INVESTOR PRESENTATION

CAPITAL RAISING VIA RIGHTS ISSUE AND PRIVATE PLACEMENT - 2021

National Development Bank PLC [NDB.N0000]

31 March 2021

1 Corporate Participants

PRESENTED BY Dimantha Seneviratne - Director/ Group Chief Executive Officer

PANELISTS • Suvendrini Muthukumarana – Vice President – Finance • Niran Mahawatte – Vice President - Treasury • Indika Ranaweera – Vice President – SME, Middle Market & Business Banking • Ishani Palliyaguru - Vice President - Project Finance and Corporate Credit Control • Shanka Abeywardene - Assistant Vice President - Corporate Planning & Business Intelligence • Senaka Kekiriwaragodage – Chief Executive Office – NDB Capital Holdings Limited

2 Snapshot of the Bank

4th largest Over Award Winning Over 40 years 113 of banking supremacy listed 3,000 Performance commercial Branches Since 1979 bank NDBers

Only Only Financial Services EDGE certified corporate Conglomerate in SL for workplace of its kind Gender Equality

Rapid advances made in deployment Implementation of Robotic Process of Technology in Customer Experience and Internal Automation Processes

Driven on a 5-year strategy which will position NDB as an LKR 1 Trillion asset base Bank by 2025

3 Financial Brief – NDB Group

Total Assets Net Interest Income 800 20 17.9 632.1 600 16 12 400

8

LKRBn LKRBn 200 4 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Gross Loans and Deposits Profitability 7.4 600 489.7 8 450.1 500 5.2 400 6 300 4 200

2 LKRBn

100 LKRBn 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Gross Loans Deposits Operating Profit Net Profit

4 One of the fastest growing banks in the country

Gross Loans Growth Outperforming the peer group on portfolio growth 30% whilst maintaining above peer asset quality 25% 20% Lending Portfolio Composition 15% 10% 8.4% SME 5% 4.4% 23.8% Wholesale 0% banking 2017 2018 2019 2020 31.2%

NPL Ratio NDB Peers 8.0% Project Financing 5.8% 6.0% 23.1% Retail 5.4% 4.0% Banking 21.9% 2.0%

0.0% 2017 2018 2019 2020 A well diversified portfolio with four primary segments

Note: Peers = COMB, SAMP, HNB, SEYB, DFCC and NTB 5 Continuously improving liability profile

Deposit Growth Advances to Deposits 40% 105% 30% 21.0% 100% 20% 18.9% 95% 90.5% 10% 90% 0% NDB Peers 2017 2018 2019 2020 85% 88.5% 80% NDB Peers 2017 2018 2019 2020 Growth in CASA Base Liabilities 2.0% 100% 60% 52.6% 13.7% 40% 35.3% 50% 20% 84.2% 0% 2017 2018 2019 2020 0% 2017 2018 2019 2020 NDB Peers Deposits Borrowings Other

Consistently outperforming the industry in terms of deposit Moving away from high-cost borrowings to cheaper mobilization and above peer growth in the CASA base for a sources of funding over the years young player in commercial banking. Highest CAGR for deposits among peer group

6 Delivering on profitability and shareholder returns

Fee Income as a % of NII PAT Growth 30% 40.0% 35.0% 23.9% 25% 30.0% 21.9% 25.0% 20% 20.0% 15.0% 15% 10.0% 8.0% 5.0% 10% 0.0% -5.0% 2017 2018 2019 2020 5% -7.2% -10.0% 0% -15.0% 2017 2018 2019 2020 -20.0% NDB Peers NDB Peers

Overtaking peers in 2020 with strong focus on fee The only bank among the peer group with assets in income excess of LKR 500 Bn to achieve PAT growth in 2020

7 A leader in cost optimization

Cost to Income Organization Automation of a large 50% number of manual 43.8% Effectiveness and 45% processes through Efficiency 40% 37.0% technology (workflow Improvement program 35% and Robotic Process launched 30% Automation) 25% 20% 15% Cost 10% Leader 5% 0% Fostering a cost Deployment of customer- 2017 2018 2019 2020 conscious culture centric digital solutions, Peers NDB across the Team, where converting 80% efficiency, effectiveness transactions to be routed Ranked #2 amongst the peer group with a continuously via low cost digital improving cost to income ratio and being environmental friendly are the norms platform

