NSB posts Rs. 7.2 BN PAT in 2023
National Savings Bank demonstrated its mettle by recording a Profit After Tax (PAT) of Rs. 7.2 billion for the fiscal year ended December 31, 2023, a testament to its adept management and highly skilled workforce.
The Banks’ achievement of Rs. 7.2Bn PAT was mainly surged by 31% increment of Interest Income. The Bank strategically allocated more than 60% of its customer deposits investing in Government Debt Securities capitalizing on the higher interest rates prevalent in 2022.
This prudent investment strategy yielded a substantial interest income of Rs. 137.7Bn which was an upswing of 36%. Interest received through Loans and Advances also grew by 36.3%, an increment of Rs. 23.4 Bn.
Net Gain from trading rose up to Rs. 3.7Bn at the group level which was a 206% increase from last year where NSB recorded a loss from trading.
The Bank however, encountered challenges in net fee and commission income, witnessing a 34% decline due to subdued demand for loans and advances amid higher interest rates then prevailed. Exceeding the growth rate of Interest Income, the Interest Expense of the Bank also increased by 41% year-over-year (YoY). This rise in the cost of funds, particularly from Fixed Deposits which represent the largest portion (81%) of NSB’s deposit base, contributed to a congestion in the positive growth of Net Interest Income due to the lag effect of liability repricing.
Impairment charges of the Bank decreased by 12% in 2023 compared to the same period last year. In terms of Asset Quality, with all the obstacles, NSB has one of the lowest Impaired Loans (Stage 3) Ratio 2.41% (net of stage 3 impairment) compared to the industry rate of 7% at the end of fiscal year 2023. Personnel and other expenses were increased by 17% and 16% respectively being in consistent with inflationary situations globally. The Bank recorded a PBT of Rs. 4.3 Bn which was a 5% decrease from last year. The Bank was able to grow its deposit base by Rs. 5.8Bn and its investment portfolio grew by Rs 62.4Bn amidst the low demand for loans and receivables and the Bank’s strategic move to flow its interest earning assets to a most profitable alternative available. Total Asset base remarked to Rs. 1.7Tn in 2023 showing a markup of 4% compared to last year. The Bank generated 9.36% of ROE and 0.26% of ROA (Before Tax) in 2023.
The Banks’ Common Equity Tire 1 Capital Ratio was 15.3% at the end of 2023 (minimum requirement -7%) where industry score was 13.4%. Tier 1 Capital Ratio of NSB was 16.9% (minimum requirement – 8.5%) where industry score was 13.8% at the end of 2023.
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