- Financial impact of the fraud of LKR 13.20 billion fully recognising FY 2024, FY 2025 and Q1 2026 financial periods
- LKR 2.67 billion financial impact arising from the fraud incurred in 1Q 2026 leading to a profit before all taxes of LKR 3.47 billion
- Gross income reaches LKR 26.50 billion during 1Q 2026, a year-on-year growth of 15.3%
- Net fee and commission income expands by 24.9%
This financial results of the National Development Bank PLC (NDB) for its first quarter ended March 31, 2026 (1Q 2026), represent the Bank’s earlier corporate disclosures as released to the Colombo Stock Exchange on April 2, 2026, April 6, 2026 and April 23, 2026. The breakdown of the estimated financial impact of the fraud of LKR 13.20 billion as allocated between the current financial year and the prior periods is as follows; LKR 0.91 billion for the period prior to January 1, 2025, LKR 9.62 billion for the financial year ended December 31, 2025 and LKR 2.67 billion for the first quarter ended March 31, 2026. Accordingly, the results reported in the Statement of Profit or Loss for the comparative quarter ended 31 March 2025 and the Statement of Financial Position as at January 1, 2025 and December 31, 2025 have been restated.
After adjusting such financial impact of the fraud, the reported post-tax profit for the financial year ended December 31, 2024 of LKR 9.03billion has been restated to LKR 8.54 billion and the reported post-tax profit for the financial year ended December 31, 2025 of LKR 11.04 billion has been restated to LKR 5.90 billion. Operating profit before taxes on financial services for 1Q 2026 of the Bank was LKR 3.47 billion. This is after adjusting the gross financial impact arising from the fraud applicable to 1Q 2026 of LKR 2.67 billion. This profit figure compares with a LKR 482.18 million operating profit before taxes on financial services for the comparative quarter of 1Q 2025, which has been restated with an applicable financial impact of the fraud of LKR 3.50 billion for that period.
Post-tax profit for 1Q 2026 was LKR 1.75 billion and compared with a post-tax profit of LKR 37.58million for 1Q 2025 – with the financial impact of the fraud included for both periods. Post-tax profit for 1Q 2026, unadjusted for the financial impact of the fraud would have been LKR 3.20 billion versus a comparative post-tax profit of LKR 1.93 billion in 1Q 2025.
The Bank delivered healthy income performance for the quarter, recording total operating income of LKR 12.77billion, representing a robust 20.8% year‑on‑year (YoY) growth compared with the first quarter of 2025. This outcome was supported by a healthy expansion in to pline income, which increased by15.3% YoY to LKR 26.50 billion.Net interest income (NII)rose to LKR 9.05 billion, reflecting a marked YoY growth of 13.5%, driven by effective balance sheet management and disciplined pricing strategies. Interest income increased by an impressive11.3% to LKR 22.66 billion, while the growth in interest expenses was contained at 9.9% to LKR 13.61 billion. The Bank sustained a stable net interest margin (NIM) of 3.9%, which compared with 4.1% recorded for the financial year ended December 31, 2025.
Improvements were recorded in staging movements where stage 2 and stage 3 loan stock stood at 6.7% and 10.0% at the end of 1Q 2026 compared with 7.9% and 10.8% respectively at the end-2025. Impaired loans (Stage 3) to total loans ratio for 1Q 2026 was 3.2%, though marginal, an improvement from 3.8% in end-2025. Stage 3 provision coverage also saw further improvement to 62.1% from 59.1% as of end-2025.
The Bank’s total assets if unadjusted for the financial impact of the fraud, as at end 1Q2026 would have been LKR 988.83 billion, versus a similar asset base as at end-2025 of LKR 935.81 billion. With the financial impact of the fraud adjusted, total assets reported for 1Q 2026 was LKR 977.20 billion and compared with a restated total asset base of 926.17 billion as at end-2025. Within total assets, net loans expanded to LKR 623.11billion, recording a 5.0% increase from LKR 593.60 billion in the previous year. Total deposits increased to LKR 731.73 billion, reflecting 3.5% growth from the end‑2025 level of LKR 707.17 billion. The Bank’s CASA ratio stood at 25.6% as at end‑1Q 2026, against 27.0% at end‑2025.Total equity of the Bank stood at LKR 78.46 billion as at the end of 1Q 2026, and compared with a restated total equity base for 31 December 2025 of LKR 80.38 billion. Total equity at the Group level was LKR 85.78billion.
Liquidity levels also remained sound with the Bank’s liquidity coverage ratios, across both rupee and all currency, closing at 177.5% and 153.3%, respectively at the end of the quarter (2025:257.3% and 208.5%) while the net stable funding ratio was 127.6% (2025Restated: 131.2%) – all of which were well above the minimum regulatory requirements of 100.0%. The Bank’s solvency levels as measured by CET1/ Tier I and Total CAR were 9.5% and 15.4%, respectively representing buffers of 102bps over Tier I and 291bps over total CAR regulatory minimums (2025Restated: 11.3% and 14.9%).
Source: Daily News
