Thursday, 20 November 2014 01:00
Savings giant NSB said yesterday it has recorded a profit before tax of Rs. 6 billion for the nine-month period ended 30 September 2014, a rise of 492% from Rs. 1 billion recorded in the corresponding period last year. Net profit recorded an increase of 679% to Rs. 3.5 billion from Rs. 445 million recorded in the same period last year.
The Bank mobilised Rs.45 billion deposits during the nine-month period, recording a growth of 7.5%. Savings deposits accounted for a large share in mobilisation, which is a significant improvement in the deposit mix of the bank. The deposit base of the bank stood at Rs. 539.9 billion as at 30 September.
Total assets grew by 11.5% to Rs. 729.4 billion as at 30 September 2014. The growth was mainly supported by the issuance of a $ 250 m bond in early September. The five-year bond was priced at a 5.15% yield, which was a significant milestone for the bank, having achieved the lowest yield by a Sri Lankan issuer.
Loans and advances to customers recorded a growth of 11.7% compared to industry growth of 5% during the period. Held-to-maturity financial assets, which mainly consist of Treasury bonds, grew by 14.9% to reach Rs. 496.9 billion.
Interest income increased by Rs. 8.6 billion to Rs. 54.6 billion, recording growth of 19%, while interest expenses increased marginally by 1.2% to Rs. 40.1 billion during the nine-month period from Rs. 39.7 billion recorded in the same period last year.
Higher growth of interest income and comparatively lower increase in interest cost contributed to increase net interest income by 128% to Rs. 14.5 billion by end of September 2014 from Rs. 6.4 billion recorded at the end of September 2013. This resulted in improving the net interest margin to 2.8% by the end of September 2014 from 1.6% recorded at the end of 2013.
Return on average assets (before tax) improved to 1.1% at 30 September 2014 from 0.4% recorded at the end of 2013. Return on average equity rose to 19.5% by the end of September 2014 from 5.1% recorded at the end of 2013. The cost-to-income ratio favourably improved to 45.3% by the end of September 2014 from 66.7% recorded at the end of 2013 and the improvement was mainly due to the increase in net interest income.
The bank’s capital strength was reflected in ratios that were well above the regulatory standards for well-capitalised banks, with a Tier 1 ratio of 17.6%, and total capital adequacy ratio of 15.99% at 30 September 2014. The bank’s liquidity ratio stood at 90.9% as at 30 September 2014.
The Group’s post-tax profit increased by 518% to Rs. 3.7 billion as at end September 2014 from Rs. 592 million recorded at the end of September 2013.
The bank introduced the ‘NSB Divi Surakum’ pension plan, catering to the financial needs of all senior citizens of the country and thereby ensuring a stable retired life by means of a pension which is imperative in furnishing better living standards for the nation.
‘NSB Divi Surakum’ will be a helping hand and an immense relief to many generations in the country; from the Sri Lankan senior citizens who desired financial independence during their retirement to the young who wish for a secure retired life in the future.
Emphasising on the rural economic development, the bank introduced a ‘loan cluster’ in September 2014, which comprised of loans for small and medium scale entrepreneurs and promotion of pawning, which has supported financial inclusion.