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State-owned Bank of Ceylon yesterday revealed that its assets had crossed the Rs. 3 trillion milestone in the first quarter, whilst loans and deposits by end 2020 had surpassed Rs. 2 trillion.
As at 31 December 2020, BOC’s assets base grew by 24% to Rs. 2.9 trillion, primarily backed by an increase of 28% in the loan book. Yesterday BOC Chairman Kanchana Ratwatte disclosed that during the just ended first quarter, the asset base crossed the Rs. 3 trillion mark, creating banking history.
BOC said as per audited accounts for 2020, its loan book crossed the Rs. 2 trillion mark and closed 2020 at Rs. 2.1 trillion. Both Government and private sector lending contributed to growth during the year, while working capital and personal lending showed a boost in all segments, including retail and corporate financing.
The bank’s deposit base (more than 23% of the industry) increased by 23.4% to Rs. 2.47 trillion in 2020 despite low interest rates. Of the deposit base, 35% was the current and savings deposit (CASA) base offering the bank funds at low cost.
“Year 2020 was a year of many unforeseen challenges, resulting in economies around the world contracting due to persistent lockdowns following the COVID-19 outbreak. However Bank of Ceylon yet again stamped its resilient leadership position by navigating an exhausting year carefully, but with great strength, continuously powering the wheels of the Sri Lankan economy,” Chairman Ratwatte told the media yesterday.
He said local policymakers implemented promising measures to provide a much-needed push to the economy by way of an accommodative monetary policy stand, specifically by pulling down interest rates to single digits, among other extraordinary measures announced by the Central Bank, through moratoriums and concessionary loan schemes.
“The role of BOC during 2020 in delivering on the benefits of these measures is unmatched and commendable,” Ratwatte emphasised.
While the bank recorded the highest industry profit in 2020 of Rs. 23.6 billion at pre-tax and Rs. 17.7 billion after tax, its continued focus during the year was to ensure the integrity of the country’s banking sector – including payments and settlements – continued without interruption, while aiding the country in its economic revival, through SME and local entrepreneurship development.
BOC extended support by implementing the CBSL-announced moratorium to over 258,000 customers in facilities worth Rs. 589.4 billion. These moratoria were offered under five schemes: moratorium tourism sector, moratorium COVID-19 first wave, moratorium COVID-19 second wave, moratorium credit support to the SME sector, and the extension granted for the moratorium on the Easter Sunday attacks.
Separately the bank also granted moratoria to customers who were not covered under the CBSL-introduced moratorium by way of the bank’s own moratorium.
BOC topped the industry in granting loans under the ‘Saubhagya’ Working Capital Loan scheme, disbursing Rs. 39.1 billion to over 18,000 borrowers. Stretching its hands out to needy customers further, the BOC introduced a special loan scheme for businesses affected by the COVID-19 pandemic, with facilities worth Rs. 20.5 billion granted.
While focusing on economic revival, BOC said it delivered on its duty in developing a strong national economy by boosting the SME and microfinance sector with disbursement of Rs. 128.9 billion to the sector in 2020. The senior management of the bank engaged with entrepreneurs and SMEs to provide support on critical business issues covering all provinces of the country.
The ‘Mithuru’ microfinance program of the BOC also served over 1,000 small groups, with prominence given to the Eastern, North Central and Central provinces. Total disbursements in the year amounted to Rs. 9.3 billion.
It also introduced the BOC ‘Divi Udana’ loan scheme during the year to revitalise the ailing economy, by way of kick starting SMEs and ensuring their funding needs were met.
BOC said it took immediate steps in revising market interest rates to match policy rate reductions and interest rates caps announced by the CBSL, by revising the interest rates down of its loan portfolio. BOC’s prompt action to revise the pricing of its loan book allowed market rates to ease following the CBSL rate cuts. Given its market share, BOC’s quick response in this regard has been vital in stabilising the market, the management said yesterday.
The bank also played an indispensable role in supporting CSBL’s efforts to stabilise the Sri Lankan Rupee and strengthen its external position under difficult economic conditions, by way of active participation in the exchange market, facilitating around $ 2.8 billion inward remittances to the country.
During 2020 the bank successfully executed issuance of its first Additional Tier 1 (AT1) bond, generating Rs. 15 billion ATI capital. The bank’s Tier I Capital and Total Capital ratio stood at 11.2% and 14.9% respectively by end 2020, which were above regulatory norms. Despite cash flow deferments on loan instalments, the bank was able to maintain better trade-off between liquid assets and liabilities. All liquid level monitoring ratios were maintained positively.
