NSB posts highest-ever profits in 2025, delivering record financial performance driven by strong net interest income, disciplined cost management, and improved asset quality as Sri Lanka’s banking sector continues its recovery.
NSB posts highest-ever profits in 2025 with strong growth
NSB posts highest-ever profits in 2025, with the National Savings Bank reporting a sharp surge in earnings, underscoring its resilience and operational strength in a gradually stabilising economic environment.
The bank recorded an operating profit before tax of Rs. 59 billion, marking a 55% increase year-on-year, while profit after tax rose by 61% to Rs. 28.2 billion. On a standalone basis, the bank’s profit after tax grew even more strongly, increasing by 69%, reflecting sustained improvements in core banking performance and a significant reduction in impairment charges.
A key driver behind this growth was the expansion in net interest income, which rose by 17% to Rs. 84.8 billion. This was achieved despite a slight decline in interest income, as the bank effectively managed its funding costs. Interest expenses fell by 14%, supported by disciplined deposit repricing and proactive asset-liability management. As a result, the net interest margin improved to 4.74%, up from 4.22% in the previous year.
NSB posts highest-ever profits in 2025 at a time when Sri Lanka banking sector performance is showing signs of recovery, with financial institutions benefiting from stabilising macroeconomic conditions and improved borrower repayment capacity. The bank’s financial results reflect a combination of prudent strategy and favourable external developments.
Total assets of the bank grew by 4% to Rs. 1,831 billion by the end of 2025, driven by measured expansion in loans and advances as well as continued investment in government securities. Loans and advances increased by 3% to Rs. 550.8 billion, supported primarily by growth in retail lending and short-term financing instruments.
The bank’s deposit base, a critical pillar of its funding model, rose by 3% to Rs. 1,608 billion. This growth highlights sustained depositor confidence, reinforced by the institution’s explicit government guarantee and long-standing reputation as a secure savings institution.
Profitability metrics also strengthened significantly, with return on equity rising to 25.08% from 17.89%, while return on assets improved to 2.48% from 1.53%. These indicators point to enhanced efficiency in capital utilisation and asset deployment, reflecting the bank’s ability to generate higher returns for stakeholders.
Non-interest income also contributed to overall performance. Net fee and commission income grew by 46% to Rs. 2.56 billion, driven by increased loan disbursements, higher card usage, and growth in trade and remittance-related services. Additionally, other operating income rose by 72% to Rs. 786 million, supporting income diversification.
A notable highlight of the year was the sharp decline in impairment charges, which fell by 86% to Rs. 1.64 billion. This improvement reflects both macroeconomic stabilisation and the effectiveness of the bank’s credit risk management framework. The Stage 3 loans ratio improved significantly to 2.53% from 5.18% a year earlier, indicating better asset quality and reduced non-performing loans.
At the same time, the bank strengthened its provisioning coverage, with the Stage 3 provision coverage ratio increasing to 58.56%. This dual improvement—lower non-performing loans and higher coverage—demonstrates a balanced approach to risk management and financial stability.
Cost management remained disciplined, with operating expenses increasing only marginally to Rs. 30.4 billion. Personnel expenses declined slightly by 2% to Rs. 19.9 billion, reflecting careful cost control measures. As a result, the cost-to-income ratio improved to 34.30%, enhancing overall operational efficiency.
NSB posts highest-ever profits in 2025 while also making a significant contribution to government revenue. The bank paid Rs. 30.1 billion in taxes, including value-added tax on financial services, social security contribution levy, and income tax. In addition, dividend payments and other levies brought its total contribution to the government to Rs. 38 billion, representing a 77% increase from the previous year.
Capital adequacy remained well above regulatory requirements, with the Tier 1 capital ratio at 24.90% and the total capital adequacy ratio at 26.83%. These levels significantly exceed minimum thresholds, reinforcing the bank’s strong capital position.
Liquidity indicators also remained robust. The liquidity coverage ratio stood at 349.2% for all currencies, while the net stable funding ratio reached 206.4%, both well above regulatory minimums. These metrics highlight the bank’s ability to meet its obligations even under stressed conditions.
Harsha Cabral, Chairman of NSB, noted that the strong profit growth reflects the resilience of the bank’s core operations and the effectiveness of its risk management framework. He emphasised the importance of maintaining strong capital buffers to support depositor confidence and facilitate responsible lending.
Acting General Manager and CEO Rohana Bandara Weerakoon highlighted that improvements in net interest income, fee-based income, and asset quality demonstrate disciplined execution. He also pointed to ongoing digital transformation initiatives aimed at enhancing customer experience and expanding service reach.
The bank’s performance also aligns with broader trends in Sri Lanka financial sector growth, where institutions are focusing on strengthening balance sheets, improving asset quality, and leveraging digital innovation to meet evolving customer needs.
Looking ahead, NSB is expected to continue supporting economic recovery through targeted lending, particularly in sectors such as housing and green financing. Its strong capital base and liquidity position provide a solid foundation for sustainable growth, even amid external uncertainties.
NSB posts highest-ever profits in 2025, reflecting not only a year of exceptional financial performance but also the institution’s role as a cornerstone of stability within Sri Lanka’s banking system.