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.
CSE Director Board appoints new chairman
The Chairman of the Colombo Stock Exchange (CSE) Dumith Fernando who has served in this role since July 01, 2020, has informed the Board of his intention to retire by rotation on June 23, 2022 at the conclusion of his current term as a Director. Subsequently, at its regular monthly board meeting held on May 19th, 2022, the Board of the CSE has elected Director Dilshan Wirasekara to succeed Fernando as Chairman with effect from June 24th, 2022. Wirasekara is currently Director and Chief Executive Officer of First Capital Holdings PLC.According to the Articles of Association of the CSE, it’s Chair is chosen from among the five Directors elected by the members of the CSE. The appointment of Wirasekara is in line with the CSE’s normal board succession practice.
The outgoing Chairman Fernando said that “We are very pleased with the advancement of the CSE in the last 2 years. The market has set records across capital raising, trading volumes and participation alongside significant wealth creation for investors. The CSE is also financially stronger than it has ever been, and I am pleased to hand over my role following the institution’s highest-ever profitability and capital reserves position. Credit for this is due to my fellow board members, management and staff as well as all those stakeholders who collaborated with us including our regulator the Securities & Exchange Commission of Sri Lanka and the stock broking and investor communities.”
Commenting on the appointment of his successor, he further stated “I have had the pleasure of serving as a Director with Dilshan for five years where he has been a critical and energetic member of the board. The board and I have full confidence that he will continue to work with all stakeholders to build on our recent efforts to transform into a modern-day multi-product exchange. I look forward to supporting Dilshan over the next few weeks to ensure a smooth transition.”Wirasekara thanked both the outgoing chairman for his leadership of the CSE over the last 2 years and the CSE Board for the confidence placed in him. He further stated, “I hope to continue the good progress at the CSE and look forward to working with the Board and the CSE team together with the regulator and the industry to advance our ambitious capital market development plans.”
SLIM Research Bureau embarks on a mission to promote fair trade in Sri Lanka
As corporates and consumers globally are shifting towards best practices such as sustainability, inclusivity, and most importantly, equality to all, “fairness” has become a significant part of how business and buyer decisions are made.With this in mind, SLIM Research Bureau, the research arm associated with the Sri Lanka Institute of Marketing (SLIM), recently signed an agreement with Fairtrade NAPP at SLIM Home, in aspiration of promoting fair trade and consumption of fairly traded products in the local market of Sri Lanka.Through this collaboration, SLIM Research Bureau and Fairtrade intends to launch a project – named “SRI-PROM” funded by AICS, the Italian Agency for Development Co-operation, and supported by Fairtrade Italy – that aims to contribute to the social and economic strengthening of rural areas in Sri Lanka, through the development of much more profitable eco-sustainable supply chains for small farmers.
Commenting on the partnership, SLIM President Mr. Nuwan Gamage stated: “SLIM is thrilled to enter into this milestone partnership with Fairtrade NAPP to instil globally accepted best practices within the corporate circle that help achieve fair, equitable trade relationships. The project will be the first step in inviting businesses across industries to become a trailblazer that sets an example both in Sri Lanka and around the world. We look forward to expand these efforts further in the days to come.”The modern concept of fair trade refers to the ethical and sustainable sourcing of products, where workers and farmers at the foundational level of supply and value chains are treated fairly. This, in turn, offers consumers a powerful opportunity to reduce poverty through their purchases.
Fairtrade International Programme Consultant for Sri Lanka, Standards Committee Chair, and Oversight Committee Asia-Pacific Representative Mrs. Iresha Sanjeewanie noted: “Fairtrade takes a 360-degree approach to address a number of different issues and developmental challenges faced by small-scale producers and workers. Though Fairtrade Standards are a glum eye-opener into the implications of unfair trade, in a broader sense, it advocates reform-oriented research and pushes to raise the bar in trade.”
Bank of Ceylon sponsors Annual Sand Paving Ceremony at Jaya Sri Maha Bodhi Temple Anuradhapura
Invoking the blessings of the sacred “Jaya Sri Maha Bodhi” situated in the historic city of Anuradhapura, on the country and on all its citizens, for peace, harmony and prosperity, the Bank of Ceylon conducted its annual ceremony of strewing fresh sand which is known as “weli Athirime Pinkama” in “Uda Maluwa” recently.
The ceremony took place with the participation of the Bank’s General Manager K.E.D. Sumanasiri, DGM Corporate and Offshore Banking Priyal Silva, DGM Human Resource Dhamma Wijeyawardhene, DGM Branch operations and Development Banking Nilantha Meneripitiyage, AGM North Central Province Mahinda Bandara, AGM Marketing Aruna Hettiarachchi, AGM North Western Mrs.Ruchindra Perera and other staff members. The event was organized by the Bank’s Assistant General Manager North Central Province (NCP) G.K.G. Mahinda Bandara and staff members of the NCP province with the guidance of the Atamasthanadipathi of Anuradhapura, the Most Venerable Dr. Pallegama Siriniwasa Thero.
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