NSB reports pre-tax profit of Rs. 1.8 billion

Half year results of National Savings Bank shows remarkable performance by the bank recording a pre-tax profit of Rs. 1.8b, a growth of 18% compared to the corresponding period for the year 2007.

Additional General Manager Hennayake Bandara stated that Bank’s Operating Profit from Ordinary Activities before taxes increased to Rs 2.4 bn recording a growth of 27% over the same period last year, while profit after tax for the period marginally declined by 1.5% to Rs. 808 mn. One of the reasons for the decrease in after tax profits is due to the change of computation method of financial VAT by the authorities. As a result, effective tax rate of the Bank increased to 67% from 57%, compared to corresponding period last year. Taxes imposed on banking industry have and will have a direct impact in sustaining the growth in profitability.

NSB’s net interest income grew to Rs 4.7 bn, a growth of 19% during the first half of 2008 compared with 2007. The interest expenses of the Bank increased by 53.2% to Rs.14.9 bn, this was mainly due to the high interest rates paid to the customers. NSB has mobilized Rs.9.3bn in deposits during the period while increasing total deposits to Rs.243bn and total assets of the Bank stood at Rs 279Bn at end June 2008. Bank’s non interest expenses grew only by 16% to Rs 2.3 bn during the first half when compared to the same period in 2007. Personnel costs have been well managed with an increase of only 7.7% to Rs 1.7 bn when compared to corresponding period last year.