Business

BoC concludes 2021 with unprecedented value creation for all stakeholders

Published

4 years ago

2022/03/1

The, year 2021 was another tumultuous year for the entire world due to wider and much longer impacts turned out by the Covid-19 pandemic. Fight back demanded quick response strategies with new thinking. However, ably supported by BoC by facilitating the priority imports of vaccines, the Nation was able to bring out much optimism during the mid and latter parts of the year.

Financial Performance

Speaking on the Bank’s performance for the year 2021, the General Manager/CEO of the Bank of Ceylon, K E D Sumanasiri stated, the Bank was able to reiterate its position as the undisputed market leader in Sri Lanka’s banking sector, demonstrating its unparalleled ability to truly support its customers and the overall economy in trying times. Demonstrating its strength, agility and strategic approach in succeeding in the midst of challenges, the Bank was able to show a notable increase in both its fund-based and fee-based income during the year and recorded Rs. 43.2 billion Profit Before Tax, regardless of headwinds created by market interest rates fluctuations and stressed portfolio quality emanating from Covid-19 related economic impacts. This is a remarkable achievement for the Bank as it denotes the Bank’s strength of converting challenges into opportunities. “Further, the Bank’s asset book surpassed Rs. 3.0 trillion during the year surpassing another milestone in our journey” he mentioned.

Fund Based Income

Mostly, owing to loan growth and continuous credit monitoring efforts put in place during 2021, the Bank reported Rs. 260.5 billion interest income which is a 15% increase over the year 2020. The benefits of the remarkable loan growth achieved in the previous year materialized during this year, generating an interest income of Rs. 193.1 billion through loans and advances which is 74% of the total interest income. The main contributive portfolios were overdraft, term loans and personal loans. The Debt instruments which mainly comprises of Government Treasury Bills, Bonds and other Foreign Currency Sovereign Bonds brought the major portion of interest income earned from the investment portfolio which stood at Rs. 65.7 billion.

In the meantime, interest expenses declined by 2% to Rs. 149.3 billion in line with the improvement in the CASA ratio to 36% from 35% (2020) and repricing the deposits at lower rates. The inverse movement in interest income and interest expense positively contributed to Net Interest Income (NII) of the Bank and NII increased by 49% to Rs. 111.3 billion YoY.

Non- Fund Based Income

Non-fund-based income of the Bank grew by 42% YoY basis and the main contributors were fee and commission income and exchange income. Fee and Commission income has shown a sizable growth owing to a flourishing trend reported towards digital banking channels. Suitably, transactional banking related fee and commission income has formed a major portion of fee and commission income reporting 69% of the fee and commission income. During the period under review, an exchange gain of Rs. 9.2 billion was also reported.

Impairment Charges for Loans and Advances and Other Financial Instruments

Impairment charges for loans and advances for the period amounted to Rs. 35.4 billion bringing the loan to impairment provision reserve ratio to 6%. NPA ratio stood at 4.5% against 4.8% reported by end 2020. Nevertheless, in calculating the impairment charge, the Bank always follows a prudential approach; given the high degree of uncertainty and extraordinary circumstances in the short-term economic conditions mainly caused by the continuous disruptions to businesses. The Bank made an additional expected loss provision using management overlays on identified risk elevated industries.

Individually Significant Customers were thoroughly assessed for their repayment capacity irrespective of the moratorium or concessions they enjoyed due to the Covid-19 situation and necessary provisions were made along with the independent review. Consequently, the provision made for stage III customers escalated by Rs.19.7 billion (19%) and provision for Stage II customers increased by Rs.3.7 billion (32%).

The Bank has considerable exposure to investments in foreign currency denominated sovereign instruments by way of Sri Lanka Development Bonds and International Sovereign Bonds. As per the regulatory and Accounting Standards requirements a significant amount of provision amounting to Rs. 8.3 billion was made for investments in aforesaid instruments accounting the impact of sovereign downgrade.

