Generating a record-breaking profit for the year NSB records sensational performance beating all the odds during a pandemic which had a wide-ranging impact of the Bank, employees, customers and economy. our continued focus on financial resilience enables us to remain strong and achieve a solid performance. The performance of the Bank over the year was characterized by strength and resilience. The Bank recorded its highest ever profit for the year with a Profit Before Tax (PBT) of Rs. 28.4Bn which marks an increase of 81.4% from Rs. 15.6Bn recorded in the same period last year, while the PAT was Rs. 22.1Bn, with an increase of 118.8% from Rs. 10.1Bn in 2020.

Gross Income of the Bank grew by 5.8% to Rs. 134.9 Bn during the year from Rs. 127.5Bn recorded in the corresponding period, last year. During the period under review, the interest income has increased by 7.3% to reach Rs. 131.4Bn, while the interest expense has decreased by 12.3% to Rs. 76.8Bn 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. 54.6Bn against Rs. 34.9Bn 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. 2.8Bn from Rs. 2.6Bn 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. 57.9Bn at the end of year 2021. Operating expenses during the period of 2021, rose by 23.3% to Rs. 19.1Bn 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. Meanwhile, the Bank’s cost to income ratio decreased to 33.29% at the end of the year 2021 compared to 39.28% reported in the year 2020.

Impairment charges during the period under review decreased to Rs. 4.3Bn by 11.7% compared to the same period 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 2.97% compared to 2.79% reported in the same period last year mainly owing to the to the reclassification of some loans and advances under debt and other instruments.

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. 1.58Tn 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 Covid 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”. However, without taking the converted loans into consideration, the total loans and advances demonstrated a growth of 17.8%, triggered by personal loans as well as loans to State Owned Enterprises (SOEs).

Complying with the direction of the Central Bank of Sri Lanka (CBSL), the capital position of the Bank remained strong and stood well above the revised minimum statutory requirements imposed by the regulator consequent to the COVID-19 pandemic. The Tier 1 Capital and Total Capital ratios stood at 18.60% and 20.83% respectively at the end of 2021 well above the statutory requirements of 8.00% and 12.00% respectively. The leverage ratio of 8.92% too was well above the minimum requirement of 3.0%.

To foster a saving culture among all Sri Lankans that comes from all segments of the society, and work towards financial and digital inclusion, we focus on strengthening our digital as well as physical footprint. the Bank has increased its branch network to 261 branches along with 292 ATMS and 92 CRMs as of 31.12.2021. Further, the Bank has introduced a mobile payment system under the brand name of “NSB Pay” App to encourage customers to accomplish their daily banking needs safely and efficiently providing an uninterrupted service to the customers during these difficult times.

The ICRA Lanka Limited has assigned the Bank with the issuer rating of [SL] AAA with Stable Outlook, on the back of 100% ownership of Government of Sri Lanka (GoSL) and the 100% explicit guarantee provided by the GoSL for the money deposited with the Bank and the interest thereof through the National Savings Bank Act. The Bank has been awarded the 5th most valuable brand in Sri Lanka by the Brand Finance Lanka Ltd with a brand value of USD 166Mn. The Bank has also been recognized as one of the 10 Most Admired Companies in Sri Lanka in 2021 by the International Chamber of Commerce Sri Lanka (ICCSL), in collaboration with the Chartered Institute of Management Accountants (CIMA).

NSB contributes immensely to the wellbeing of the citizens of the country and the development of the economy as one of the biggest lenders in the Banking sector. Whilst facilitating the growth in national home ownership, opening a pathway towards economic security and mobility for thousands of customers, the Bank operates as one of the biggest lenders to the Government and the second largest holder of Government securities. Further, the Bank is an enthusiastic partner in the Government’s long-term infrastructure and socioeconomic development projects, in addition to contributing to the General Treasury by way of taxes, levies, fees, and dividends.