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DFCC Bank forges ahead amidst a challenging environment

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Financial Results for the year ended 31 December 2021

DFCC Group recorded a PAT of LKR 3.7 Bn.

Advances grew by LKR 64 Bn to LKR 366 Bn (21% growth)

Deposits grew by LKR 10 Bn to LKR 320 Bn (3% growth)

The DFCC Group comprises of DFCC Bank PLC (DFCC), and its subsidiaries – Lanka Industrial Estates Limited (LINDEL), DFCC Consulting (Pvt) Limited (DCPL) and Synapsys Limited (SL), the joint venture company – Acuity Partners (Pvt) Limited (APL) and associate company – National Asset Management Limited (NAMAL).

DFCC Bank PLC, the largest entity within the Group, reported a profit before tax (PBT) of LKR 4,326Mn and a profit after tax (PAT) of LKR 3,222 Mn for the year ended 31 December 2021. This compares with a PBT of LKR 3,398 Mn and a PAT of LKR 2,388 Mn in the year prior.

The Group recorded a PBT of LKR 4,859 Mn and a PAT of LKR 3,665Mn for the year ended 31 December 2021, compared with LKR 3,944 Mn and LKR 2,847 Mn, respectively, in 2020. All the member entities of the Group made positive contributions to this performance.

The basic earnings per ordinary share (EPS) of the Bank improved to LKR 10.14 for the year ended 31 December 2021 from LKR 7.83 for the comparative year 2020, recording an increase of 29%.

The Bank’s Return on Equity (ROE) improved to 6.55% during the year ended 31 December 2021 from 4.93% recorded for the year ended 31 December 2020. The Bank’s Return on Assets (ROA) before tax for the year ended 31 December 2021 is 0.91%, against a figure of0.78% for the year ended 31 December 2020.

Net Interest Income

The Bank recorded LKR 12,653 Mn in net interest income (NII), which is a 15% increase year on year. This contributed to an increase in interest margin from 2.53% in December 2020 to 2.66% in December 2021.

Other Operating Income

Due to travel restrictions imposed during the year to curb the spread of the pandemic, business momentum was noticeably negatively affected.

The Bank staff at Head office and across branch network working continuously over the year has helped the Bank to increase non-funded business. This effort was fruitful as it resulted in an increase in net fee and commission income to LKR 2,596 Mn for the year ended 31 December 2021, up from LKR 2,061 Mn in the comparative year. Other operating income has increased mainly due to increases in dividend income and gains on the sale of fixed income securities during the year ended 31 December 2021.

Impairment Charge on Loans and Other Losses

Impairment provisions for the year ended 31December 2021 was LKR 4,485 Mn compared to LKR 3,298 Mn in the year prior. The NPL ratio increased from 5.56% in December 2020 to 5.60% in December 2021. In order to address the current and potential future impacts of Covid-19 and other prevailing economic conditions on the lending portfolio, the bank has made adequate impairment provisions, as at 31 December 2021, by introducing changes to internal models to cover unseen risk factors in the present highly uncertain and volatile environment, including additional provisions made for the Bank’s exposure to risk elevated sectors.

Operating Expenses

The Bank’s operating expenses increased from LKR 7,387 million during the year prior to LKR 8,381 million during the year under review, primarily due to increases in transport costs, as result of special transport facilities provided to staff due to covid restrictions and non-availability of public transport, along with all other additional expenses incurred in keeping and maintaining a safe and healthy environment within the Bank’s premises, to support client engagements and servicing. During the year, the Bank also created multiple channels to enhance service delivery to customers through a strong digital drive, providing access to uninterrupted banking services during difficult times. This resulted in an increase in IT related expenses in order to support the infrastructure upgrades. However, the numerous process automation and workflow management systems introduced during the year under review helped to facilitate effective cost controls, which resulted in operating expenses being curtailed and managed at these levels.

