NSB sees 1Q PBT expand 192.4%

National Savings Bank (NSB) began 2024 with a growth momentum, achieving Rs. 3.4 billion Profit After Tax (PAT) for the first quarter with an increase of 221.8 percent over the same period last year. 

Followed by two years of financial hardships, the bank has reverted its regular financial performance showing the balance sheet strength backed by 100 percent government guarantee. In a commentary on the financial performance, NSB noted the downward trajectory in the market interest rates made a positive impact on its profit and loss statement by lowering cost of funds. 

The bank reported a Net Interest Income of Rs. 14 billion for the first three months of the year, an upswing of 79 percent compared to the same period in 2023. 

Prevalent low interest rates in the financial market abridged the bank’s Interest Expense by 18 percent to Rs. 39 billion compared to reduction of Interest Income by 4.3 percent to Rs. 53 billion which became the major contributor to increase in the Net Interest Income.

Fee and Commission Income increased by 35 percent which was mainly contributed by Fee and Commission by Cards and Service charges. Commission Income from Trade and Remittance also increased by 17 percent demonstrating the expansion of Remittance business during the period.

Net Gain from Trading and Net gains/(losses) on derecognition of financial assets through OCI also increased by 85 percent and 416 percent respectively mainly due to Trading income from Fixed Income Securities and Realised Gain from Treasury Bills and Treasury Bonds. 

The bank made an impairment charge of Rs. 270 million for the period concerned which is a reduction of 11.2 percent compared to the first quarter of 2023. The Impaired Loan (stage 3) Ratio and Impairment (stage 3) to Stage 3 loans stood at 2.42 percent and 52.93 percent respectively indicating the financial resilience and robust controlling mechanisms followed by the bank. 

These strategic actions had paved the path to increase the bottom line and highlighted the bank’s dedication to maintaining stability in challenging economic environments.

Accordingly, the bank reported an operating profit before taxes of Rs. 8.1 billion with a notable increase of 158.4 percent despite the increase in operating expenses by 33.2 percent to Rs. 7.3 billion.    Taxes on financial services increased by 98 percent to Rs. 2.2 billion which led to a Profit Before Tax of Rs. 5.8 billion which is a significant 192.4 percent YoY growth. 

Income Tax expense increased by 160 percent up to Rs. 2.5 billion for the three months period of the financial year 2024 resulting in a Profit after Tax of Rs. 3.4 billion with a 221.8 percent noteworthy growth. 

Total Assets of the bank reported Rs. 1.68 trillion at the end of first quarter of 2024 with a marginal decrease of 0.3 percent on account of reduction in the Loans and Advances portfolio. Total Deposits amounted to Rs. 1.5 trillion with a marginal increase of 0.9 percent. Further, the bank reported a Net Interest Margin of 3.34 percent at the end of first three months of 2024.   Return on Assets (ROA) and Return on Equity (ROE) stood at 1.39 percent and 16.31 percent respectively showcasing resilient performance. 

Regulatory Liquidity Coverage Ratio (Rupee), Liquidity Coverage Ratio (All Currency) and Net stable Funding Ratio stood well above the regulatory minimum requirement of 100 percent at 308.33 percent, 304.7 percent and 183.12 percent respectively. Tier I and Total Capital Adequacy ratios by the end of Q1 2024 stood at 21.074 percent and 23.372 percent far above the regulatory minimum levels of 8.5 percent and 12.5 percent respectively.