National Savings Bank shows remarkable first quarter performance by recording a pre-tax profit of Rs 2. bn, a growth of 87 percent compared to the corresponding quarter of 2009.
Commenting on the performance, NSB s General Manager/CEO Hennayake Bandara said the Bank s operating profit from ordinary activities before taxes increased to Rs 2.7bn recording a growth of 80 percent over the same period last year, while profit after tax for the period increased by 59 percent to Rs 1.1bn.
The main reasons behind the increase in after tax profit are overall increase of interest income despite declining interest income on loans and advances and decrease in interest expenses on deposits.
NSB s nett interest income grew to Rs 2.5bn, a growth of 252 percent during the first quarter of 2010 compared to same period of 2009. Non interest income has declined by 13.5 percent to Rs 1.7bn from Rs 1.9 bn in first quarter 2009.
The interest expenses of the Bank decreased by 10 percent to Rs 8.1bn, mainly due to re-pricing of term deposits at lower rates.
Bank has mobilized Rs 8.8bn in deposits during the period while increasing total deposits to Rs 347.8bn. Though the increase in deposit base is marginal, the effective cost of funds dropped as a combined result of repricing deposits at lower rates and increase in savings deposits.
Total assets of the Bank stood at Rs 366.1bn at end of March 2010 against the Rs. 306.7bn at the end of March 2009.
Bank s non interest expenses grew only by 8.4 percent to Rs 1.4bn during the first quarter compared to the same period in 2009.
Personnel costs have been well managed with a marginal increase of 0.7 percent to Rs 706 mn compared to corresponding period last year. The Bank s effective tax rate increased to 59.4 percent in first quarter 2010 compared to 53.4 percent for the corresponding period 2009 and this was mainly due to the increase in VAT on Financial Services.
The Bank has shown a positive disbursement in loans and advances over the last balance sheet as at December 31, 2009 by recording a moderate growth of 5.6 percent. Further, the total non performing loans decreased by 4.3 percent over the last balance sheet mainly due to increased efforts on recoveries.
As a result, Non Performing Loans (NPL) ratio improved to 3.5 percent from 3.8 percent at the end of 2009 and Bank s NPL ratio is well below the industry average. The Group s operating profit from ordinary Activities Before Taxes increased to Rs 2.8bn recording a growth of 58 percent over the same period last year, while profit after tax for the period increased by 37 percent to Rs 1.2bn.
NSB continued to increase its branch and ATM network during the period by adding nine new ATMs and seven new branches, thereby improving customer care and quality of services provided by the Bank.
NSB became the only Sri Lankan Bank to get the AAA (lka) rating by Fitch Rating for the seven consecutive year.
The rating also confirms the Bank s trustworthiness and ensures stability for our customers who come from all walks of life.
We do not want to rest on our laurels improving quality in every work aspect of our Bank is one of our main goals Hennayake Bandara said.