NDB financial results delayed on audit
National Development Bank (NDB), the cash-strapped development bank has failed to release its financial results to March 2018 on time due to the fact that audit has not been completed. Chief Executive Officer, Lorato Morapedi has recently told the Public Accounts Committee (PAC), adding they have requested the sole shareholder, government to give them more time to complete the audit, which they should have submitted by end of September.
“The shareholder is aware of our challenges, we requested to be given up to the end of November and we are still waiting for the response from the regulator,” said Morapedi.Previously, the bank has request government to inject capital into its operations, but they are yet to be positively responded to.
It is understood during the appearance at PAC, the bank had prepared themselves to seek support from the committee in their bid to get financial boost from government. For the year ended March 2017 the bank recorded increased impairments to P184.7 million from P60 million in the previous year resulting in a total loss of P168 million.
Loans and advances to customers were reduced by 24 percent from P1, 2 billion in March 2016 to P911.1 in 2017 due to high impairment charge during the year. The bank recorded a loss of P168.1 million compared to P21.2 million in the previous year as a result of a high impairment charge on loans and advances to customers at P184.7 million compared P59.9 million in the previous year.
Meanwhile, in 2016 the bank requested government to inject capital amounting to about P1 billion in the next three years in order to transform the bank and prepare it for commercialization. In 2017, it was offered P400 million by government, P100 million of it being a grant while the remaining P300 million was a loan.
In the bank’s 2017 annual report, Morapedi said the impact of negative economic downturn manifested in the form of financially distressed customers resulting in increased impairments during the year. “This is exacerbated by the fact that the Banks mandate dictate that it supports key priority sectors which are also highrisk such as start-ups and agricultural projects which are not attractive to other financiers,” said Morapedi.
The total value of loans approved during the period was P167.5 million compared to P47 million in the previous year with agriculture loans constituting 78.13 percent of total approvals for the period.