NSB deposit mobilisation exceeds target

The National Savings Bank (NSB) recorded a deposit mobilisation of Rs. 22.26 billion during 2005 as against the target of Rs. 19.5 billion. The bank recorded a pre-tax profit of Rs. 3.45 billion. The amount mobilised in 2004 was Rs. 18.9 billion. The total deposits grew by 12.4 percent to Rs. 202.4 billion at end 2005.

NSB recorded a satisfactory performance in deposit mobilisation and profit. The bank surpassed the deposit base of Rs. 200 billion by the end of 2005. The postal sector accounts for 6.0 percent of the total deposits base, Deputy General Manager, Finance, Planning and Asset Management (NSB) H. M. Hennayake Bandara said.

The bank's gross income increased by 9.6 percent to Rs. 21.2 billion against Rs. 19.35 billion reported in 2004. While interest income grew by Rs. 6.0 percent the interest expenses increased by Rs. 18.9 percent to Rs. 13.47 billion during the year under review.

The increase in interest expenses was because the bank decided to offer higher interest rates for deposits in the second half of the year for the benefit of customers. This was the reason for the drop in operating profit by 5.8 percent compared to the previous year, Bandara said.

Bandara said" The investment portfolio of the bank focused on creating a well-diversified portfolio to earn a maximum return at a moderate level of risk. Pro-active investment strategies were followed by giving priority to selected investments which earned above average returns for the portfolio. One of the notable achievements of the bank is that it obtained the AAA (sri) rating, the only bank to achieve this accolade. Another milestone in the bank's achievements is the 14.6 million account holders recorded last year.

The equity portfolio of the bank followed proactive trading strategies while focusing on investment of capital preservation, liquidity and maximum return at a moderate level of risk. The year was special because the bank's equity portfolio produced a capital of Rs. 858 million and a dividend of Rs. 90 million.

In a competitive market, the bank offered attractive and flexible rates compared to other loan products in the market. Due to this factor the bank's housing loan portfolio grew from Rs. 9.27 billion in 2004 to Rs. 11.18 billion in 2005. The disbursement of funds during the year was Rs. 3.11 billion against Rs. 3.31 in 2004.

The bank's contribution to the government for the past three years was Rs. 8.7 billion of which Rs. 3.2 billion was contributed in 2005. This included nearly Rs. 1.3 billion by way of income tax and Rs. 1 billion to the consolidated fund.

The bank performed a unique social responsibility as a mobiliser of public savings and catalyst of national growth. The bank distributed 130 pass books to children in the North and East. The bank sponsored the NSB Pensioners' Society and donated books to the Dehiwela-Mt. Lavinia Municipal Council.

(LF)