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| BOC Chairman Kanchana Ratwatte |
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| BOC General Manager D.P.K. Gunasekara
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The Bank of Ceylon (BOC) said yesterday it ended 2020 yet again as the undisputed industry leader, as it managed to extend billions of support to the economy and customers whilst maintaining profitability in
a challenging year amidst the COVID-19 pandemic.
Pursuing innovative fresh strategies, the Bank management said they rose to the occasion and faced the situation with vigor and vitality. “Bank of Ceylon continued to perform, playing a lead role in keeping the wheels of the economy moving as the crisis continued to the New Year as well,” the Bank said.
“We remain the resilient leader,” BOC Chairman Kanchana Ratwatte told journalists yesterday.
Stepping up its role as bankers to the nation, BOC’s loan book increased by 25% with the loan book as at 31 December 2020 amounting to Rs. 1.9 trillion, whilst its asset base rose by 17% to Rs. 2.8 trillion.
General Manager D.P.K. Gunasekara said apart from the Rs. 551 billion support as debt moratorium for over 350,000 customers, BOC lent Rs. 128 billion for the development and agriculture sector including facilities under the ‘BOC DiviUdana’ scheme to over 600,000 customers. Separately, it topped the banking industry with Rs. 42 billion worth concessionary working capital under the Central Bank-backed ‘Saubagya Renaissance Facility’ to over 30,000 COVID-hit enterprises and individuals. Lending for housing amounted to Rs. 11 billion among 6,538 customers (at 6.25% interest rate for the first five years and floating or fixed rate thereafter) and Rs. 1 billion loans for solar energy installations to over 1,300 customers at 4% interest rate.
The Bank said lending included to both Government and private sector, major infrastructure development projects initiated by the Government, mid-corporates for business expansion, lending to the SME sector, and other priority sectors such as agriculture, fisheries and related industries. Term loans, scheme loans, personal loans and overdrafts are the key contributors to loan growth during the period. The term loan portfolio grew by 28% demonstrating the Bank’s support in terms of working capital requirements.
Despite the challenging situation in the country, the Bank is moving forward with stable performance and reported a Profit Before Tax (PBT) of Rs. 16.6 billion and Profit After Tax (PAT) of Rs. 11.7 billion, for the nine months ending 30 September 2020. The total income of the Bank for the period was Rs. 181.8 billion with a marginal increase of 2% YoY. The non-fund-based income for the period amounted to Rs. 12.9 billion showing an increase of Rs. 1.7 billion YoY, and an exchange gain of Rs. 3.6 billion, which contributed to this growth.
Chief Financial Officer Russell Fonseka said lower interest rates and reduction in administrative cost were among factors that helped the Bank remain profitable.
The Bank’s deposit base, which represents 24% of the industry, increased during the year, despite low interest rates. The Bank’s deposit base of Rs. 2.3 trillion represents 33% of the Current and Saving deposit (CASA) base which generates funds at low cost.
BOC also recorded the highest in terms of inward remittances of $ 2.7 Billion as at end December 2020, an increase of 1.2% YoY.
Deputy General Manager (International) R.M.N. Jeewantha said that the BOC works with around 100 exchange houses, 15 with which a special user friendly App (and a dedicated one in Korea) enabling migrant workers convenience and security to remit funds.
In addition to the latest Rs. 10 billion AT 1 Bond issue on 1 December 2020, the Bank successfully executed issuance of its first Additional Tier 1 (AT1) Bond of Rs. 5 billion during the month of July 2020. These bond issuances have resulted in further strengthening the capital base of the Bank by providing the required capital base for the business expansion.
The Bank’s Tier 1 Capital and Total Capital ratio stood at 10.4% and 14% respectively as at 30 September 2020, which are above the regulatory norms. The Bank’s liquidity position was also at a favourable level, reporting 29% statutory liquid assets ratio above its norm of 20%. The Bank successfully managed to maintain its Fitch local rating as AA+, remaining steady as a resilient market leader. BOC maintains its International rating on par with the sovereign.
Despite COVID-19, the Bank strengthened its capabilities to cater to customers in the best possible way, while continuously delivering services with strict adherence to health and safety measures. Senior Deputy General Manager (HR) K.E.D. Sumanasiri said that in order to fast track the debt moratorium as well as COVID-19 concessionary working capital, BOC employees worked long hours in the national interest.
The Bank was also able to expand its customer service by opening one new branch and two new ‘Limited Service’ branches, and has relocated 22 branches during the year in review. In addition, the Bank also installed 132 new CRMs.
As of now the Bank has expanded its network up to 2,000 local customer touch points serving millions of Sri Lankans across the country.
Adapting to the new normal, the Bank increased its focus on digital service channels, with customers showing a notable shift from physical banking to digital banking channels, marked by an increase in online transactions through B-app, Smart Pay, and Online Banking during the recent latter part of the year. Going beyond providing funding requirements, the Bank in its role as ‘Bankers to the Nation,’ went a step beyond and conducted SME entrepreneur knowledge enhancement forums outside the Western province, sharing key experiences and knowledge to help rebuild businesses, amidst the challenges of the pandemic, while paying maximum attention to the health and safety of both staff and customers.
The Bank earned global recognition as one of the top 1,000 banks in the world, as listed by ‘The Banker Magazine’ (UK) with the country rank No.1. BOC was also awarded the ‘Peoples Banking Service Brand of the Year’ at the SLIM – Nielsen’s Peoples Awards 2020, which reflects the brand strength among the general public. Brand Finance Lanka in partnership with Media Services Ltd. has ranked Bank of Ceylon as the country’s No.1 Banking brand and No.1 Bank for the last 12 consecutive years in their ‘Brand Annual’ publication. BOC also won its place as one of the Top-most Admired Companies in Sri Lanka as denoted by the International Chamber of Commerce Sri Lanka, CIMA Sri Lanka and Daily FT. It also won the ‘Best HR Organisation to work for,’ at the Global HR Excellence Awards 2020, the ‘The Best Employer Brand Awards 2020’ and was recognised as the ‘Leading Partner Bank in Sri Lanka 2020’ for Asian Development Bank’s Trade and Supply Chain Financing.
