LBO Home IndoChina | About Us | To Advertise | Contact Us rss LBO Mobil
Thu, 24 April 2014 18:50:31
Sri Lanka state savings bank exceeds deposit target
08 Oct, 2009 14:03:49
Oct 08, 2009 (LBO) – Sri Lanka's state-owned National Savings Bank (NSB) had exceeded its 2009 deposit mobilization target of 30 billion rupees by the end of the third quarter, a senior official said.

"So far we have achieved 38 billion rupees and we expect it will exceed 40 billion rupees at year's end," H M Hennayake Bandara, NSB's additional general manager, finance told reporters at a media conference.

"Total deposits held by the bank have gone up to 295 billion rupees."

NSB is Sri Lanka's largest savings bank. Its only competitor is state-owned Merchant Bank of Sri Lanka (MBSL) Savings Bank, formerly Ceylinco Savings Bank (CSB).

"This year in terms of savings has been a very good year. Obviously what happened at Ceylinco Group in the past few months also worked in our favor," Bandara said.

CSB, formerly part of the Ceylinco Group, had a run on deposits after the collapse of Ceylinco group subsidiary, Golden Key Credit Card Company, an unregulated finance company.

Golden Key depositors are trying to recover an estimated 26 billion rupees in deposits cash.

Other Ceylinco Group companies also suffered a run on deposits and were rescued by the Central Bank, and state-owned banks such as MBSL and its parent Bank of Ceylon.

"NSB's financial performance for 2009 will be exceptionally good," Bandara said.

The bank, with a huge deposit base, has most of its investments in government securities.

Bandara said that by law NSB is only allowed to invest 40 percent of its funds in investments such as corporate debt, debentures and the stock market.

NSB only has 2.5 billion rupees invested in the stock market, Bandara said.

The Colombo Stock Exchange has appreciated over 100 percent so far this year, on euphoria generated by the end of the island's 30-year ethnic war, making it the world's second best performing market. Only Peruvian stock exchange has performed better.

Investment in government debt is risk free, but till recently gave negative returns to depositors owing to high inflation arising from ballooning budget deficits stemming from profligate government spending.

Bandara said the current economic conditions had also helped to push deposit mobilization up.

"Credit is not moving and almost all banks have excess liquidity," Bandara said.

During a recession banks tend to hold back lending, while the public save more for contingence purposes as credit is hard to come by.

The US economy is also experiencing similar symptoms as during the Federal Reserve chair man Ben Bernanke's money printing years, which ended with the commodity and asset price bubble bursting last year, savings were negative.

However, after the US officially entered recession, savings went positive.

Bookmark and Share
Your Comment
Your Name/Handle
Your Email (Your email will not be dispalyed)
Location
Country
Your Email
Receivers Email
Your Comment