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| Sunday, 13 April 2003 |
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192% growth in NSB's pre-tax profit National Savings Bank (NSB), the third largest bank in the country, recorded a pre-tax profit of Rs 2,274 million in 2002 compared to Rs 779 million recorded in 2001. This is an increase of 192 per cent. The bank mobilised Rs 15.7 billion in deposits during the year. The deposit base increased from Rs 118.8 billion as at 2001 to Rs 134.5 billion as at end of 2002, an increase of 13 per cent. "It is notable that the Northern and Eastern Provinces mobilised Rs 2.275 billion in 2002 as against Rs 1.6 billion in 2001, an increase of 37 per cent," said NSB Chairman D.M. Swaminathan. Investments in government debt instruments increased from Rs 94 billion in 2001 to Rs 112 billion in 2002, which represents 83 per cent of the total investment portfolio. Loans and advances increased by Rs 2.3 billion to Rs 17 billion. The bank was able to increase its housing loan portfolio by one billion rupees during the year to Rs 5.8 billion. The interest income of the National Security Levy increased from Rs 15.4 billion to Rs 16.8 billion. Other income amounted to Rs 798 million which includes gains from investment securities amounting to Rs 689 million. The favourable movement in the share market in response to the ongoing peace initiatives enabled the bank to earn a profit of Rs 123 million from share trading. The pre-tax profit of Rs 35 million from NSB Fund Management Co Ltd, the wholly-owned subsidiary of NSB, contributed to record a group profit of Rs 2,310 million. The post-tax profit of Rs 1,590 million was an increase of 128 per cent over the Rs 695 million achieved in the previous year. The bank introduced two new products, Sthree and Friends, during the year while a free life insurance cover was introduced for all savings accounts. A new deposit scheme was also introduced for senior citizens with an additional interest rate of 1.5 per cent paid over and above the published rate as a social obligation. However, the placement with other financial institutions showed a decrease compared to the previous year as the investment opportunities in the capital market were limited due to the excess liquidity situation in the market and the low demand for capital. NSB is targeting a depositor growth of Rs 17 billion for 2003 while it has already recorded Rs 8.5 billion in the first quarter of the year. Lending to the non-governmental sector is expected to increase with several large-scale infrastructure projects involving the private sector. First Lankan bank to get SL AAA rating NSB is the first Sri Lankan bank to receive the SL AAA rating from Fitch Ratings (Lanka) Limited. "The rating clearly indicates extremely low credit risk and the ability to meet its financial commitments to investors" - Ravi Abeysuriya, CEO and Managing Director Fitch Ratings Lanka Ltd The rating was based on the bank's high exposure to low risk government securities, prudent investment decisions, extremely low non-performing loans, strong financial ratios and the dominant position in the deposit mobilisation market."The rating will make the transition for diversification into other fee-based segments much easier in terms of attracting a stronger customer base which is expected to be made up of domestic as well as overseas clients" -Swaminathan |
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