Quality ( Quality of Loan Portfolio)

Gross Non-performing Advances Ratio (%) 4.78 4.77 4.78 4.77

Net Non-performing Advances Ratio (%) 3.14 3.18 3.14 3.18

Profitability

Earnings Per Share (annualised ) (LKR) 25.96 23.05 21.48 21.53

Return on Average Shareholders' Funds (%) 14.99 13.73 11.38 11.59

Return on Average Assets ((after Tax (%)) 1.12 1.02 0.91 0.94

Return on Average Assets ((before Tax (%)) 1.93 2.01 1.47 1.97

Net interest margin (%) 3.22 3.53 3.22 3.54

Debt Security - Related Ratios

Interest Cover (Times) 1.46 1.50 1.47 1.51

Debt to Equity (Times) 12.21 12.09 11.26 10.99

GROUPBANK

17

SHARE PRICE

As at 31/03/2020 31/12/2019

Number of shares 232,637,231 221,799,756

Last traded price (LKR) ** 66.20 100.00

For the quarter ended 31/03/2020 31/12/2019

Highest price per share (LKR) 104.00 112.00

Lowest price per share (LKR) 65.00 97.50

TOP 20 LARGEST SHARE HOLDERS OF NATIONAL DEVELOPMENT BANK PLC AS AT 20.03.2020

NAME NO OF SHARES %

1 EMPLOYEES PROVIDENT FUND 23,263,721 10.00

2 BANK OF CEYLON NO. 1 ACCOUNT 19,454,400 8.36

3 SRI LANKA INSURANCE CORPORATION LTD-GENERAL FUND 14,875,617 6.39

4 SRI LANKA INSURANCE CORPORATION LTD-LIFE FUND 12,367,328 5.32

5 DR. S.YADDEHIGE 10,160,638 4.37

6 SOFTLOGIC LIFE INSURANCE PLC ACCOUNT NUMBER 03/LIFE SHAREHOLDERS FUND 9,702,577 4.17

7 EMPLOYEES TRUST FUND BOARD 9,054,503 3.89

8 PERPETUAL TREASURIES LIMITED 8,736,886 3.76

9 RICHARD PIERIS AND CO LTD - ACCOUNT NO. 01 8,106,626 3.48

10BNYMSANV RE-LF RUFFER INVESTMENT FUNDS : LF RUFFER PACIFIC AND EMERGING MARKETS

FUND7,684,594

3.30

11 HATTON NATIONAL BANK PLC A/C NO 1 6,784,942 2.92

12 PHOENIX VENTURES PRIVATE LIMITED 6,769,999 2.91

13 RUSH JAPAN CORPORATION 6,724,630 2.89

14 SBI VEN HOLDINGS PTE LTD 5,941,696 2.55

15 MR. A.K.PATHIRAGE 3,529,367 1.52

16 ASIRI SURGICAL HOSPITAL PLC 3,470,389 1.49

17 AKBAR BROTHERS PVT LTD A/C NO 1 3,453,692 1.48

18 DFCC BANK PLC A/C 1 3,168,904 1.36

19 MR. M.J.FERNANDO 2,727,800 1.17

20 PERPETUAL EQUITIES (PRIVATE) LIMITED 2,532,828 1.09

PUBLIC HOLDING PERCENTAGE

As at 31/03/2020

Float adjusted Market Capitalization in LKR 14,031,472,713

Percentage of shares held by the public 91.11%

Number of public shareholders 9,542

Option under which the Bank complies with the minimum Public Holding requirement Option 1

DIRECTORS INTEREST IN SHARES OF NDB AS AT 20.03.2020

NAME NO OF SHARES

K D W RATNAYAKA -

P L D N SENEVIRATNE 17,697

D M R PHILLIPS, PC -

N S S COORAY -

B S SINNIAH -

DR. D N PANDITARATNE -

S MUDALIGE -

MS. H KALUTHANTRI -

SHARE INFORMATION

** The last traded share price represents the share price as at 20th March 2020 which in effect was the last traded date of the CSE before the

quarter end. Due to the COVID 19 pandemic, CSE was closed from 20th March 2020 to 06th May 2020. It should be further noted that an

active market may not have existed on the last traded date due to the uncertain conditions that may have prevailed at that time. Therefore

the last traded share price may not be an accurate representation of the fair value of the Bank's shares as at that date.

