ABOUT YOU - NATIONAL SAVINGS BANK ANNUAL REPORT 2010 pptx

I n t h i s r e p o r t , w e h o l d u p a m i r r o r t o o u r b a n k . I n t h e m i r r o r , w e s e e o u r s e l v e s
N A T I O N A L S A V I N G S B A N K
A n n u a l R e p o r t 2 0 1 0
a b o u t y o u
About You
National Savings Bank
Annual Report 2010
© 2010 National Savings Bank
Produced by: Smart Media - The Annual Report Company
ISBN 978-955-0540- 01-3
This Annual Report is Carbon Neutral
This National Savings Bank Annual Report has been produced by
Smart Media - The Annual Report Company whose greenhouse
gas emissions resulting from the writing, designing, photography,
production, project management, usage of paper and printing are
offset using verified carbon offsets.
The paper used in this report is certified under the
Forestry Stewardship Council guidelines.
a b o u t y o u
A n n u a l R e p o r t 2 0 1 0
First Sri Lankan Bank to be r at ed AAA.
Reaffirmed by Fitch Ratings Lanka Ltd. fo r th e 8t h co ns ec ut iv e ye ar
C O N T E N T S
Vision, Mission & Values 05
STRATEGY, RESULTS AND PROSPECTS
This Report is About You 08
From the Chairman 13

A Conversation with the General Manager/CEO 21
A look at Our Financial Achievements 30
The Economic Conditions Around Us 45
People Serving People 54
Setting Our Objectives for 2012 65
Proposed Actions for 2011 and 2012 71
Economic Assumptions and Possible Outcomes 78
STEWARDSHIP
Corporate Governance 84
Board Committee Reports 132
Board of Directors 142
General Manager/CEO and Management Team 145
Senior Managers 150
Risk Management 152
Sustainability Supplement 194
FINANCIAL REPORTS
Annual Report of the Board of Directors 247
Directors’ Responsibility for Financial Reporting 257
Directors’ Statement on Internal Control 259
Independent Assurance Report 262
General Manager/CEO’s and Deputy General Manager’s (Finance & Planning) Statement of Responsibility 264
Report of the Auditor General 266
Income Statement 268
Balance Sheet 269
Statement of Changes in Equity 271
Cash Flow Statement 273
Significant Accounting Policies 275
Notes to the Financial Statements 292
ANNEXURES
Income Statement in US Dollars 324

Balance Sheet in US Dollars 325
Decade at a Glance 327
Analysis of Deposits 329
Our Products and Services 331
Branch Network 336
Correspondent Banks 338
Exchange Companies 339
Business Segment Information 342
Glossary 344
Corporate Information 347
V I S I O N
The most reliable and sought-after choice for savings and investments solutions.
M I S S I O N
Providing our customers with total financial solutions to optimise their savings
and investment needs, whilst meeting the expectations of all our Stakeholders.
V A L U E S
In conducting our day-to-day business we will respond promptly and act
creatively with trust, mutual respect and integrity.
S T R AT E G Y,
R E S U LT S
A N D
P R O S P E C T S
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T h i S
R E P O R T i S
A b O U T
YO U
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It’s about you as a customer, you as a business partner,

you as a member of the NSB team.
Together we’re creating a visionary national bank, one with a leading role in
transforming our country into the Miracle of Asia.
By focusing on you as a customer or partner, by guiding you as a team member,
we’re building increasing value for the whole of Sri Lanka.
We thank each of you for your commitment to,
and participation in, our mission.
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National Savings Bank is wholly owned by the Government of Sri Lanka, and we are
the only Sri Lankan bank whose deposits are fully guaranteed by the Government.
It is a privileged position and we employ our status for the measurable benefit of our
country. A specialist savings bank, we take pride in our AAA credit rating, reaffirmed
for the eighth consecutive year. We are the first local bank with this rating record.
With assets standing at Rs. 404 Billion, we are the third largest bank in Sri Lanka.
Majority of Sri Lankans choose to bank with us and enjoy access to products and
services designed to meet comprehensive and diverse requirements. With 3,050 staff,
we operate through a network of 186 branches and 4,053 post offices and
sub-post offices. We are one of the leaders in rupee savings market with a
market share of 20.3%.
National Savings Bank is the proud inheritor of a rich tradition of savings banking.
Formed by statute in 1971, we trace our origins back to 1832. Our inception followed
just two decades after the world’s first savings movement in 1810.
We have been visionary since our beginnings. We remain so. We are focused, energetic
and innovative in building our nation’s savings habits and financial capability.
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F R O M T H E C H A I R M A N
You may be a customer. You may be one of our business partners, in the banking
sector or in another related role. You may be a member of the NSB team.