Other Comprehensive Income

Investments in equity securities and treasury bills and bonds (fixed income securities) are classified as financial assets and their change in fair value is recorded through other comprehensive income. Accordingly, a fair value loss of LKR 36Mn and a net fair value loss of LKR 2,469Mn were recorded on account of equity and fixed income securities, outstanding as at 31 December 2021 respectively. Unfavourable movements in Treasury bill and bond yields resulted in the fair value loss of LKR 4,532 Mn during the year. A gain of LKR 2,062 Mn was recycled through the Income statement by disposing of selected Treasury bill and bond holdings, originally categorized under fair value through other comprehensive income (FVOCI), with the objective of cash flow management to support loans and advance growth in line with projections. The action also goes in tandem with the bank’s expectations with regard to the domestic interest rate trend, going forward.

Business Growth

Despite the challenging business environment, the Bank continued its growth strategy by increasing both its deposit and loan portfolios during the year ended 31 December 2021. The loan portfolio grew by LKR 63,991 Mn to record LKR 365,901 Mn compared to LKR 301,909 Mn as at 31 December 2020, recording an increase of 21%. The Bank’s deposit base also experienced a growth of 3%, recording an increase of LKR 9,834 Mn to LKR 319,861 Mn from LKR 310,027 Mn as at 31 December 2020. This resulted in recording a loan to deposit ratio of 114%. Further CASA ratio improved to 31.25% as at 31 December 2021. Funding costs of the Bank were also contained by using medium to long-term concessionary credit lines. When these concessionary term borrowings are considered, the CASA ratio further improved to 36.47% as at 31 December 2021.

DFCC Bank continued its approach to tap local and foreign currency related long to medium- term borrowing opportunities to facilitate lending to deserving segments of the market whilst maintaining a high-quality portfolio.

Equity and Compliance with Capital Requirements

In order to support future growth as a full-service retail bank, the Bank has consistently maintained a capital ratio above the Basel III minimum capital requirements. As at 31 December 2021, the Bank has recorded Tier 1 and total capital adequacy ratios of 9.31% and 13.03%, respectively which is comfortably above the minimum regulatory requirements of 8% and 12% including capital conservation buffer of 2%. The Bank’s Net Stable Funding Ratio was 122.43%, which is well above the regulatory minimum of 100%.

CEO Comment

“Ensuring that we run our business responsibly, delivering profit with purpose, DFCC Bank will always place our customers at the forefront of everything we do. As a customer centric, digitally enabled bank, we will continue to be a source of stability to our customers and deliver value through an unmatched, top-of-the-line customer experience.

In line with our stated vision, the Bank embarked upon implementing a state of the art, core banking system which went live in October 2021. Considering the magnitude and complexity of the implementation, we have had to face some unforeseen challenge and I take this opportunity to express our sincere thanks and gratitude to all our clients, who have been understanding and patient with us this year, as we continuously strive to ensure a more futuristic, digitally-enabled system for our clients.

Despite the unprecedented challenges faced due to the ongoing pandemic, staff of DFCC Bank have and will continue to work with commitment to combat the negative socio-economic effects that have impacted our customers and assist them through tailor made financial solutions. We will continue to introduce banking services that put safety and security at the forefront and ensure that our internal processes are aligned with these same principles to serve our customers better.

We have a strong asset base to be deployed, but nothing is more important than the loyalty we earn from customers, not just by keeping their money and their data safe, but by offering products and services that meet their financial needs and requirements. This loyalty generates both more predictable returns and keen insights, enabling us to continuously improve our services and exceed customer expectations.”



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Flagship Colombo terminal held back by equipment tender failures

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The Colombo East Container Terminal (CECT), Sri Lanka’s flagship port project under the Sri Lanka Ports Authority (SLPA), remains unable to reach full operational capacity, more than four years after construction began, industry insiders say. Despite near-complete infrastructure and a strategic vision to bolster Sri Lanka’s position as a regional maritime hub, the terminal is paralyzed by a single missing component: straddle carriers, essential machines for moving containers between ships and yard storage.

“The terminal is essentially ready. Quay cranes, yard cranes, automation systems, and supporting infrastructure are all in place. Only straddle carriers are missing, and without them, full-scale operations are impossible,” Tharanga Jayasinghe, President of the Port Finance Divisional Independent Employee Association, told journalists.