18

Type of Debenture CSE Interest payable Balance as at Market Value Interest rate

Listing frequency 31 March 2020 Highest Lowest Quarter end Coupon Rate Effective Annual of comparable Interest Yield Yield To Maturity

LKR mn LKR LKR LKR % Yield % Govt. Security % % %

Fixed rate - Debenture March 2019

A - Mar 2019/Mar 2024 Listed Semi-annually 1,243 13.50 13.16 14.05

B - Mar 2019/Mar 2024 Listed Annually 4,318 99.99 99.99 99.99 13.95 13.15 13.90

Fixed rate - Debenture June 2015

B - Jun 2015/Jun 2020

Listed

Payable on date

of redemption1,914 97.34 97.34 97.34

9.4 annual

compounding on

the Issue Price of Rs.

63.8136 9.18 8.30

Fixed rate - Debenture December 2013

C - Dec 2013/Dec 2023 Listed Annually 3,638 13.90 13.17 9.75 13.3 13.3

D - Dec 2013/Dec 2025 Listed Annually 3,590 14.00 13.26 9.75

Total Debentures 21,704

INFORMATION ON DEBENTURES- BANK

Interest Rate Other ratios as at last trade

Not traded during the quarter

A - Jun 2015/Jun 2020 8.30 Listed Annually 7,000 9.40 9.19Not traded during the quarter Not traded during the quarter

Not traded during the quarter Not traded during the quarter



Not traded during the quarter Not traded during the quarter

19

Disclosures regarding the utilization of funds as per the objectives stated in the Debenture Prospectus

Debenture Issue - March 2019

Objective

numberObjective as per Prospectus

Amount

allocated as per

Prospectus in

LKR

Proposed

date of

utilization as

per

Prospectus

Amount

allocated from

proceeds in

LKR (A)

% of total

proceeds

Amount

utilized in LKR

(B)

% of

utilization

against

allocation

(B/A)

Clarification if not fully utilized

including where the funds are invested

1

Improve and further strengthen the

Capital Adequacy Ratio in the light of

the new regulatory requirements

introduced in line with the Basel III

accord

5,561,200,000 NA 5,561,200,000 100% 5,561,200,000 100% -

2Facilitate future expansion of business

activities of the Bank5,561,200,000 NA 5,561,200,000 100% 5,561,200,000 100% -

Debenture Issue - June 2015

Objective


Amount

allocated as per

Prospectus in

LKR

Proposed

date of

utilization as

per

Prospectus

Amount

allocated from

proceeds in

LKR (A)

% of total

proceeds

Amount

utilized in LKR

(B)

% of

utilization

against

allocation

(B/A)



1

Strengthen the Tier II Capital Base of

the Bank and maintain the Capital

Adequacy requirements to facilitate

future growth of the lending portfolio

of the Bank

NA 100% 8,914,408,000 100% -

2

To mobilize/ raise medium term funds

to match medium term lending of the

Bank

NA 100% 10,000,000,000 100% -

3

To minimize the interest rate risk rate

risk and manage the gap exposures of

the Bank’s assets and liabilities

NA 100% 10,000,000,000 100% -

Debenture Issue - December 2013

Objective


Amount

allocated as per

Prospectus in

LKR

Proposed

date of

utilization as

per

Prospectus

Amount

allocated from

proceeds in

LKR (A)% of total

proceeds

Amount

utilized in LKR

(B)

% of

utilization

against

allocation

(B/A)



1

Strengthen the Tier II Capital Base of

the Bank and maintain the Capital

Adequacy requirements in line with

the Bank's future expansion of

operations and the asset base, and

facilitate the future expansion of

business activities.