You’re part of our world. Welcome.
You’re important to us. Great organisations are built by people. The people that
work in the organisation. Others they work with. And the people they serve.
If you’re Sri Lankan, in effect you own this Bank. This is your report. Together
we’re forging a formidable organisation, one of unique standing and importance
in our country. Together we’re building savings and financial services for the
benefit of individuals, families and communities. We’re strengthening the entire
capability and development of our nation.
The fact is, we’re on a great journey together. All of us.
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The central theme of this Report is plain and simple. It’s one I’m glad to introduce.
It will be developed by the CEO later, and reinforced in a central feature. It’s the theme that runs
through our every activity. It’s what we are. We’re ‘People Serving People’.
It has been an extraordinary year in every measure of achievement. There is much to report,
financially, strategically, operationally. Our results speak for themselves. But 2010 is a year within a
larger voyage. As well as reporting some of the major things we’ve achieved, we want to share some
of the important things we’re doing right now. As a customer, you’ll want to know how we aim to
improve your banking experience. If you’re a team member, you’ll want to know where we’re heading
too. Whatever your role, wherever you are, we’d like to involve you in the big picture.
As you’ll see emphasised, we’re investing significantly in our customer-facing activities.
We’re expanding our customer reach, improving our customer service capabilities, and refining
our operational structures and systems to ensure radically improved overall customer and business
support. We’ll look at all these initiatives, and more, in detail later.
But, first, let’s step back a moment. Let’s look at the larger national effort and
achievement we’re involved in together. At NSB we take a view that encompasses our nation as a
whole, the place of the Bank within our society, and the financial and development policies of our
owners, the Government of Sri Lanka. It’s a view that gives us a unique character,
and it gives us unique energy and commitment.
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F L A V O U R !
O u r p r o fi t s a r e me r e l y t h e b ri g h t s u rf a ce. Ou r fu l l c h arac t er l ie s be n e at h t h e s k i n.
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Y O U R A N D O U R C O N T R I B U T I O N S T O N A T I O N A L D E V E L O P M E N T
The fact is, you and we as Sri Lankans are building a bank of immense national influence and
importance. As a state-owned, state-guaranteed institution, we have, and willingly accept,
national strategic responsibilities. Take our domestic savings rate. It’s presently 18% of GDP.
It should be around 25% or above.
Is it realisable? Certainly. Total savings mobilised by NSB by the end of 2010 amounted to
Rs. 42.3 Billion, up 13.5% from 2009. We know we can grow domestic savings much, much more.
All being well, Sri Lanka could reach the target savings ratio of 25% of GDP by 2015. And what
would that mean? It will increase our per capita income to US$ 4,000 (Rs. 444,000/-).
May be you know someone sending money back from work overseas. Central Bank figures show
inward remittances in 2010 totalled US$ 4.1 Billion, up 24% from 2009. Well, we’re bringing
determined focus and capability to this area too, working to support our
nationals wherever they’re at work.
The value of these initiatives adds up - for NSB, the Government and our nation. Our business growth
provides increased funding for Government programmes. It means extended and accelerated national
development, the projects you see daily.
The figures are substantial. At the year-end, NSB had Rs. 282,096 Million of Government Securities,
of which Rs. 262,947 Million was invested in Government Treasury Bills and Treasury Bonds.
Moreover, the Bank contributed Rs. 10.1 Billion in taxes and levies to the Government in 2010.
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We’re keen to help you, and those you know, bank more easily. Our reach is unparalleled in
Sri Lanka. But the more we involve our nation in saving and other financial activity,

