NSB achieves robust growth in 1Q

• PBT doubles to Rs. 12.2 b
• ​Total assets now at Rs. 1.8 t

The National Savings Bank (NSB) has begun the financial year 2025 on a resounding note, showcasing impressive profitability and operational resilience for the quarter ended 31 March 2025. In a strong affirmation of its strategic focus and disciplined financial stewardship, the Bank reported a 124% year-on-year increase in Profit After Tax (PAT), surging to Rs. 7.59 billion, up from Rs. 3.39 billion in the corresponding period of 2024.

Despite a marginal dip in gross income, which stood at Rs. 50.28 billion compared to Rs. 54.18 billion in 1Q2024, the Bank recorded a substantial 44% growth in Net Interest Income (NII), reaching Rs. 20.26 billion. This was achieved through active asset-liability management, with interest expenses significantly reducing to Rs. 28.74 billion.

The Bank’s total operating income grew by 42.47%, driven by not only strong interest earnings but also a 17.35% rise in non-interest income, signalling the successful diversification of its revenue streams. A notable development during the quarter was the impairment reversal of Rs. 1.57 billion, compared to just Rs. 270 million in 1Q2024, attributed to focused credit risk management and recovery efforts by the bank. Consequently, net operating income increased by 50.19% to Rs. 23.03 billion from Rs. 15.33 billion reported a year ago.

The Bank continued to exercise stringent cost controls, with operating expenses rising only 1.5% year-on-year. Operating profit before taxes on financial services surged 93.98% to Rs. 15.66 billion, while taxes on financial services rose by 56.30%, amounting to Rs. 3.49 billion. After accounting for income tax expenses of Rs. 4.57 billion, NSB concluded the quarter with a PAT of Rs. 7.59 billion, affirming its strong trajectory of sustainable profitability.

National Savings Bank Chairman Dr. Harsha Cabral, PC said: "Our exceptional performance in the first quarter of 2025 is a testament to NSB’s strategic vision, sound governance, and relentless pursuit of financial excellence. The remarkable growth in profitability, despite an evolving economic landscape, underscores our resilience and the trust we continue to inspire across the nation. We are committed to building on this momentum to further strengthen our contribution to Sri Lanka’s economic progress."

NSB General Manager/CEO Shashi Kandambi said: “The first quarter of 2025 has clearly demonstrated NSB’s ability to adapt, innovate, and lead with precision. Our success in expanding margins, managing costs, and improving asset quality reflects the strength of our strategic execution and the agility of our teams. As we continue to digitalize operations and broaden our service offerings, we remain focused on delivering inclusive value to our stakeholders and strengthening our position within the banking sector."

NSB's total assets expanded to Rs. 1.78 trillion, up from Rs. 1.75 trillion at the end of December 2024. The investment portfolio comprising Government securities, equities and debt instruments grew by 4.19% to Rs. 1.12 trillion over the three months period.

Deposits increased to Rs. 1,564 billion during the first three months from Rs. 1,556 billion reported at the close of financial year 2024.

The key performance indicators also exhibited strong performance across all key financial and regulatory metrics, as reflected in the Bank’s financial position as of 31st March 2025.

NSB continued to maintain a fortified capital position, significantly surpassing the regulatory thresholds stipulated under Basel III. As of 31st March 2025, the Bank reported a Tier 1 Capital Ratio of 22.60% and a Total Capital Ratio of 25.03% both comfortably above the minimum requirements.

NSB’s liquidity profile remained exemplary, with the Liquidity Coverage Ratios for both rupee and all-currency categories exceeding 347%, far surpassing the 100% regulatory requirement. The Net Stable Funding Ratio improved to 200.43%, reflecting the Bank’s prudent maturity transformation practices and its robust funding base.

Demonstrating the success of enhanced credit risk management strategies, the Bank reported a marked reduction in its impaired loans. The Impaired Loans (Stage 3) to Total Loans ratio improved to 3.30% from 5.18% at the end of 2024, while the Stage 3 loan coverage ratio also increased to 55.94% from 44.50%, reaffirming the strength of its provisioning discipline.

NSB delivered a stellar improvement in profitability, driven by strategic asset-liability realignment and cost efficiency. The Net Interest Margin (NIM) rose to 4.65% from 4.23%, reflecting effective yield optimization. Return on Assets before tax reached 2.79%, while Return on Equity surged to a remarkable 30.09%, up from 18.07% in December 2024. Further, the Bank’s operational efficiency improved notably, with the Cost to Income Ratio declining to 34.58% from 38.72%.

"These results reflect our ability to navigate a dynamic economic environment while maintaining strong financial discipline. We remain committed to driving long-term value for our stakeholders through prudent risk management, strategic investments, and exceptional customer service,” added GM/CEO Kandambi