NSB posts record -breaking profits amidst woes
Generating a record-breaking profit for the year National Savings Bank (NSB) recorded a sensational performance, beating all the odds during a pandemic which had a wide-ranging impact on the Bank, employees, customers and economy.
NSB recorded its highest ever profit for the year with a Profit Before Tax (PBT) of Rs. 28.4 billion which marks an increase of 81.4% from Rs. 15.6 billion recorded in the same period last year, while the PAT was Rs. 22.1 billion, with an increase of 118.8% from Rs. 10.1 billion in 2020.
Gross Income of the Bank grew by 5.8% to Rs. 134.9 Bn during the year from Rs. 127.5 Bn recorded in the corresponding period, last year. During the period under review, the interest income has increased by 7.3% to reach Rs. 131.4 Bn, while the interest expense has decreased by 12.3% to Rs. 76.8 Bn due to the prevailing lower interest rate regime which leads to lower interest expenses for the deposits as well as borrowings despite the substantial growth in the deposit base during the period considered. The increase in interest income together with the considerable reduction in interest expenses supported Net Interest Income (NII) to surge by 56.6% to Rs. 54.6 Bn against Rs. 34.9 Bn stood during the same period last year. Consequently, Net Interest Margin (NIM) clocked in 3.71% at the end of 2021 recording the highest during the ten years period and higher against the 2.77% reported as at the same period last year. Net Fee and commission income grew by 11.2% to Rs. 2.8 Bn from Rs. 2.6 Bn mainly driven by the increase in fee and commission income due to conversion/renewal of the existing loans to reduced interest rates as well as increased foreign remittances and coupled with fees generated through digital platforms to where the customers shifted under social distancing and health guidelines. The increase both in NII and Non-Interest Income led the total Operating Income to record a rise of 45.6% to Rs. 57.9 Bn at the end of 2021.
Operating expenses during the period of 2021 rose by 23.3% to Rs. 19.1 Bn compared to the corresponding period of the previous year, which is mainly attributable to the increased personnel expenses owing to the provisions made for the Collective Agreement due in 2021. Impairment charges during the period under review decreased to Rs. 4.3 Bn by 11.7% compared to the same period last year. The Bank generated a Return on Equity (RoE) of 33.92% and Return on Assets (RoA) of 1.93% at the end of 2021.
The total asset base of the Bank grew at 15.8 % to reach Rs. 1.58 Tn against the Rs.1.36 Tn reported as at the end of December 2020 mainly contributed by the growth in customer deposits, which increased by 15.5% to Rs. 1.43 Tn compared to the deposit base reported at the end of December 2020. There is an increase in the pattern of saving of the customers despite the impact of C-19 on the economy and lifestyle of the customers.
During the period under review, the Bank has mobilized Rs.192.6 Bn and continued the momentum of mobilizing low-cost funds during the period under review by mobilizing Rs.46.7 Bn. Loans and advances witnessed only an increase of 4.3% to Rs. 538.9Bn over the last year December figure of Rs. 516.8Bn underpinned by the conversion of Rs.59.4 Bn loans and advances under the “Debt Instruments”.