NA 100% 10,000,000,000 100% -

2

To mobilize/ raise medium term funds

to match medium term lending of the

Bank

NA 100% 10,000,000,000 100% -

3

To minimize the interest rate risk rate

risk and manage the gap exposures of

the Bank’s assets and liabilities

NA 100% 10,000,000,000 100% -

The face value of the debentures issued is LKR 10 billion. Of the total debentures issued, Type B debentures were issued as zero coupon bonds with a face value of LKR 100/- per debenture and an issue

price of LKR 63.8136. Hence the total proceeds of the debenture is LKR 8,914 million.

Note: Types A and B of the listed Debenture Issue - December 2013, amounting respectively to LKR 1,243 mn and LKR 1,529 mn, matured in December 2018. The outstanding capital of this Debenture is

LKR 7,228 mn.

10,000,000,000 10,000,000,000

10,000,000,000 10,000,000,000

20

Important Dates – Q1 2020 - Financial Results Release

Event Date

Financial statements released to the Colombo Stock Exchange, together with a Performance Commentary

20 May 2020

Investor Webinar 21 May 2020

Updates to the investor relations web page within the Bank’s corporate website www.ndbbank.com

Within two working days from the release to the CSE

Edited transcript and playback video of the Investor webinar released/ uploaded to the Bank’s website

Within seven working days from the date of the Webinar

Investor Forum Not held for Q1 2020

Financial statements published in selected newspapers in the three languages of Sinhala, Tamil and English

04 June 2020

Corporate Information

Name National Development Bank PLC

Legal Form Established under the National Development Bank of Sri Lanka Act No. 02 of 1979 and incorporated as a Company under the Companies Act No. 17 of 1982 and reregistered under the Companies Act No. 07 of 2007 and also licensed as a Licensed Commercial Bank in terms of the Banking Act No. 30 of 1988 as amended from time to time.

Head Office/Registered Office No. 40, Navam Mawatha, Colombo 02 Tel: +94 11 2448448 Fax: +94 11 2341044 SWIFT Code: NDBS LK LX Web Page: www.ndbbank.com E-mail: [email protected] VAT Registration No.: 409000266-7000 Credit Rating: Long-term National Rating: A+(lka)/ Negative Outlook - Fitch Ratings Lanka Limited

Registration No. PQ 27 Accounting Year End 31 December VAT Registration No. 409000266-7000

Auditors M/s Ernst & Young, 201, De Saram Place, Colombo 10 Company Secretary: Mrs. Shehani Ranasinghe Compliance Officer Mrs. Manique Kiriella Bandara

Board of Directors Eshana de Silva – Chairman Dimantha Seneviratne – Director/ Group Chief Executive Officer Dinal Phillips (President's Counsel) Director Sriyan Cooray – Director Bernard Sinniah – Director Dr. D Panditaratne – Director Sujeewa Mudalige - Director Hiransa Kaluthantri – Director Hiran Perera - Director

Subsidiary Companies NDB Capital Holdings Ltd. NDB Capital Ltd. (Bangladesh) Development Holding (Pvt) Ltd. NDB Investment Bank Ltd. NDB Wealth Management Ltd. NDB Securities (Pvt) Ltd. NDB Zephyr Partners Ltd. NDB Zephyr Partners Lanka (Pvt) Ltd. Ayojana Fund (Pvt) Ltd. (Under liquidation)

Investor Relations – Contact Details

Company Secretarial Unit Ms. Shehani Ranasinghe Company Secretary/ Vice President Email: [email protected] Tel.: +94 (0)11 2448448 Extn: 33000

Investor Relations Team Ms. Suvendrini Muthukumarana Vice President – Finance Email: suvendrini.muthukumarana@ndbbank com [email protected] Tel.: +94(0)112448448 Extn: 35301

21

Documents

INTERIM FINANCIAL STATEMENTS · NDB sustains sound pre-COVID 19 growth and profitability amidst multiple stresses. Geared to propel economic recovery. • Total operating income of