8 Positive indicators to stir investor appetite

... better utilization of assets in terms of ROA ... highest ROE and efficient use of Capital 2.5% 20.0% 2.0% 15.0% 1.5% 10.0% 1.0% 0.5% 5.0% 0.0% 0.0% 2017 2018 2019 2020 2017 2018 2019 2020 NDB Peers NDB Peers

...narrowing the gap with peer NIM’s … payouts amid capital tightening 5.0% 10.00 4.0% 8.00 3.0% 6.00 2.0% 4.00

1.0% (LKR) DPS 2.00 0.0% 0.00 2017 2018 2019 2020 2017 2018 2019 *2020 NDB Peers Cash Scrip

*final dividends have not been declared

9 Attractive Valuations together with strong operational KPIs

FY2020 NDB COMB HNB SAMP SEYL DFCC NTB Ranking Growth Rates Total Assets 18.4% 25.1% 14.8% 15.4% 8.0% 14.9% 3.9% 2 Gross Loans 8.4% 3.0% 5.5% 5.5% 5.0% 11.2% -6.7% 2 Deposits 21.0% 20.2% 19.5% 23.5% 9.9% 25.1% 6.0% 3 NII 0.2% 5.0% -9.2% -18.6% 4.6% -13.1% -15.3% 3 Operating Profit -8.4% -5.1% -28.1% -35.5% -28.3% -3.0% -10.9% 3 PAT 8.2% -3.8% -18.3% -28.0% -18.2% 15.1% 10.0% 3 KPIs ROE 13.1% 11.3% 8.7% 7.6% 6.4% 4.9% 11.7% 1 ROA (B/T) 1.6% 1.5% 1.2% 1.1% 0.8% 0.8% 1.7% 2 Cost to Income 37.0% 33.9% 39.3% 43.5% 50.3% 49.0% 47.0% 2 NPL 5.4% 5.1% 4.3% 6.3% 6.4% 5.6% 7.2% 3 Tier I 9.2% 13.2% 14.7% 13.4% 11.5% 10.8% 14.4% 7 Tier II 14.3% 16.8% 18.0% 16.4% 14.3% 15.8% 18.0% 6 Investor Metrics PBV 0.39 0.67 0.43 0.57 0.51 0.37 0.43 PE Ratio 3.7 5.8 5.1 7.7 8.5 6.9 3.8 Return on MV of Equity 27.3% 17.3% 19.8% 13.0% 11.8% 14.5% 26.6%

10 The Rights Issue: Gearing for growth

The Issue as a Glance Capital Adequacy Core Capital Total Capital Announced October 20, 2020 20% 16.1% 16.7% 14.3% Size of the Issue LKR 8.0 Bn 15% 11.0% 11.7% 9.2% Price of the Issue LKR 75/- per share (PBV = 0.36) 10% Share Issue Ratio 28 for 61 5% Shares to be Issued 106,780,489 0% Purpose of the Issue Strengthen equity base / improve CAR Pre Post Rights Issue Post Rights Issue and Private Placement Key Dates 15% 14.3% General Meeting / Provisional Allotment Apr 9, 2021 13% XR Date Apr 12, 2021 11% Dispatch of Letter of Provisional Allotment Apr 20, 2021 Commencement of Trading of Rights Apr 27, 2021 9% 9.2% Last Date of Renunciation to CDS May 04, 2021 7% Last Date of Acceptance and Payment May 05, 2021 2017 2018 2019 2020

The capital raised through the issue will provide a sufficient buffer for the Bank to progress with its growth plans whilst maintaining healthy levels of capital adequacy for the 2 to 3 years

11 Norfund’s backing and support in NDB’s growth story with first equity investment in the country

Norfund at a Glance

Norfund Norwegian Investment Fund for developing countries

Owned by Norwegian Government

Global Committed investments USD 2.9 Bn (Upto Dec 2019) Number of Projects 163

Number of Core countries 29

Norfund in NDB Stake 9.99% Rights Issue Unsubscribed Rights up to 9.99% Private Placement Short fall from Rights up to 9.99% Private Placement Price LKR 82.50/- (10% Premium on Rights price) Investment Upto LKR 3.1 Bn

