16 May 2013

The National Development Bank (NDB) income has declined due to an increase in impairments and the implementation of Thobo 2014 strategic projects and initiatives.

Commenting on the 2011/12 financial report, NDB chief executive officer, Ms Lorato Morapedi said the bank’s income stood at P40.4 million, down from P48.7 million the previous year.

However, she was optimistic that although the new strategy had negatively affected the bank’s returns, upon completion of the resulting organisational structure, changes were expected to improve return on investment as the bank becomes more agile and efficient in its operations.

As the global and local economy show slight improvements, NDB’s assets grew by 7.92 per cent to P1.163 billion as growth in loans increased. Ms Morapedi said the bank’s interest income grew by 4.8 per cent compared to 0.4 per cent the previous year.

The report also revealed that interest expense increased by 4.05 per cent against borrowings growth of 13.01 per cent. In contrast to the 12.74 per cent and 13.01 per cent growth in advances and borrowings respectively, the lower interest income and expenditure were reflective of the low interest rates that prevailed in the market during the period under review.

The government as a shareholder is to receive P10.1 million in dividends. The report shows that agriculture remains an important sector as it accounts for 50.5 per cent of the total loans followed by mortgage at 22 per cent while property loans stand at 14.2 per cent. ENDS