Addressing a press conference held in Colombo Jayasinghe said that the delay is not due to employee performance. “SLPA staff have delivered outstanding results at the Jaya Container Terminal and partial operations at CECT. The responsibility to bring CECT fully on track now lies squarely with SLPA management and the authorized decision-makers overseeing this strategic national investment.”

Since 2021, the procurement of straddle carriers has gone through five tender attempts, each canceled or revised, resulting in significant lost time. Early tenders focused on leasing the machines, then on diesel-powered carriers, before SLPA made a strategic shift to hybrid straddle carriers, in line with CECT’s green terminal vision and international shipping standards.

Despite this shift, delays have persisted due to what employees describe as “questionable technical decisions and favoritism toward predetermined bidders.” The third tender round, which allowed both diesel and hybrid options, drew particular criticism. A compliant hybrid bid offering superior lifecycle efficiency was overlooked in favor of a diesel-only supplier, prompting legal action. While the case was pending, SLPA revoked the award and canceled the fourth tender, further prolonging the project.

CECT, a nearly USD 1 billion investment entirely financed by SLPA, represents one of the largest infrastructure projects ever undertaken by a Sri Lankan company. Funded during the economic recession that began in 2021, it is considered a source of national pride. Yet, Jayasinghe warned that this pride is overshadowed by concerns over repeated procedural missteps and apparent favoritism.

The current, fifth tender has raised new alarm. Qualification criteria appear to have been significantly diluted, allowing a previously favored company—reportedly with limited experience—to re-enter the process. For approximately USD 50 million worth of 30 hybrid straddle carriers, bidder experience requirements have been reduced to manufacturing just 15 units over five years, a stark contrast to the standard benchmark of 500 units for equipment of this scale.

According to Jayasinghe, these relaxed criteria risk awarding the contract to an under-experienced supplier, potentially undermining CECT’s operational credibility and discouraging shipping lines from engaging with the terminal. Observers note that one internationally recognized supplier withdrew from the process, citing lack of transparency and perceived bias.

Industry insiders warn that delays at CECT are not merely operational concerns—they also create openings for competing regional ports to capture Sri Lanka’s container traffic. “The demand is ready, but the terminal’s readiness is being held back by indecision and procedural mismanagement,” Jayasinghe said.

SLPA employees, he added, have long safeguarded national port assets from corrupt practices. Their vigilance secured the East Container Terminal (ECT) in 2021, and today they are raising alarms over the CECT tender process. Commercially, SLPA continues to perform well, including a recent Rs. 5 billion transfer to the Government Consolidated Fund. Shipping lines remain eager to engage with CECT, underscoring that the challenge is not demand but readiness.

The unanswered questions are stark: why has a strategic national procurement repeatedly failed, who is promoting inexperienced suppliers, and who will be held accountable? Until these issues are addressed, CECT remains not merely delayed, but denied—its potential, strategic importance, and the trust of the nation hanging in the balance, Jayasinghe added.

by Chaminda Silva ✍️

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SOLA Festival Returns: Building a Long-Term Model for Conscious Festival Culture

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SOLA Festival returns to Sri Lanka’s south coast as an evolving cultural movement, continuing its mission to redefine festivals through community collaboration, sustainability, and conscious design. The festival will take place on the 30th and 31st of January at The Doctor’s House, Madiha.

Developed in close partnership with the local community in Madiha, near The Doctor’s House, where the festival has established its home, the SOLA Festival was conceived as a response to the increasingly extractive nature of tourism, which too often takes more from local communities than it gives back. The festival is guided by the core values of Respect, Inclusion, Sustainability, Creativity, and Collaboration, bringing people together through music, workshops, immersive experiences, and community-led initiatives.

Founded by a collective of designers and event makers from Copenhagen, SOLA aims to become one of the first fully waste-free and circular festivals in Asia and a global role model for sustainable events. Chief festival organisers, designers Susanna and Miranda, whose portfolio includes installations and designs for Copenhagen Fashion Week as well as projects with Collective Fashion Justice, explained that the idea for the festival was inspired by how incredibly warmly they were welcomed into the local community in Sri Lanka and their desire to give back and support that community “We started SOLA to show that festivals can bring joy, creativity, and music while also giving back to the communities and environments that host them,” says Susanna. “SOLA was conceptualized and created with a strong focus on working in harmony with nature and fostering meaningful community connections. Together with ouramazing partners, we want to prove that conscious, community-led events are not only possible, but inspiring, joyful, and sustainable.”