12 NDB Share Price Performance

3m VWAP = LKR 88.70 Rights Issue Announcement 110 330

100 300

90 270 Private Placement Price 80 240

70 Rights Issue Price 210 LKR Mn LKR 60 180

50 150

LKRShareper 40 120

30 90

20 60

10 30

0 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

Turnover (RHS) Price (LHS) NAVPS= LKR 206.23

13 NDB Group’s 5-year Strategy – VOYAGE 2025

Key Strategic Pillars Enabling the Achievement of Goals by 2025

Customer Centric

Customer Centric Approach Through Segmentation Across Business Verticals

Key Strategic Goal by 2025

Matrix Digital Structure Best In Class Staff Evolution LKR 1 Trillion is Assets Horizontal Product Changing the Digital, Data & & Service Perspective Management Specialization & Information To Channels Enable Strategy

14 Robust Product Portfolio bringing universal banking solutions to a wide range of customers

Products cover a business of any scale from a micro-business venture not yet integrated to Products cover any stage in life of an individual formal banking to top-notch blue-chip corporates with from a newborn infant to a senior citizen global reach

Personal Banking Products

• NDB Dream Maker Personal Loans • NDB Goodlife Credit Cards • NDB Leasing • NDB Araliya – Women’s proposition Market Wholesale Banking Products Leadership Positions • NDB Project Financing – Expertise in renewable energy projects financing in and Asian and African continents • Commercial banking products with cash management, transaction banking and Chinese desk solutions

Business Banking Products • Customized SME banking delivered based on business size • Augmented with advisory support

15 Best-in-class offering for HNWIs

NDB Privilege Banking - dedicated proposition for high-net-worth customers . Market leader in terms of customer base and total deposits base . Dynamic range of products ranging from plain-vanilla deposit products to complex wealth management/ investment options, including services such as estate management . Excellence in customer experience and relationship management . Tailored solution through deeper segmentation and curated offerings - Sub segments of emerging high net worth (LKR 3-5 Mn) high net worth (LKR 5-10Mn) and ultra-high net worth (over LKR 10 Mn)

NDB Treasury . A market maker in the foreign exchange and debt markets . Plays a vital role in managing the Bank’s market risks such as interest rate and liquidity risk through effective Asset Liability Management . Competitive edge stemming from its highly skilled and experienced treasury team . Wide array of products offered catering to the evolving needs of a dynamic market

16 Expertise in SME Financing since inception, with ‘Business Banking’ as a dedicated vertical

• NDB Business Banking with further segmented solutions for SMEs based on scale of business • Jayagamu Sri Lanka – NDB’s latest initiative in SME, exporter and investor support in the COVID-19 scenario • Support augmented through financial as well as advisory support • Strategic relationships maintained with international development financing institutions such as ADB, IFC, Proparco in sourcing low cost funds and channeling them to SMEs • Regular recipient of refinancing facilities from the and effective disbursement in adherence to stipulated requirements (e.g: minimum lending to women led businesses, minimum lending to specific districts, etc.) • Strategic partnerships with third parties in garnering support to SMEs

Daraz online platform Maersk Shipping Line iLoan Lanka Pvt Ltd ThinkCube EDB to open up new markets to support exporters and to provide SMEs with to increase the business to open up SMEs to new to SMEs to benefit exporters better access to Trade robustness of the MSME markets, support with services and Finance, by providing sector through the customers in capacity expertise in the shipping trade credit to the adoption of cutting edge development sector Underbanked and technology, business and provide specialized Unbanked MSMEs in their tools and insights, support to a wide array trade with the including Cloud of industries distributors of Large technology Manufacturers in Sri Lanka

17 NDB Group The only financial services conglomerate of its kind in the country

The Group structure enables the Bank to offer unique, hybrid product solutions, combining features of commercial banking products and wealth management and capital market products NDB One Account Capital market services delivered trough the capital markets cluster [Graphic]

Market Leader in Investment Banking in Sri Lanka

The only one of its Largest Private Sector Asset Management Company in Sri Lanka kind in the industry – a fusion between banking and capital LeadingLeader Investment in IB in B’desh bank in Bangladesh market product features [offers banking ODs against One of the pioneering and leading stockbrokers in Sri Lanka capital market investments]

Largest Country Focused PE Fund in Sri Lanka

18 Dedicated to Empowering the Women's Market

Banking on Women – A key strategic agenda of NDB

. Dedicated proposition for the women’s segment NDB Araliya . A research backed market proposition developed with the International Finance Corporation . Catered to three specific segments of female homemakers, salaried females and female entrepreneurs . A comprehensive bundled offer comprising savings and current accounts, insurance cover for account holder and immediate family, business loans, credit cards, etc. . Non-financial, advisory support extended in areas such as business registrations, accounting and auditing, entering new markets, personal grooming, etc.

