State-owned National Savings Bank (NSB), recording its highest-ever profit for a period of six months (first half of 2021) with a Profit Before Tax (PBT) of Rs. 13.9 billion and a Profit After Tax (PAT) of Rs.11 billion, has shown strength and financial resilience in performance amidst the heightened uncertainty due to the COVID-19 pandemic.
Against the backdrop of the COVID-19 impact on the economic activities, the PBT for the first six months of 2021 was an increase of 492.1 per cent from Rs. 2.3 billion recorded in the same period last year, while the PAT was an overwhelmingly increase of 942.7 percent from Rs. 1.1 billion in 2020, the bank said in a media release.
Gross Income of the bank grew by 9.3 per cent to Rs. 65.8 billion during the first six months of the year from Rs. 60.2 billion recorded in the corresponding period, last year. During the period under review, the interest income has increased by 8.5 per cent to reach Rs. 64.1billion, while the interest expense has decreased by 18.8 per cent to Rs. 37.9 billion 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 first half of the year.
“Even though the NPL (non-performing loans) increased during the first half of 2021, its rise during the period was relatively lower compared to 1H 2020. This led to the impairment charges during the period under review decreasing by 38 per cent to Rs. 1.4 billion compared to the same period in the last year. The bank has carried out a prudent approach when calculating the Impairment charges, considering that the outbreak of COVID-19 has caused disruption in business and economic activities, along with the uncertainty and volatility prevailing in the global and local economy and other holistic factors. However, the gross NPL ratio increased to 3.16 per cent mainly owing to the reclassification of some loans and advances under debt and other instruments,” it stated.
Loans and advances witnessed a decline of 2.5 per cent to Rs. 504.1 billion over the 2020 December figure of Rs. 516.8 billion and was underpinned by the conversion of Rs. 59.4 billion loans and advances under the ‘Debt Instruments’.
However, without taking the converted loans into consideration, the total loans and advances demonstrated a growth of 10.2 per cent, triggered by personal loans as well as loans to State-Owned Enterprises (SOEs), the release said