Annual Report 2012 - National Savings Bank

43HOW WE PERFORMED IN 2012OPERATIONAL REVIEWMaking our migrants ‘overseas’readyNSB has also continued to nurture therelationship with the Sri Lanka Bureauof Foreign Employment (SLBFE) giventhe large number of migrant workerswho are our customers. Over and abovethis reason, we also believe that ourmigrant workers must be made awareand be equipped with the necessaryskills and knowledge to be a success inthe countries they work in. We thereforepartner the SLBFE in its awareness,orientation and training programmes,which are compulsory for thoseseeking employment overseas. Theseprogrammes are conducted islandwide,with the Bank also educating themigrant workers on the importanceof money management, investmentavenues and nancial discipline.Treasury ManagementNSB primarily invests in GovernmentSecurities, Equity Market Investments,Alternative Investments andInvestments in Loans and Advances.Given that our overarching ethosremains rmly in partnering the nationin its development activities, we drawstrength from our roots to keep to thestatute that mandates the Bank to investa minimum of 60% of its deposits ingovernment securities.The Government Securities Portfoliorecorded a marginal growth during theperiod of 2012. However, due to theupward policy rates adjustment by theCentral Bank and low liquidity levels inthe market, interest rates increased inthe rst nine months of 2012. The policyrate reduction halted the issue of newTreasury Bonds and this low volumehas created high demand pressure onGovernment Securities. Accordingly,interest rates began declining duringthe latter of 2012.However it is pertinent to note, thatNSB’s total income generated throughour Treasury Bill and Treasury Bondportfolio increased signicantly in 2012compared to 2011. The maturity proleof the Government Security portfolioshows that 57% of total maturities havea maturity period of one year or moreat the year end 2012.In Equity Investments, the marketshowed a positive movement duringthe third quarter of 2012. Theperformance during the period wasnot ourished. The stagnancy thatprevailed otherwise was echoed in theBank’s equity portfolio as well. TheBank’s primary investments are in thesectors of Bank, Finance & Insurance(BFI) for 39% and Diversied holdings(DIV) for 18%, which account for57% of the total portfolio. Given thesesectors’ sensitivity to the macro socioeconomicenvironment, performanceis exceptional during favourableconditions, although, the generallacklustre milieu was quite pervasivethis year, when the Power & Energy,Manufacturing and Banking, Finance& Insurance sectors were not doing toowell during the year.Alternative Investments represented bydebentures, loans to nancial institutionsand investment in securitised papers,the Bank’s Alternative InvestmentPortfolio focuses on investing in highcredit quality nancial institutionsand grant funds to corporates to earnNATIONAL SAVINGS BANK . ANNUAL REPORT 2012