‘NDB’s earnings surged by over threefold in 3Q2023

NDB’s earnings surged by over threefold in 3Q2023 to LKR 3.0Bn underpinned by a substantial expansion in the non-fund based income category soaring by 527.8%YoY and 313.5%QoQ to reach LKR 4.0Bn. The increase was primarily driven by variations in exchange rates and interest rates compared to 2022. Notably, 3Q2023 performance exceeded expectations, and with improving certainty and business confidence stemming from macroeconomic factors such as interest rates, exchange rates and inflation stabilizing over the year, we have upgraded the bottom-line by 34.4% to LKR 8.5Bn for 2024E. Consequently, we have slightly upgraded the fair value to LKR 150.0 for 2024E to reflect the anticipated increase in earnings. However, at the current market price of LKR 65.6, 2024E fair value implies an upside of 128.7%.

-First Capital Research