National Savings Bank grew its core banking income in the first six months of 2026 but reported lower profits than a year earlier, as higher staff costs and weaker market-related income offset the gains.
Profit before tax fell to Rs. 22.6 billion from Rs. 24.1 billion in the first half of 2025, a decline of about 6%. Profit after tax fell to Rs. 13.4 billion from Rs. 14.7 billion, down roughly 9%.
The bank attributed the moderation principally to higher operating costs and a lower contribution from trading and derecognition gains.
Core income improved
The operating lines moved the other way:
- Net interest income rose 5.5% to Rs. 44.2 billion from Rs. 41.9 billion, helped by a 4.7% fall in interest expenses to Rs. 54.5 billion even as interest income moderated slightly to Rs. 98.6 billion.
- Net fee and commission income jumped 37.0% to Rs. 1.40 billion from Rs. 1.02 billion.
- Total operating income rose 3.1% to Rs. 45.8 billion from Rs. 44.5 billion.
- Net operating income rose 2.3% to Rs. 49.1 billion from Rs. 48 billion.
Costs rose to match. Personnel expenses climbed to Rs. 13.8 billion from Rs. 11.5 billion — an increase of about Rs. 2.3 billion, which absorbs essentially the whole Rs. 2.3 billion gain in net interest income. Other operating expenses edged up to Rs. 4.3 billion from Rs. 4.1 billion.
Income tax for the period was Rs. 9.14 billion, and VAT and the Social Security Contribution Levy on financial services together exceeded Rs. 7.29 billion.
Balance sheet
Lending grew considerably faster than deposits. Loans and advances expanded 9.1% to Rs. 601.01 billion from Rs. 550.83 billion at the end of December 2025, while deposits rose 1.5% to Rs. 1.63 trillion from Rs. 1.61 trillion. Total assets rose 2.1% to Rs. 1.87 trillion.
Shareholders’ equity increased 4.1% to Rs. 123.91 billion, and retained earnings rose 12.4% to Rs. 52.34 billion.
Chairman Dr. Harsha Cabral PC said the results “reflect the resilience of NSB’s core business model and the enduring confidence placed in the Bank by generations of Sri Lankans,” adding that the priority remained “the prudent stewardship of public savings.”
Acting General Manager and CEO Rohana Bandara Weerakoon said the growth in lending, fee income and equity was encouraging and that the bank would continue to strengthen digital access, cost discipline and risk management.
A headline figure the results text does not carry
Both outlets headlined the release as an operating profit of Rs. 22.5 billion. Neither published a sentence in the body of the results stating that figure — the only profit measures given are profit before tax of Rs. 22.6 billion and profit after tax of Rs. 13.4 billion.
The Rs. 22.5 billion figure also sits awkwardly against the bank’s own first-quarter reporting. NSB’s Q1 release was headlined as a Rs. 15.5 billion operating profit against profit before tax of Rs. 11.8 billion — operating profit exceeding PBT, as the standard bank reporting format implies, because taxes on financial services are deducted between the two lines. A half-year operating profit consistent with that relationship would be well above Rs. 22.5 billion, not marginally below the half-year PBT of Rs. 22.6 billion.
The release also moves between “NSB Group” in the headline and “the Bank” throughout the body without stating which entity each figure covers. Readers should not difference the two profit measures.
Context
NSB is a state-owned savings bank whose mandate concentrates its funding in retail deposits, and its balance sheet is dominated by government securities rather than corporate lending — which is why the 9.1% growth in loans and advances is the more notable operating number.
The result follows a stronger 2025, when state banks posted record profits and NSB itself reported a record Rs. 59 billion.
What was not reported
Neither outlet gave the group’s capital adequacy ratios, non-performing loan ratio, impairment charge, or return on assets and equity. Neither explained the scale of the decline in trading and derecognition gains, nor accounted for the Rs. 2.3 billion rise in personnel expenses. Neither reconciled the headline operating-profit figure with the profit measures in the results text.