NSB to provide expertise for putting SOEs on track



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by Sanath Nanayakkare


The National Savings Bank (NSB) will assist the government in revamping State Owned Enterprises (SOEs) in case any of these entities requires the Bank's expertise in this regard, Kithsiri B. Wijeyaratne, DGM Finance and Planning, NSB, told The Island Financial Review yesterday.


"That is one of our key priorities for 2016. Our other priorities are; forging new business relationships for international remittances, growing fee-based banking services, enhancing corporate image through effective marketing communications, improving productivity, customer delivery capacity through enhanced and integrated infrastructure and skills development of our staff, he said.


Responding to a question on varying exchange rates, the deputy general manager said," We always give the customer the increased rate as and when it happens. However, it is seen that customers tend to convert their foreign currency into LKR when it brings them a higher rate, instead of maintaining their foreign currency deposits. In fact, the unrest in the Middle East, the lower oil prices in the global market etc. have an impact on our expatriates working overseas. This will have an impact on their earnings. When their remittances suffer declines, inward remittance market will be impacted, due to the reduction of their income.


"When it comes to foreign remittances, there are new initiatives to engage new markets, such as Korea, to establish relationships with them. This ongoing initiative will help us increase the Bank's inward remittances, he noted.


NSB reported a net profit of Rs. 3,095 million in 1Q 2016, up 3.87% year on year.


The Bank showed a competitive loan growth of 3.22% quarter ending, to reach to Rs. Rs. 280,489 million at the end of Q1 2016. As at December 2015, it was Rs. 271,751 million.


Commission and fee based income rose by 3.284% year-on-year to LKR 104 million in Q1 2016 (2015 Q1 was 78 million). This will tend to offset the declining net interest margins to 3.12% in 1Q 2016 from 3.32% recorded at the end of 2015 due to relatively high interest cost.


The cost to income ratio increased 43.06% in 1Q 2016 (4Q 2015:37.41%)


Return on average assets declined to 1.45% at Q1 2016 from 1.6 recorded as at 31/12/2015.


NSB posted a loan growth of 3.22% quarter expanding its loan book to Rs. 280,489 million in 1Q 2016 from Rs. 271,751 million as at end of 2015. NSB loan portfolio is primarily composed of personal loans and housing loans which account to 21.36% (2015: 21.53%) and 15.44% (2015: 13.06%) of total portfolio respectively, while pawning continued to decline further.


Total asset of the bank increased to Rs. 856,920 million at Q1 2016 compared to Rs. 848,079 at December 2015.


 
 
 
 
 
 
 
 
 
 
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