ComBank focused on retail lending and deposits

Deputy General Manager – Retail Banking and Marketing Hasrath Munasinghe 

Sri Lanka’s largest private sector bank, the Commercial Bank of Ceylon is actively focusing on accelerating its deposit mobilization and lending activities says the Bank’s Deputy General Manager – Retail Banking and Marketing Mr Hasrath Munasinghe in this interview. Excerpts:  

Q: Both lending and saving are in the news these days. How is Commercial Bank planning to proceed in these two areas?

 The growth of lending and saving are both linked with economic conditions in any market, and the rates of interest that apply are also linked. Commercial Bank has always had a keen focus on growing deposits and maintaining a healthy growth in the loan book, creating a sustainable balance in our activities and inflows and outflows of funds. 

Q: How has Bank’s lending activities fared so far?

 We have been strategic in our lending activities whilst maintaining a mix of products and services that cover all significant segments in the market. Retail lending is a very important and growing portion in our loan book. Our focus was not only to introduce new products but also to review and revamp the existing loan products to suit the changing market conditions and customer requirements. Few examples are the introduction of special loan to value (LTVs) for special categories of pawning, having considered the special requirements of the particular segments and numerous improvements done to foreign currency loans and education loans portfolios. 

Q:  Is the Bank planning to offer any new loan products for new segments?

In keeping with our sustainability focus the Bank recently launched green home loans.  The first home loan product of its kind in the market, Commercial Bank Green Home Loans carry a special concessionary interest rate that is 1% lower than the published ‘Platinum’ rate, and customers only pay 50% of the documentation charges applicable. The Bank has also already secured discounts of up to 10% from five leading solar power system providers in Sri Lanka for customers who obtain Green Home Loans. Green Home Loans of up to Rs 50 million are now available for the purchase of homes that have been granted Green Building Certificates by the Green Building Council of Sri Lanka, or for the construction of houses that will be so certified. Higher values can be considered on a case by case for apartments having green building certificates. Loans up to Rs 5 million are available for the purchase of solar power systems, solar net metering systems or for any other green initiative such as waste or rain water management or composting that leads to Green certification. The loans are repayable in up to 15 years and can also be topped up periodically for maintenance or upgrades that improve eco-friendliness.

As Sri Lanka’s first carbon neutral bank, Commercial Bank is committed to leading the way in promoting planet-friendly consumption, and we understand that one of the best ways to do that is by incentivizing investments in going Green through our lending. We launched Green Personal Loans and Green Leases five years ago and have been working with institutions like the IFC to develop Green Financing products. The Green Home Loans scheme with the Green Building Council supplements these efforts.

Q: How is the leasing sector faring in this scenario?

 The leasing market was also negatively affected during the past few years with restrictions on imports, fluctuating vehicle prices and consumer behavior during the period of hyperinflation. The leasing business however, is not only about vehicles. There is a substantial market for machinery leasing, predominantly for agriculture and production activities. Both sectors are seeing a positive upward movement at present. The Bank has also started a Leasing Fiesta under which our customers will receive very attractive rentals during the promotion period. There is a similar upward trend in home loans sector too, due to the prevailing downward trend in interest rates.

Q: Meanwhile, how is Commercial Bank’s savings mobilization doing?

 Commercial Bank is a trusted and financially stable bank and continues to maintain steady deposit inflows. Focused deposit products are being promoted periodically. We have a wide range of deposit products that cater to a very diverse cross section of the population. The Commercial Bank of Ceylon Group’s deposit base surpassed Rs 2 trillion, a milestone it achieved in the first quarter of 2023 despite the continuing impacts of fluctuating exchange rates and market interest rates, and the effects of the recent economic issues experienced. 

Q: What is the Bank telling savings account holders about the effects of debt restructuring?

 It has been clearly demonstrated that depositors are not adversely affected by the domestic debt restructuring process.  We have always assured our customers of our stability and that while the prevailing economic situation, monetary policy and inflation will have a bearing on returns, their funds are safe and sound with Commercial Bank. 

Q: Which of the Bank’s savings products are the best performing at present?

 The advantage of offering a diverse product portfolio is that the Bank has a solution for every savings need of the public. We see an upward momentum across every segment, but particularly in children’s, women’s and also high interest rate accounts such as Money Market accounts. Our specialized savings products such as children’s savings accounts Arunalu and Isuru and the teen savings account Dotcom along with Anagi savings accounts are also performing very well. Our youth centric product Vibe and the salary savings account Achiever are the emerging products that are creating hype in the market. 

Q: Going forward, what would the Bank like to see in terms of savings?

 We would like to see more diversified savings, customers opting for combinations of long-term and short-term deposits, and more people saving part of their earnings to meet specific future goals and emergencies.