Bank of Ceylon Chairman Kanchana Ratwatte says that the bank ended 2020 as the undisputed market leader despite the COVID-19 pandemic and is confident that it could face any challenges put across in 2021.
According to him in 2020 the bank had to change gear and focus as the unfolding situation compelled it to innovate fresh strategies to face the situation. The experienced human resource in the bank rose to the occasion and faced the situation with vigor and vitality.
As the Bankers to the Nation, Bank of Ceylon continued to perform, playing a lead role in keeping the wheels of the economy moving as the crisis continued into the New Year as well, he said.
Following concessions announced by the Government and the Central Bank of Sri Lanka, with the advent of 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, he said.
To date, the Bank has disbursed more than Rs 39 billion under the ‘Saubagya COVID-19 Renaissance Facility’ by extending working capital to COVID-19 affected businesses. Further the bank disbursed Rs 128 billion for development and the agriculture sector including credit facilities under the ‘BOC DiviUdana’ loans scheme.
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.
Amidst the Socio-economic challenges that prevailed due to the pandemic situation, the Bank’s assets base grew by 17% to Rs 2.8 trillion, backed by an increase of 25% in the loan book. The Bank’s loan book stood at Rs 1.9 trillion and both Government and private sector lending contributed to growth, including lending to major infrastructure development projects initiated by the Government, funding requirements for 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.
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 Savings deposit (CASA) base which generates funds at low cost. The bank also recorded the highest in terms of inward remittances of US$ 2.7 billion as at end December 2020, an increase of 1.2% YoY. In addition to the latest Rs 10 billion AT one 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 14.0% 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 challenges from the COVID-19 pandemic, the Bank was 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 under review.
In addition, the Bank also installed 132 new CRMs. As at 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.