National Development Bank (NDB) recorded a reduction in comprehensive loss from P86.4 million in March 2014 to P48.4 million for the year ended 31 March 2015. The 52 year old bank’s clear sign of financial recovery is mainly attributed to a reduced impairment charge compared to the previous period. Since 2015, the bank has adopted a turnaround strategy to turn its fortunes back to profitability and operational efficiency.
The bank’s main focus is collecting overdue debt from defaulters in order to ease its liquidity challenges. Led by Chief Executive Officer (CEO) Lorato Morapedi, NDB’s total loans and advances increased from P1.30 million in March 2014 to P1.37 million in March 2015. Owing to the suppressed world and domestic economic activity, the bank’s assets have decreased marginally by 1.7 percent from P1.57 billion as at March 2014 to P1.54 billion as at 31 March 2015.
Last year, Morapedi confirmed that NDB was focusing on collections adding that the bank’s Act has limitations. The CEO spoke of data issues with regards to migration to the new system which she revealed unearthed a number of exceptions.
“We are optimistic about the bank’s privatisation and commercialisation processes and the new business model. These developments are potential enabler for more efficient banking through product development and improvement,” she said at the time.
Still last year Morapedi said the long awaited 2003 privatisation process was delayed to allow the bank to undergo commercialisation to ensure that a worthy asset is ultimately privatised. She added that the bank is currently in the process of going commercial after it defined a new and viable business model.
“Internally we did the bank’s structure realignment, and we have introduced relationship managers who are also sector based. The bank is responding to customers’ needs,” said Morapedi.
She stated that NDB has the ability to widen banking services to the unbanked and rural communities adding that it is expected to improve profitability and sustainability. “The bank has enhanced monitoring of new loans and there is 360 degrees view of customer information,” she revealed.
As a way of returning to profitability, it is also reported that the bank will continue placing emphasis on improving its income generation, containing costs and reducing non-performing loans. The bank has also embarked on various key transformational projects such as the rebranding exercise, branch refurbishment project and improving operational excellence. “NDB is yet to apply for the banking license after approval of the business model at relevant government structures,” stated Morapedi