First Capital maintains constructive outlook on NDB, sees strong growth potential

First Capital Research has reaffirmed its positive stance on National Development Bank (NDB), maintaining a ‘buy’ recommendation despite a slight moderation in short-term expectations.

- By SANATH NANAYAKKARE

The bank's strong earnings recovery, declining impairments, and favorable macroeconomic conditions underpin First Capital's confidence in NDB’s long-term growth trajectory.

NDB reported an impressive 143.6% year-on-year (YoY) earnings growth in 1Q2025, though slightly below expectations due to slower loan expansion. The surge in profitability was largely driven by a sharp reduction in impairment charges. However, quarterly earnings saw a 58.5% contraction compared to 4Q2024, primarily due to a one-off reversal of impairment charges related to International Sovereign Bonds (ISBs).