National Development Bank shares fell 15.13% to close at Rs. 110.75 on April 8, the second session after the Colombo Stock Exchange lifted a trading halt imposed in the wake of the bank’s Rs. 13.2 billion internal fraud disclosure.
More than 4.1 million NDB shares changed hands, generating Rs. 455 million in turnover — about 24% of the day’s total market activity of Rs. 1.8 billion. The stock was the largest negative contributor to the All Share Price Index, which slid 67.05 points. Other banking counters posted modest gains, with Commercial Bank, Sampath Bank and Hatton National Bank all closing higher even as the sector index dipped 0.8%.
The CSE had suspended trading on April 6 after NDB confirmed an internal fraud now estimated at Rs. 13.2 billion, sharply revised from an initial Rs. 380 million figure disclosed in early March. Bank management has said unaudited Q1 2026 results will show a loss of around Rs. 4 billion after full provisioning for the maximum expected fraud losses, while capital adequacy ratios remain above Central Bank minimums.
Good governance activists have rounded on the NDB board for failing to flag a sharp jump in “Other Financial Assets Gross” receivables in the audited 2025 accounts. The line item rose to Rs. 12.22 billion from Rs. 3.1 billion in 2024, against a historical average of around Rs. 1.4 billion. The receivables relate to Customer Electronic Funds Transfer (CEFT) transactions and corresponded with the period during which the fraud is now believed to have escalated, beginning in mid-2024.
“This represents a clear violation of controls and monitoring oversight by Finance, Internal Audit and top management and overall the Board risk and audit committees,” activists were quoted as saying in Daily FT.
The Central Bank has directed NDB to suspend its planned cash dividend of Rs. 6.46 per share and ordered the bank to halt branch expansion until the investigation is complete. A forensic auditor has been appointed and several implicated employees have been suspended. The episode is also accelerating Governor Nandalal Weerasinghe’s push for mandatory bank consolidation.
