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 LKR Bn 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 LKR Bn 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% DPS (LKR) 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 60 180 50 150 LKRShare per 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 Sri Lanka 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 .