Dr. Harsha Cabral - Chairman	Shashi Kandambi -CEO

National Savings Bank has already surpassed the previous year’s profit after Tax (PAT) by the second quarter of this year. The bank registered a PBT of Rs. 15.0 billion for the six months period of year 2024 whereas the PAT for the year 2023 was Rs. 7.21 billion. 

Despite ongoing reductions in policy interest rates, the bank benefited from liabilities being repriced at a lower cost. Although interest income for the first six months declined by 7 percent to Rs. 103 billion, interest expenses also dropped by 29 percent to Rs. 71 billion. This positive effect led to a 170 percent increase in Net Interest Income compared to the same period last year, reaching Rs. 32.5 billion.

Fee and commission income rose by 55 percent, mainly due to increased fees and commissions from cards, mobile app transactions and internet banking transactions compared to same period last year. 

The net gain on derecognition from financial assets at fair value through other comprehensive income skyrocketed by 543 percent, fuelled by realised gains from treasury bonds and treasury bills amounting to Rs. 442 million. 
Operating expenses increased by 32 percent, mainly due to the increase in salary costs from the 2024-2026 collective agreement, while other expenses grew by 9 percent, mirroring global inflationary pressures.
The asset quality of the bank improved mainly due to positive effects of economic recovery and declining interest rates which have strengthened the financial position of borrowers previously impacted by repeated crises, allowing them to resume their loan repayments and stronger recovery actions taken by the bank. Accordingly, the bank reported an Impaired Loans (Stage 3) Ratio (net of Stage 3 impairment) and Impairment (Stage 3) to Stage 3 Loans Ratio of 2.50 percent and 53.54 percent respectively demonstrating the bank’s financial resilience and prudent management of credit risk. 

These strategic measures have contributed to an improved bottom line, underscoring the bank’s commitment to maintaining stability even in challenging economic conditions.

A drastic improvement was shown in operating profit before tax which was Rs. 20.11 billion in the reporting period whereas last year same period reported a Rs. 581 million. A 360-degree turnaround was materialised with positive market conditions and tremendous dedication and collaboration. The Bank paid Rs. 11.2 billion in taxes to the government during the first half of the year, including Value Added Tax (VAT) on financial services, Social Security Contribution Levy (SSCL) on financial services, and Income Tax. 

Profitability metrics significantly improved in the first half of the year compared to the end of 2023. Net Interest Margin (NIM) increased by 207 basis points to 3.86 percent, while Return on Assets (ROA) and Return on Equity (ROE) were 1.78 percent and 20.74 percent, respectively, reflecting rises of 152 basis points and 1,138 basis points. This substantial growth was achieved through strategic decisions made at the optimal times.

The Regulatory Liquidity Coverage Ratio (Rupee), Liquidity Coverage Ratio (All Currency), and Net Stable Funding Ratio were significantly above the regulatory minimum requirement of 100 percent, standing at 318.64 percent, 314.37 percent, and 184.18 percent, respectively. 

By the end of 2Q2024, the Tier I and Total Capital Adequacy Ratios were at 18.10 percent and 20.84 percent, both comfortably exceeding the regulatory minimum levels of 8.5 percent and 12.5 percent, respectively.