NSB steadies COVID-19 ship with firm 2020 results
View(s):The performance of National Savings Bank (NSB) in 2020 has been characterised by strength and resilience, recording its highest ever profit.
Despite the heightened uncertainty due to the impact of COVID-19 which has triggered a wide range of shocks on the bank, employees, customers and economy, its continued focus on financial resilience enabled the bank to remain strong and achieve a solid performance.
In a media release, the bank said it recorded its highest ever Profit Before Tax (PBT) and Profit After Tax (PAT) in 2020, both of which were aided by the Government’s stimulus initiatives introduced in late 2019.
Against the backdrop of COVID-19 impact on the economic activities, the PBT was Rs. 15.6 billion, a 49.5 per cent increase from Rs. 10.5 billion in 2019 while the PAT of Rs. 10.1 billion is a 58.4 per cent increase from Rs. 6.4 billion in 2019. A dividend of Rs. 1.0 billion was paid for the financial year under review.
“As one of the biggest lenders in the housing market in Sri Lanka, the NSB facilitates the growth in national home ownership, opening a pathway towards economic security and mobility for hundreds of thousands of customers. Beyond contributing to the General Treasury by way of taxes, levies, fees and dividends, and being the second largest holder of Government securities, the bank is one of the biggest lenders to the government and is an enthusiastic partner in the Government’s long-term infrastructure and socioeconomic development projects,” the release said.
Commenting on the performance, NSB Chairperson, Keasila Jayawardena said: “While the figures demonstrate the solid performance of the bank, a deeper dive into the numbers must consider the context of the year. During the first wave of COVID-19 infection in late March 2020, the banking service was declared an essential service during the crisis and ensuing lockdowns. All the bank’s branches across the country were kept open to offer an uninterrupted service to our customers. The bank also allocated three mobile units to provide its customers with service at their doorstep.”
NSB General Manager / CEO, Ajith Peiris said the total asset base of the bank grew by 17.8 per cent to Rs. 1.4 trillion as at end December 2020 from Rs. 1.2 trillion as at end December 2019.
The bank reported a Gross Income of Rs. 127.5 billion for 2020, achieving a growth of 4.6 per cent mainly driven by the 3.2 per cent rise in Interest Income, the largest component, to Rs. 122.5 billion as well as Fee and Commission Income which has increased by 114.9 per cent to Rs. 2.7 billion compared to last year.
The bank’s profitability was further enhanced by the removal of the Nation Building Tax (NBT) and Debt Repayment Levy (DRL) on financial services and favourable changes to the deposit mix with the savings deposits to total deposits ratio increasing to 22.6 per cent in 2020 from 21.5 per cent in 2019, providing the bank with a source of low-cost funding.
The statement said that during the year under review, the bank disbursed Rs. 31.4 billion in loans for infrastructure projects to State Owned Enterprises and the bank also positioned itself to finance further long-term projects in future through diversifying the bank’s sources of funding. The bank raised Rs. 5 billion through the issuance of a perpetual debenture. The bank recorded its highest ever mobilisation of deposits by mobilising Rs. 221.9 billion during the year.