The latest initiative under NDB’s women empowerment initiatives. A national level awards program in NDB Vanithabhimana recognizing high performing females across eight categories:

. Sport . Environmental Management . Entrepreneur (Small) . Social Worker . Entrepreneur (Medium) . Education . Young Leader . Upcoming women entrepreneur - Business

19 Preparing for a Digital Future

A comprehensive portfolio of digitized channels, making banking with NDB accessible from any corner of the world NDB NEOS Mobile Banking App NDB NEOS mobile NDB NEOS online NEOS PAY banking app banking app The best in the banking industry with a host of unique features  Only mobile banking app which is connected to the JustPay Platform Other digitized channels  Only Inter-operable QR Code enabled banking app (universal NDB NEOS Phygital Bank2U – Branchless Cash Recycle and accessible by non-NDB branches banking proposition Machines network customers)

Over 80% of the Bank’s transactions conducted via digital modes

20 Using Technology as an Enabler

Robotic Process Automation technology (RPA) deployed within the Bank – First Sri Lankan Bank to have a digital workforce work alongside human workforce

Work Flow Solutions introduced to a large number of processes

Core Banking Upgrade in progress to update the existing system version to the fastest and most capable within the banking industry – Temonos R20

21 Promoting Gender Diversity

33% female representation in Senior 39% female representation in Overall Staff Management 7 out of 19 Leadership Team positions held by females in critical business functions such as corporate Female composition of new recruitments credit control and governance functions such as Compliance, 35%, 42%, 38% and 35% in 2020, 2019, 2018 and 2017 Audit, Risk Management, Finance, Legal and Company Secretariat

Clearly established against harassment Two female Board Directors Policy including sexual harassment

Organization-driven initiatives such as Flexi- working Hours and Paternity Leave in place to Only EDGE certified corporate in ensure quality work-life balance Sri Lanka, for workplace gender diversity Partnerships with initiatives such as She Works Sri Lanka and Women in Work, led by the International Finance Corporation

22 Corporate Sustainability and Environmental and Social Governance

 Three pillars of Entrepreneurship, Environment and Education Dedicated to  Major initiatives give back • NDB Let’s Grow – Reforestation and Home Gardening initiatives • English Teacher Training Program in partnership with the British Council

A platform for NDBers to champion community enrichment. Key themes; Employee • Climate change mitigation Volunteerism • Pollution control and conservation • Reforestation • Biodiversity enrichment and habitat conservation

NDB Araliya and Vanithabhimana Contribution Bank2U digital banking: taking financial services to the unbanked and under-banked segments through Banking MSME Banking including Jayagamu Sri Lanka Products Ithuru Karana Maga (The Path to Save) – The Bank’s savings philosophy encompassing financial as well as other resources saving and promoting the concept of thriftiness as a lifestyle

 ESG is deeply ingrained in the Bank’s endeavours ESG  ESG extends to the Bank’s lending processes, supplier relations, customer engagements, etc

23 Annexures

24 Shareholder Profile

Shareholder Groups MJF Group, 1.3% DFCC, 1.4% ARRC Capital, 1.2% Individual Akbar Brothers, SLIC - General Fund, 21% 1.5% 6.4%

SBI - Japan, 2.6% SLIC - Life Fund, 5.3% Rush - Japan, 2.9% Institutio nal Phoenix Ventures, 79% 2.9%

HNB, 2.9% EPF, 10.0% Non-resident 11% ETF, 3.9%

Perpetual Group, Softlogic Group, 4.85% 10.0% Resident 89% , Richard Pieris Group, 8.1% 8.6%

