First Nine Months of 2021: NSB PAT up 259% to Rs 16B

CEYLON TODAY | Published: 2:10 AM Nov 30 2021
FT First Nine Months of 2021: NSB PAT up 259% to Rs 16B

NSB records sensational performance beating all the odds during a pandemic. It’s highest ever profit for a period of nine months with a Profit Before Tax (PBT)of Rs 20.3 billion and a Profit After Tax (PAT) of Rs 15.6 billion, the National Savings Bank (NSB) shows its ‘Covid’ resistance, strength and continuous financial resilience.

This marks an increase of 170.6% from Rs 7.5 billion recorded in the same period last year, while the PAT was Rs 15.6 billion, with an increase of 258.6% from Rs 4.4 billion in 2020.

Gross Income of the Bank grew by 5.8% to Rs 99.2 billion during the nine months of the year from Rs 93.7 billion recorded in the corresponding period, last year. During the period under review, the interest income has increased by 6.8% to reach Rs 96.9 billion, while the interest expense has decreased by 15.7% to Rs 56.7 billion due to the prevailing lower interest rate structure which led to lower interest expenses for the deposits as well as borrowings despite the substantial growth in the deposit base during the nine months. 

The increase in interest income together with the considerable reduction in interest expenses supported Net Interest Income (NII to surge by 71.6% to Rs 40.1 billion against that stood at Rs 23.4 billion during the same period last year. Consequently, Net Interest Margin (NIM) clocked in 3.68% at the end of nine months of 2021, higher against the 2.56% as at the same period last year. 

Net Fee and commission income grew by 46.1% to Rs 2 billion from Rs 1.4 billion mainly driven by the increase in fee and commission income due to conversion/renewal of the existing loans to reduced interest rates as well as increased foreign remittances and coupled with fees generated through digital platforms to where the customers shifted under social distancing and health guidelines. The increase both in NII and Non-Interest Income led the total Operating Income to record a rise of 60.6% to Rs 42.3 billion as at the end of 30 September 2021. 

Operating expenses during the period of nine months of 2021, rose by 21.9% to Rs 14.6 billion compared to the corresponding period of the previous year, which is mainly attributable to the increased personnel expenses owing to the provisions made for the Collective Agreement falling due in 2021. Meanwhile, the Bank’s cost to income ratio decreased to 34.7% at the end of the third quarter of 2021 compared to 45.7% reported in the third quarter of 2020.

Impairment charges during the period under review decreased to Rs 2.8 billion by 38.3% compared to the same period in the last year. The Bank has carried out a prudent approach when calculating the impairment charges, considering that the outbreak of COVID-19 has caused disruption in business and economic activities, along with the uncertainty and volatility prevailing in the global and local economy and other holistic factors. However, the gross NPL ratio increased to 3.51% mainly owing to the reclassification of some loans and advances under debt and other instruments.

The Bank generated a Return on Equity (RoE) of 34.86% and Return on Assets (RoA) of 1.86% at the end of September 2021. The total asset base of the Bank grew at 13.6% to reach Rs 1.55 trillion against the Rs 1.36 trillion reported as at the end of December 2020 mainly contributed by the growth in customers’ deposits, which increased by 12.7% to Rs 1.39 trillion compared to the deposit base reported at the end of December 2020. 

There is an increase in the pattern of saving of the customers despite the impact of COVID-19 on the economy and lifestyle of customers. During the nine months ending 30 September 2021, the Bank has mobilised Rs 158.2 billion and continued the momentum of mobilising low-cost funds during the period under review by mobilising Rs 44.2 billion.

Loans and advances witnessed only an increase of 2.7% to Rs 530.8 billion over the last year December figure of Rs 516.8 billion underpinned by the conversion of Rs 59.4 billion loans and advances under ‘Debt Instruments’. 

CEYLON TODAY | Published: 2:10 AM Nov 30 2021

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