NSB 1H profit jumps 65% on higher interest income

State-owned National Savings Bank (NSB) said yesterday its profit after tax for the first half of 2025 surged 65 percent year-on-year to Rs. 15.7 billion, lifted by higher interest income and improved cost controls.

Profit before tax rose to Rs. 25.5 billion in the six months to June 30, compared with Rs. 15.4 billion a year earlier, the bank said in a statement.

Net interest income climbed 27 percent to Rs. 42.7 billion, driven by tighter asset-liability management and pricing strategies, while operating income grew to Rs. 46.2 billion on stronger fee-based and trading activities.

NSB said the performance reflected “operational resilience and bottom-line efficiency” despite a challenging economic environment.

Commenting on the performance, NSB Chairman Dr. Harsha Cabral PC stated, “The first half of 2025 reflects the strength of our strategic foundation, governance frameworks, and execution capability. Amidst economic shifts, NSB has continued to deliver value, strengthen its fundamentals, and strengthen its national mandate.” Surpassing a PBT of Rs. 25.5 billion within just six months with strict discipline on all aspects stands as a defining milestone in the bank’s journey”, said Shashi Kandambi, General Manager/CEO. 

“This achievement underscores the effectiveness of our strategic focus on balance sheet optimisation, disciplined cost management, and sustainable growth. Notably, our elevation to the position of the 5th most valuable brand in Sri Lanka by Brand Finance up from 7th place last year reflects the growing strength of our brand loyalty and stakeholder trust. We remain steadfast in our commitment to maintaining this performance trajectory, while consistently creating long-term value for all stakeholders”.

The net interest margin (NIM) improved to 4.74 percent, compared to 4.31 percent reported at the end of December 2024, driven by better yields on assets and a reduction in cost of funds. This performance was complemented by continued improvement in cost-to-income ratio, which stood at 36.8 percent, down from 38 percent, signifying better cost control across the organisation.

The bank delivered an outstanding improvement in profitability, with Return on Assets (ROA) rising to 2.8 percent and Return on Equity (ROE) climbing sharply to 27.6 percent, up from 1.6 percent and 18.1 percent respectively as at the end of the 2024 financial year, reaffirming NSB’s strategic emphasis on sustainable value creation.

NSB’s total asset base expanded to Rs. 1.85 trillion as of 30th June 2025, compared to Rs. 1.78 trillion at the end of December 2024, reflecting continued balance sheet growth and financial strength. The bank’s investment portfolio comprising of government securities, equity investments, and debt instruments registered a 9.3 percent increase over the six-month period, reaching Rs. 1.14 trillion, up from Rs. 1.05 trillion at year-end 2024. Concurrently, total deposits rose to Rs. 1.58 trillion during the first half of 2025, underscoring sustained depositor confidence.

The Bank also made commendable progress in enhancing its asset quality indicators. As of 30th June 2025, the Stage 3 loans to total loans ratio declined to 2.83 percent, a sharp improvement from 5.18 percent recorded at the end of 2024. 

Moreover, the Stage 3 impairment coverage ratio improved to 56.9 percent, up from 44.50 percent. This significant improvement demonstrates the bank’s tightened credit risk assessment, timely resolution of non-performing exposures, and increased focus on recoveries. NSB continues to demonstrate strong capital adequacy, comfortably exceeding all statutory thresholds mandated by the Central Bank of Sri Lanka. As of 30th June 2025, the capital ratios remained robust, with Tier 1 capital at 25 percent, and the Total Capital Ratio at 27 percent well above the regulatory minimums of 8.5 percent and 12.5 percent, respectively. 

The bank’s liquidity position remains among the strongest in the industry, attesting to its business model and robust funding model. As of 30th June 2025, the Liquidity Coverage Ratio (LCR) stood at 362 percent in rupee terms and 356 percent for all currencies, substantially surpassing the regulatory requirement of 100 percent. 

Also, the Net Stable Funding Ratio (NSFR) reached 197 percent, affirming the bank’s sound long-term funding capability and structural stability. 

The Board of Directors of NSB is composed of five members, led by Chairman Dr. Harsha Cabral, PC. The Board also includes Jude Nilukshan, S. R. W. M. Ruwan Palitha Sathkumara, Dushyanta Basnayake, and Ashane Jayasekara.