25 Historical Milestones

1979 2001 2019

National Development Bank of Sri NDBSL incorporated a commercial In 2019 NDB crossed the LKR 500 Lanka (NDBSL) established under bank under the Companies Act No. Bn mark in total asset becoming Act No. 2. of 1979 of Parliament 17 of 1982 under the name ‘NDB the 4th largest listed bank in Sri Bank Limited’ (NBL) to take over Lanka the business and operations of ABN Amro NV Colombo Branch

In August 2005, NDB acquired commercial operations, business, 61% of share capital of NDBSL assets and liabilities of NBL Best Bank in the country, as transferred to private ownership subsequently in July 2007 it was re- adjudged by seminal institutions through an IPO at LKR 50/- per registered as National Development across the globe. Asset base share Bank PLC exceeds LKR 600 Bn.

1993 2005 2020

26 Methodology of Investment (1/2)

NOTE: Available Options All Cheques/Bank Drafts should be drawn payable to Accept Entitlement April 21 - May 05, 2021 “NATIONAL DEVELOPMENT BANK PLC – RIGHTS ISSUE" and crossed "Account Payee Only”. Renounce shares April 21 - May 04, 2021

Trade on entitlement April 27 - May 04, 2021 Where an Application is signed under a Power of Attorney (POA), the original must be first registered with the Apply for Additional Shares April 21 - May 05, 2021 Company Secretary and a copy of the same, certified by Notary Public/ Commissioner of Oaths must be lodged with the Registrars to the Issue

Foreign Investors/Non-resident Sri Lankans may only invest through an Inward Investment Account (IIA) formerly known as Securities Investment Account (SIA) maintained with any commercial bank operating in Sri Lanka. Such applications must be accompanied by a letter from the respective commercial bank confirming same

27 Methodology of Investment (2/2)

CDS Shareholder Ledger Shareholder

Accepting • Contact the respective Stockbroker/Custodian Bank not • Complete FORM A – LETTER OF ACCEPTANCE AND Entitlement later than 4.30 p.m. on May 4, 2021 REGISTRATION • Submit the required remittance to the respective • Attach a Cheque/Bank Draft for the exact amount payable Stockbroker/Custodian Bank not later than 4.30 p.m. on • If payment via SLIPS/RTGS transfer (preferred only for May 4, 2021. payments over LKR 100,000) send a scanned copy of the Form A together with a clear scanned copy of your SLIPS/RTGS bank confirmation to [email protected] not later than 4.30 p.m. on May 5, 2021

Trading on • Contact the respective Stockbroker/Custodian Bank and • A CDS account is mandatory for this right to be exercised Entitlement / provide the requisite instructions not later than 4.30 p.m. Renunciation on May 4, 2021 Applying for • Complete FORM C - APPLICATION FOR ADDITIONAL SHARES • Same process as for CDS Shareholders Additional • Attach a Cheque/Bank Draft for the exact amount payable Shares • Forward the above to S S P Corporate Services (Pvt) Ltd, Registrars to the Issue at No.101, Inner Flower Road, Colombo 03 either via post, courier or by hand not later than 4.30 p.m. on May 5, 2021 • If payment via SLIPS/RTGS transfer (preferred only for payments over LKR 100,000) send a scanned copy of the Form A together with a clear scanned copy of your SLIPS/RTGS bank confirmation to [email protected] not later than 4.30 p.m. on May 5, 2021

28 Disclaimer

This document has been prepared by National Development Bank PLC [“NDB”, “Bank” or the “Group”] solely for use at its presentation to potential & current investors. By accepting this document, you agree to maintain absolute confidentiality regarding the information disclosed in this document.

The information contained in this document should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. Not the Bank nor any of its respective affiliates, advisers or representatives shall have any liability whatsoever [in negligence or otherwise] for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

This document contains proprietary information and no part of it may be reproduced, redistributed or passed on, directly or indirectly, to any other person [whether within or outside your organization/firm] or published, in whole or in part, for any purpose.

This presentation and subsequent discussion may contain certain forward-looking statements with respect to the financial condition, results of operations, capital position and business of the Group. These forward-looking statements represent the Group’s expectations or beliefs concerning future events and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements.

Forward-looking statements speak only as of the date they are made. The Group makes no commitment to revise or update any forward-looking statements to reflect events or circumstances occurring or existing after the date of any forward-looking statements.

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