FT

NSB’s pre-tax profit up 39% to Rs. 7.8 b

Thursday, 25 November 2010 01:31 -     - {{hitsCtrl.values.hits}}

NSB’s profit before tax recorded a growth of 39% to Rs. 7.8 billion and post-tax profit increased by 40% to Rs. 4.6 billion over the corresponding period of 2009.

Highlighting the performance during the past nine months, NSB General Manager Hennayake Bandara said: “The Bank’s financial performance in the first nine months is a testament to the successful realignment of its business which has seen a broadening of retail businesses across the country. We remain optimistic about the Bank’s performance for the remainder of the year.”



The focus on balance sheet management has delivered an increase in net interest income in the third quarter through growth in the lending book, albeit at a lower average yield and reduction in the average cost of funds.



The Bank has successfully maintained its net interest margin at 4.4% for the nine months ended 30 September 2010 compared with 4.0% for the same period in 2009.

The Bank’s total operating expenses were up by 9% to Rs.4.3 billion for the nine months ended 30 September 2010 from Rs.3.9 billion in the same period in 2009.

During the period  staff costs increased by 4%, whilst premises, equipment and establishment expenses went up by 14% due to continued investment in expansion of delivery channels and improvement in customer service capability.

Operating income was up by Rs.2.9 billion to Rs.10.2 billion recording a growth of 39% for the nine months ended 30 September 2010. This was mainly due to the exceptional gains from secondary market dealings in both equity and government securities.

The Bank’s effective overall tax rate inclusive of VAT on financial services was 55% for the period.

Loans and advances grew by 15% to Rs.76 billion at 30 September 2010 compared with the end of 2009. Housing loan disbursements recorded a growth of 120% compared to same period of last year. During the nine month period non-performing loans reduced by 10.0%. Asset quality remains strong with the non-performing loan (NPL) ratio of 2.9% at 30 September 2010, reducing from 3.8% at 31 December 2009. The decline in the NPL ratio was mainly due to increase in total loans & advances and efforts on recovery.

The Bank’s total assets were up by 9% to Rs.385 billion at 30 September 2010 compared with the end of 2009 reflecting, primarily, the increase in investments in government securities and loans and advances.

During the first nine months Bank’s Savings deposits have recorded a growth of 14%  and aggregated customer deposits were Rs.341.0 billion as at 30 September 2010, representing an increase of 9% from Rs.313.0 billion as at 31 December 2009.

Tier 1 and Tier 2 capital for the Bank were 17.7 % and 14.0 % compared with the regulatory minimum of 5% and10% respectively.

The Group’s Operating Profit from Ordinary Activities before Taxes increased to Rs.10.8 billion recording a growth of 25% over the same period of 2009, while Profit after Tax for the period increased to Rs.4.9 billion recording a growth of 23%.  

Fitch Ratings Lanka for the eight consecutive year reaffirmed the AAA credit rating for the Bank in September and NSB remains the only local bank to receive AAA credit rating.

Hennayake concluded “we will continue to maintain our focus on liquidity, credit quality and investments, which we believe represent the key ingredients of success in today’s volatile environment.”



FT Quote

The Bank’s financial performance in the first nine months is a testament to the successful realignment of its business which has seen a broadening of retail businesses across the country. We remain optimistic about the Bank’s performance for the remainder of the year - NSB General Manager Hennayake Bandara

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