the more benefit we deliver to the country as a whole. It’s why we’re adding to our network.
Twenty-nine new branches during the year bring our total to 186.
Housing loans are an obvious social benefit. Through these, we deliver immeasurable benefits to
increasing numbers of families nationwide. Once again, we’re growing our approvals exponentially.
We invest in other ways too. We’re respected participants in the capital markets, investing in diverse
sectors of the economy, seeking genuine worth and measuring results with a long-term view.
They’re just some of the things we’re doing together. You, together with us.
Y O U ’ R E C R E A T I N G A F R E S H S T A R T F O R O U R N A T I O N
With the end of the 30-year civil war, and renewed Presidential and Government leadership,
Sri Lanka stands at a historical turning point. We have an almost unprecedented opportunity to
establish our nation on a secure, peaceful and increasingly prosperous footing.
One of the major goals of our country as a whole is to rebuild the North and the East. We are
determined to play our full part. We’re active in extensive educational and promotional campaigns,
and we’re opening new branches for local population.
There is much to do. Much, in terms of result, that we will not see for many years.
But National Savings Bank is there for the long haul.
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We start from a strong position. We’re determined to strengthen our resources and
capability still more.
Plainly, increased savings rates and accelerated Sri Lankan development go hand in hand.
As we at NSB continue to grow our position as the nation’s only mandated savings bank, so we’re able
to provide increased funds for national development and capital funding for housing and business.
As the nation enters a new period of peace and security, we intend to lead our banking sector in
laying and reinforcing the foundations of dramatically enhanced prosperity. As a Government-owned
Bank, we have an unmatched reputation for savings security. We aim to add an equal reputation for
creativity, responsiveness and reliability in financial services.
We have an outstanding position as the bank of choice for savings mobilisation. We will win an equal

position in new and extended activities, particularly in housing loans. We have the vision, the energy
and the financial muscle to enter new relationships with the business community.
You’ll see us providing strong and creative funding for business expansion and new business entry
both among SME’s and more substantial corporate entities.
We have identified the opportunities. We intend to seize them for the benefit of
all those we work with and for.
Y O U ’ R E P A R T O F A C O M M I T T E D N A T I O N A L T E A M
At NSB, we’re team players. We form an essential, valued and respected pillar of our nation.
We’ve earned that position over many decades. Year by year, we’re building on that foundation.
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On behalf of the Board, I offer our profound thanks to His Excellency the President/
the Minister of Finance & Planning, Deputy Minister of Finance & Planning,
the Secretary to the Treasury, the Governor of the Central Bank, the Auditor General,
the Attorney-General, and other regulatory bodies for their generous leadership and support.
Our deepest appreciation also goes to the Postmaster-General, the officials of the Postal Department,
the postmasters and the sub-postmasters and other officials for their willing and continuing
engagement in building our mutual business value.
Together with my fellow Directors, I am proud to have a custodial role for National Savings Bank now
and into the future year.
Once again, I offer my gratitude to you personally - whether a team member,
a customer or a partner - for your immense contribution to a remarkably fruitful year.
Our report is about you.
Pradeep Kariyawasam
Chairman
Colombo
6th April 2011
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A C O N V E R S A T I O N W I T H
T H E G E N E R A L M A N A G E R / C E O
We have history behind us. We have a future ahead of us. We are placed in a moment
of time that will determine the scale and success of your Bank for years to come.
That’s where strategy comes in. It’s about the quality of our vision and the
quality of our execution.
We can see what we’ve achieved already, and 2010 is a year of notable financial and
operational advance. But it’s just as important that we, together, understand and
live the future we’re creating.
We want to make NSB the first choice in banking, the best place to work.
We’ll achieve these goals by turning your Bank into the most competent,
most professional, most efficient bank possible.
They’re testing goals. They need to be. Our future success depends on them.