NSB was established, regulated, and operated under the National Savings Bank Act, No. 30 of 1971. The Act mandates the Bank to invest, at minimum, 60% of its deposits in Government Securities, which lowers its credit risk and strengthens the liquidity profile. On the other side, the Bank's loans and advances expand moderately, due to the inherent restrictive nature of the Bank's business model. Nonetheless, NSB relishes a strong and fortified presence in the Sri Lankan household. NSB continues to dominate as the largest Licensed Specialized Bank (LSB) in the country, with a strong asset base of LKR~1.8tn and a deposit base of LKR~1.6tn, respectively, as of End-Sep'25. The Bank also holds a significant position in the overall banking industry, accounting for ~8.1% of the banking industry's total deposits as of End-Sep'25.
NSB enjoys a very strong financial risk profile underpinned by strong credit quality, with the Stage-3 loans (Net) to Gross loans ratio standing at ~2.63% (End-Sep'25), well below the banking industry average. Meanwhile, the Bank remains exposed to market risk due to its high share of investment in government securities. However, this risk is mitigated amidst stable interest rate environment and manageable duration of Government securities. During 9MCY25, NSB's liquidity position improved further, with its Liquidity Coverage Ratio (LCR) increasing to ~349.52% as at End-Sep'25 (CY24: ~344.55%; CY23: ~293.71%). Backed by reduced cost of funds, the Bank's Net Interest Income (NII) increased to LKR~63.2bn during 9MCY25 (9MCY24: LKR~53.2bn), a growth of ~18.7% year-on-year. Resultantly, the Bank posted Profit Before Tax (PBT) of LKR~33.3bn during 9MCY25 (LKR~26.4bn in CY24) and a Profit After Tax (PAT) of LKR~20.1bn (LKR~16.3bn in CY24). NSB's capital position remains strong, with its Capital Adequacy Ratio (CAR) clocking in at ~21.2% as at End-Sep'25, comfortably above the minimum regulatory requirement of 12.5%. Going forward, the Bank's financial discipline is expected to demonstrate sustained strength, characterized by its strong asset quality, robust capital position, and excess liquidity. Meanwhile, the Bank's growth momentum is expected to remain aligned with its business model and performance benchmarks.
The Bank has undertaken several digital transformation initiatives, including core banking software, to improve its efficiency and control environment. NSB plans to invest further in technology, going forward.
The rating is dependent upon the continued provision of the Government of Sri Lanka’s guarantee on the Bank’s deposits, as stipulated under the National Savings Bank Act, No. 30 of 1971. Any material amendments to the Act, or a significant deterioration in the Bank’s liquidity position in the absence of adequate government support, could exert negative pressure on the ratings. Furthermore, the Bank’s ongoing ability to comply with regulatory requirements, while sustaining profitability and key financial performance indicators, will remain critical for the rating.