SDB bank registers almost threefold profit increase in Q1 21 | Sunday Observer

SDB bank registers almost threefold profit increase in Q1 21

12 June, 2021
Chairman Lakshman Abeysekera
Chairman Lakshman Abeysekera

Maintaining the growth trajectory displayed in 2020 with a 279% annual profit rise in comparison to 2019, SDB bank recorded an equally strong performance in the first quarter of 2021, particularly through steady growth across its diverse loan portfolio. 

The bank continued to meet the challenges of the current economic climate successfully through digital innovation and service delivery transformation, allowing them to register an almost threefold increase in profit for the three months ended March 31, 2021. Equalling Rs. 302 million, this represents a 190% increase in profit from the corresponding quarter last year. For the quarter under review, earnings per share on profit rose to Rs. 3.3 from Rs. 1.9 per share in Q1 2020. 

In the first quarter this year, the bank grew the volume of loans (net) amounting to Rs. 5.5 billion, up 5.2% from the end of 2020. This was reflected in the bank’s fee income as well, closely linked to its loans, up by a considerable 139%. The bank’s asset or loan quality also improved, with a gross non-performing advances ratio of 4.47% for the quarter, a small but significant reduction from 4.54% in 2020.

Parallelly, the bank maintained healthy Tier 1 and total capital adequacy ratios of 9.44 percent and 12.71 percent respectively by the end of March 2021, above the regulatory requirements.

The bank stated Rs. 9.3 billion in core capital by end-March, having raised Rs. 1.53 billion in their rights issue in November 2020, with another Rs. 4 billion raised in fresh deposits in the period under review, supporting its liquidity further. SDB bank’s liquidity assets ratio stood above the statutory requirement, at 20.7%.

The bank registered net interest income of Rs. 1.63 billion in Q1 2021, a 11% rise from the corresponding period of the previous year. The bank only had to provide Rs. 156.1 million in possible bad loans during this period, representing a drastic drop from Rs. 413.8 million in the corresponding period in 2020.

SDB bank’s sustained high performance in Q1, 2021 and its loan portfolio growth plus loan quality for the period can be attributed to the bank’s initiatives involving SME development, a nationally critical sector amounting to 52% of national GDP.

Together with reputed organizations such as The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), MILCO, and DIMO, SDB bank has offered one-on-one expert mentorship and technical knowledge plus specialised loans and leasing promotions to develop SMEs islandwide.