NSB ups after tax profit by 24% to Rs. 4.78 b

Savings giant NSB has posted a Profit After Tax (PAT) of Rs. 4.78 billion in the first half of this year, up by Rs. 3.86 billion or 24% from a year earlier.

The bank said the performance was most noteworthy considering the challenges it had to face from January to June 2016. These obstacles included a weak equities market environment and mark to market losses on account of increases in interest rates on investments in Government securities.

Total assets of NSB reached Rs. 875 billion, fuelled by satisfactory growth in both retail and corporate lending. The total lending portfolio growth of 10.6% for the first half of 2016 was comparable with the previous year.

In another positive development, the bank improved its asset quality considerably with a decrease in NPL ratio to 2% by June 2016 from 3.5% reported at the end of last year. Lower impairment provisioning assisted in enhancing profitability during this first half of the year. Net interest margins declined marginally on account of changes to the deposit mix, resulting in a higher cost of funds.

The bank’s Tier 1 capital adequacy ratio stood at 15.94% while the total capital adequacy for the reviewed quarter was 14.97%. These ratios however, remain well above the regulatory standards for well capitalised banks. The liquidity ratio of the bank stood at 75.19% by the end of June 2016, which is well above the regulatory requirement of 20%.

By the end of June 2016, the branch network of the bank reached 250 branches and the bank had added five new branches during the period under review.

The AAA Rating of the bank was reaffirmed for the 14th consecutive year by the Fitch Ratings Lanka. NSB is the only local bank to receive a AAA rating from Fitch Ratings and maintain the same for 14 years.