Operating Expenses

The operating expenses of Rs. 41.7 billion consists of personnel costs, assets maintenance, deposit insurance and other overhead expenses. The increment of 26% by Rs. 8.6 billion reported in operating expenses in line with the increase in personnel expenses due to the revision of salary scales according to the collective agreement, absorption of Trainee Staff Assistants to the permanent cadre and provision made for post-retirement benefit plans. Other expenses settled at Rs. 12.6 billion for the year with a 18% upward, backed by an increase in deposit insurance premium due to growth in deposit base, upturn in office administration and establishment expenses which includes special transport arrangements for staff and expenses made in relation to Covid-19 related special safety measures at the Bank’s premises. However, the Bank’s cost to income ratio of 32% shows prudent and effective cost management mechanisms adopted by the management to maintain the cost escalation in line with revenue growth.

Tax Expenses

VAT on financial services which is charged based on the value addition made by the financial services has a direct relationship to the growth in PBT. That’s being the case, the growth of 80% reported in operating profits, the VAT on financial services also increased to Rs.9.0 billion with the 65% YoY growth.

Although the income tax expenses reported in the Income statement is Rs. 5.6 billion after the adjustments made for deferred tax, the total income tax payment which will be paid for the year of assessment accounts to Rs. 10.3 billion.

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Business

Sri Lanka worthy of being ranked as the world’s top holiday spot – cricketing great Wasim Akram

Published

4 hours ago

2026/06/23

Sahan Weerasooriya

Cricketing great Wasim Akram being felicitated by chairman Softlogic Life Ashok Pathirage.(R)

Pakistani cricketing legend Wasim Akram said Sri Lanka is the best tourist destination and is worthy of being ranked the world’s top holiday spot. ‘The island’s natural beauty and my decades-long connection with the country, are factors that enhance Sri Lanka’s value, he explained.

Speaking at a Softlogic Life investor forum in Colombo last Tuesday Akram said Sri Lanka remained one of his favourite destinations despite having traveled extensively around the world.

Akram who captained the Pakistani national cricket team and was celebrated as Softlogic Life’s brand ambassador said filming the company’s latest television commercial gave him another opportunity to experience some of the country’s most scenic locations, including Galle and the central highlands.

Akram said Sri Lanka’s landscapes, rivers and coastline were among the most beautiful he had beheld during his travels and expressed surprise that the country was not already considered one of the world’s leading tourism destinations.

Having first visited Sri Lanka as a teenager in 1985, Akram said he had returned numerous times over the years as a player, commentator and tourist. He added that he plans to continue visiting the island regularly and hopes to explore more of the east coast in the future.

Softlogic Life had impressive growth last year and is looking forward to introducing new life insurance products to the local market considering the increasing the aging population in Sri Lanka.

By Hiran H. Senewiratne

Business

Veenath Indrajith from the University of Sri Jayewardenepura wins the 2026 Saman Kelegama Memorial Research Grant

Published

4 hours ago

2026/06/23

Sahan Weerasooriya

Veenath Indrajith / Dr Saman Kelegama

Veenath Indrajith, a fourth-year undergraduate from the Department of Business Economics at the University of Sri Jayewardenepura, has been selected as the winner of the Saman Kelegama Memorial Research Grant for 2026. Indrajith’s academic and professional interests lie in economics, finance, investment, and policy-oriented research. In addition to his undergraduate studies, he is currently pursuing the Chartered Accountancy qualification in Sri Lanka, demonstrating a strong commitment to analytical rigour and professional excellence. He aspires to contribute to evidence-based policymaking through applied economic research.

Indrajith’s research study, titled “Small Vehicle Businesses and Household Investors Using the Second-Hand Car Market as an Alternative Investment Method in the Colombo District of Sri Lanka,” will adopt a qualitative research approach to explore the motivations, experiences, perceived returns, and risks associated with investing in used vehicles. By analysing household-level decision-making and investment behaviour, the research aims to shed light on a relatively underexplored area of Sri Lanka’s alternative investment landscape. The findings are expected to provide valuable insights for policymakers, particularly in relation to financial literacy, household investment strategies, and the development and regulation of alternative investment markets in Sri Lanka.

