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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2732

National Savings Bank – income up but profits down for 2005

By Quintus Perera – Asian Tribune

Colombo, 11 June, (Asiantribune.com):The income of the National Savings Bank (NSB) grew by 9.6 percent to reach Rs 21.2 billion in 2005 even tough the net profit for the year was down to Rs 2.1 billion compared to the Rs 3.1 billion registered in 2004, reveals E Narangoda, General Manager/CEO in the recently released 2005 Annual Report of NSB.

The decline in the net profit is attributed to the increase in interest expenses and corporate taxes.

Out of the total income accrued interest income on loans and advances climbed to 32 percent to reach Rs 2.7 billion and interest costs on deposits also grew to 18.2 percent as the Bank raised rates in the second half of the year.

The Bank mobilized deposits worth around Rs 22 billion despite the comparatively low interest rates and intense competition from other banks. The Bank’s remote branches made a strong contribution and non-interest income rose by 237.5 percent to reach over Rs 1.0 billion mainly due to an increase in profits from share trading.

NSB’s equity portfolio was the best performer recording capital gain of Rs 858 million. This excludes the dividends worth Rs 90 million and together they realized a combined return of almost 47.8 percent.

Narangoda indicated in the Report NSB intention to tap the retail market and also housing on a priority basis. Last year the housing loan portfolio of NSB increased to Rs 11.18 billion from Rs 9.27 billion in 2004, a 20.6 percent increase.

Over the next few years NSB plans to spend Rs 600 million to upgrade their IT system and by 2007 to be in part with the local market in achieving the Bank’s goal to ensure stronger customer focus and greater customer flexibility. Last year NSB has automated 19 branches Narangoda indicated staff training is receiving priority status and last year 300 were trained and 62 were trained in overseas. NSB has also recruited 300 new staff.NSB is also taking steps to face the problem of the aging staff as in about 3 to 4 years a large number of the staff would retire.

- Asian Tribune -

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