Following its inaugural edition in 2025, SOLA Festival has positioned itself as an annual event in Sri Lanka, growing thoughtfully each year with a long-term vision rather than as a one-off project. The 2025 edition welcomed 800 guests, featured international and local DJs, and hosted five activities and workshops, laying a strong foundation for the festival’s future direction.

This year, the festival is looking to nearly double the number of attendants, and will feature over a dozen DJs from more than five countries including internationally renowned Yung Singh, and local legend DJ Shiyam.

More than a music festival, SOLA is a multidimensional platform for art, learning, sustainability, and connection, and in keeping with this vision, the programme also includes traditional, community centric, creative activities including communal weaving sessions, natural dye workshops, drum circles, beaded fabric jewellery workshops, make-your-own merch sessions and more.

SOLA is being developed within the principles of a circular economy, and the organisers view SOLA as a project to be built and refined over many years, with each edition deepening its impact. As the festival grows, SOLA aims to involve more local and international collaborators, with the goal of becoming an international role model for sustainable events.

Sri Lanka’s long-standing values around craftsmanship, resourcefulness, and care for the earth are central to this vision. The team believes the country has the potential to become a global leader in sustainable tourism.

Community collaboration remains at the heart of the festival’s programming. For the upcoming dition, SOLA is working with a growing network of partners, including ApiHappi, Selyn Fairtrade, Sarana Sri Lanka and Sambol Foundation. The official banking partner for the event is Hatton Nation Bank.

The SOLA team, together with a local school and WeCare will conduct a beach clean-up ahead of the festival. Post the clean-up, the children will participate in a crafting session focusing on recycling and upcycling everyday waste, while learning about plastic and street dogs. Sambol Foundation will host a natural dye workshop before the festival and the fabrics will be used for festival installations. Selyn Fairtrade, House of Lonali and ApiHappi, will contribute fabric that local women will use to make reusable decorations for the event, ensuring the festival avoids purchasing all new materials in the future. Selyn has also taken on producing festival merchandise and running a fabric bead workshop. The festival will open with a traditional Sri Lankan fire ceremony, organised in collaboration with Sarana Sri Lanka. SOLA will also organize a fundraiser in collaboration with WeCare, an organisation dedicated to the wellbeing of local street dogs.

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HNB Assurance PLC Recognized Among Sri Lanka’s Best 20 Workplaces for Women 2025

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HNB Assurance PLC was recognized among Sri Lanka’s Best 20 Workplaces for Women 2025 by Great Place to Work Sri Lanka, for the Company’s long-standing commitment to fostering an empowering workplace for women.

Over the years, HNB Assurance has introduced several progressive initiatives to support women at different life and career stages, including flexible work arrangements, caregiver and maternity support, leadership development programs, and platforms such as in.she, which champions women’s growth both professionally and personally. These efforts have contributed to a workplace where women are not only represented but are actively enabled to succeed.

Commenting on the recognition, the Executive Director / Chief Executive Officer of HNB Assurance PLC, Lasitha Wimalaratne stated, “Being recognized among Sri Lanka’s Best 20 Workplaces for Women is a powerful affirmation of who we are as an organization. At HNB Assurance, inclusion is not an initiative, it is a mindset embedded into how we make decisions and how we care for our people. We firmly believe that when women are empowered, organizations become stronger. This recognition belongs to every woman contributes to our culture every day.”

Navin Rupasinghe, Head of Human Resources / DGM of HNB Assurance PLC stated “This recognition reflects years of intentional effort to build a workplace where women feel heard and inspired to reach their full potential. From flexible policies to leadership pathways and a deeply people-centric culture, we have focused on creating an environment where women can grow without compromise. We are proud of how far we have come and remain committed to continuously raising the bar. Lastly, I’d like to thank Great Place to Work for this recognition as it motivates us to keep evolving our people practices and building a workplace where women can grow.

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