The Saman Kelegama Memorial Research Grant, established in 2018, honours the legacy of the late Dr. Saman Kelegama, former Executive Director of the Institute of Policy Studies of Sri Lanka (IPS), whose work significantly shaped public policy discourse on socio-economic development in Sri Lanka and the broader South Asian region. The grant is awarded annually to an outstanding undergraduate student from a Sri Lankan university, with the aim of encouraging innovative, policy-relevant research and nurturing the next generation of policy thinkers. As part of this grant, Indrajith will receive training and mentoring from IPS senior researchers to complete the proposed study.

Business

Delmege Consumer partners with Daraz

Published

4 hours ago

2026/06/23

Sahan Weerasooriya

Signing ceremony - from Left to Right - Dushan Khadagammege, Head of Retail and Supply Chain, Daraz, with the team from the Delmege Group comprising Baratha Piyadigama Group Head of Marketing, Shanaka Rajapaksha Manager Marketing Delmege Consumer, Atheeq Kabeer Manager E- Commerce and Digital Marketing .

Delmege Consumer, the flagship FMCG cluster of the Delmege Group, has evolved into one of Sri Lanka’s most trusted household names, building lasting relationships with communities across the island through a diverse portfolio of quality products that have become an integral part of consumers’ everyday lives for generations. Renowned for enriching households with Delmege’s own brands, leading local brands, and world-renowned international brands, the company continues to strengthen its presence, reputation, and connection with consumers nationwide.

A key strength of the FMCG cluster lies in the strong and enduring partnerships it has cultivated with suppliers, enabling the company to establish a responsive, time-sensitive, and mutually beneficial distribution network that has made a significant impact across Sri Lanka. Through its extensive reach and customer-focused approach, Delmege Consumer serves retail, wholesale, HoReCa, export, and modern trade channels, supported by flexible channel management strategies and winning consumer-centric propositions that cater to evolving market needs.

Further strengthening its distribution network and expanding its digital footprint, Delmege Consumer has partnered with Daraz, Sri Lanka’s leading e-commerce platform, to offer customers a more convenient, seamless, and accessible way to purchase its extensive range of FMCG products online.

Commenting on the partnership, Anil Meegahage, CEO of Delmege Consumer, stated:

“At Delmege Consumer, we are committed to innovation, continuously strengthening our product portfolio, and enhancing customer convenience and experience. Our partnership with Daraz enables us to serve customers across the country more efficiently by providing them with an easy, secure, and reliable platform to purchase trusted Delmege FMCG products online.”

Adding further, Baratha Piyadigama, Head of Group Marketing, Delmege, said:

“This partnership with Daraz marks another important milestone in our journey to enhance brand positioning, visibility, and awareness, especially at a time when digital and online commerce continue to gain significant momentum. As one of Sri Lanka’s leading FMCG distributors, we are proud to extend our trusted portfolio of products into the digital space through Daraz, ensuring customers across the island can conveniently access their favourite products with just a few clicks.”

Delmege’s extensive FMCG portfolio includes well-known Delmege branded products such as Canned Fish, Hiru Kahata Tea, Delmege Soya, Flavours and Colours, Delmege Pasta,

Delmege Noodles, and Salt, together with the much-loved Motha range of dessert ingredients, beverages, and mixes. The company also represents globally renowned international brands including Kellogg’s cereals such as Corn Flakes, Muesli, and Oats; Pringles; and the Ferrero portfolio featuring Ferrero Rocher, Nutella, Kinder Joy, and Tic Tac. Through its diverse and trusted brand portfolio, Delmege Consumer continues to reinforce its position as one of Sri Lanka’s leading FMCG companies.