NSB records 15% growth - 1H, 2019 | Sunday Observer

NSB records 15% growth - 1H, 2019

National Savings Bank demonstrated robust performance during the first half of 2019 amidst subdued macroeconomic and market conditions, and witnessed Profit Before Tax (PBT) of Rs. 4.3bn, a growth of 15.5% compared to corresponding period of 2018.

The Bank recorded a Profit After Tax (PAT) of Rs. 2.3 bn, an increase of 15.2% over the same period last year, despite the loss of With Holding Tax (WHT) on government securities amounting to Rs. 1.3bn during the first six months of 2019 over the same period 2018, due to removal of WHT benefit with effect from 01.04.2018.

An additional tax of Rs. 832.7mn had a negative impact on the profit during the first half (1H) 2019, as compared to the same period last year, resulting from the implementation of Debt Repayment Levy (DRL) which came into effect 01.10.2018 onwards. The Bank has contributed Rs. 4.8 bn to the Government in way of taxes and levies during the period under review.

Total income grew by 6.2% to Rs. 59.1bn whilst total operating income observed a growth of 15.3% to reach at Rs. 15.1 bn. Net Interest Margin (NIM) improved to 2.61% during six months ended at June 2019.

Administrative and overhead expenses during the first six months of 2019 rose in line with the enhancement of business activities. Depreciation and amortization on tangible and intangible assets increased by 65.8% due to investment made in branch network and digital infrastructure.

However, the impairment charge for the six months ended 30th June 2019 declined by 36.7% over the same period last year, fueled by redemption of Sri Lanka Development Bonds (SLDB) which matured in 3Q-2018. The resultant cost to income ratio improved to 51.3% for the period under review from 54.5% in 1H-2018.

The total assets of the Bank grew by 5.2% over the December 31, 2018 to reach LKR 1.1tn supported by growth in customer deposits. Customer deposits reached to Rs. 907.8bn, increased by 8.1% over the end of December 2018. Net loans and advances also rose by 5.7% to Rs. 447.8 bn as against the end of December 2018. At the end of first half of 2019, the Bank has managed to maintain the gross non-performing loan (NPL) ratio at 1.69% which is one of the lowest in the banking industry, demonstrating higher asset quality of the Bank. The Bank has successfully implemented and complied with the new Accounting Standard on leases - SLFRS 16, which came into effect from January 1, 2019.

Thereby, a sum of Rs. 895.8 mn of new asset was recognised and disclosed under ‘Right of used assets’ in the financial position for the period ended June 30, 2019. Complying with the Central Bank of Sri Lanka (CBSL)’s directions on capital requirements under Basel III, the Tier 1 and total capital adequacy ratios of the Bank as of 30th June 2019 were 12.647% and 15.197% respectively, well above the statutory minimum requirements (10% and 14% respectively).