NDB Addresses Fraud Incident And Reinforces Financial Strength And Stability

(MENAFN- Colombo Gazette) National Development Bank PLC (NDB) wishes to provide a further update on the previously disclosed fraud incident, with a clear assurance to customers and all stakeholders.

The Bank reiterates that no customer balances have been affected by this incident. All customer funds remain intact and secure. NDB continues to operate as normal, with uninterrupted services across all operations. Its financial position remains strong, with sufficient capacity to meet all obligations and continue supporting customers.

Further to the disclosure made on 2nd April 2026, the Bank confirms that the incident was confined to a specific operational area and involved certain employees acting in collusion. The matter continues to be treated with the highest level of urgency.

The Bank has acted promptly and decisively upon identifying the issue. All implicated employees have been suspended, and all relevant records and evidence have been secured to support ongoing investigations. The affected operational unit has been placed under separate oversight, supported by revised reporting structures and enhanced access controls across the organisation. Efforts are ongoing on multiple fronts to recover the funds, with the support of law enforcement authorities, who have already taken action including arrests connected to the matter.

In a worst-case scenario, the financial impact to the Bank is estimated to result in an unaudited loss after tax for the quarter ended 31 March 2026 of approximately LKR 4.0 billion, after making full provision for the maximum expected loss arising from this incident.

The Bank reported a net profit after tax of LKR 11.0 billion for the year ended 31 December 2025, with a Q4 2025 net profit of LKR 3.5 billion. NDB remains financially strong; notwithstanding this impact, the Bank's Common Equity Tier I, Tier I, and Total Capital Adequacy Ratios are expected to remain above the minimum regulatory requirements of 7.0%, 8.5%, and 12.5%, respectively. The Bank's unaudited total asset base, approximately LKR 990.0 billion as at 31 March 2026, would be impacted by around 0.7%.

The Central Bank of Sri Lanka has been kept fully informed and continues to provide appropriate regulatory support and oversight within its mandate, ensuring the Bank maintains adequate liquidity and capital while preserving operational stability.

In line with regulatory direction, the cash dividend payable to shareholders on 6th April 2026 has been suspended, while the scrip dividend will proceed as planned. The Board of Directors will also appoint an independent forensic auditor to conduct a thorough and impartial review of the incident.

NDB remains committed to transparency and accountability and will continue to keep the public informed as more material information becomes available.

The Bank urges the public to avoid speculation or the spread of unverified information. Customers seeking clarification are encouraged to contact their nearest NDB branch, relationship manager, or customer service hotline on 011 744 8850 for accurate information.

MENAFN08042026000190011042ID1110955938