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Operationally strong ComBank Group posts healthy topline growth, amidst prudent provisioning

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The Commercial Bank of Ceylon Group has posted a strong operational performance in the first nine months as well as in the third quarter despite the continuing adverse effects of macroeconomic variables which have necessitated a tripling of impairment provisions for the nine months ended 30th September 2022 and reduced profits for the quarter as well as the year to date compared to the corresponding periods of last year.

Nevertheless, the Bank reported that the third quarter witnessed a reversal of the operating loss before Value Added Tax (VAT) on Financial Services of Rs. 3.581 billion reported for the second quarter of the year.These achievements were recorded even after providing relief for affected businesses and individuals in line with directions issued by the Central Bank of Sri Lanka as well as the Bank’s own relief schemes which included deferment of repayment terms of credit facilities, concessionary rates of interest on eligible loan products (debt moratorium) and waiving off certain fees and charges following the global pandemic, the Bank said.

Comprising of the Commercial Bank of Ceylon PLC, its subsidiaries and an associate, the Group reported gross income of Rs 195.573 billion for the first nine months of 2022 and Rs 76.056 billion for the third quarter, reflecting robust growth rates of 62.91% and 89.58% respectively in topline. Growth in loans and a noteworthy increase in income from interest-earning assets resulted in interest income for nine months improving by 56.15% to Rs 150.257 billion and by an even more impressive 89.04% to Rs 62.140 billion for the third quarter.

However, the growth in deposits in the review period combined with a sharp rise in interest rates and the consequent conversion of low-cost funds to high-cost funds saw interest expenses increasing by 79.58% to Rs 87.443 billion for the nine months, and by a whopping 142.71% to Rs 40.039 billion for the third quarter. The Bank’s CASA ratio, an industry benchmark, stood at 40.14% at the end of the nine months reviewed, as against 47.83% at end 2021 and 42.72% at end 2020. The increase in interest rates and the consequent reduction in the CASA ratio contributed to the higher interest expenses recorded in the period reviewed.

Nevertheless, net interest income for the nine months improved by 32.15% to Rs 62.814 billion, while net interest income for the third quarter increased by 34.97% to Rs 22.101 billion. With the escalation in interest expenses, net interest income accounted for 60.49% of the total operating income of the nine months reviewed, in contrast to 68.94% at the end of the third quarter of 2021.

Noting that the external challenges that have depressed profit and other indicators continued in the third quarter, Commercial Bank Chairman Prof. Ananda Jayawardane said: “The growth we have recorded in business volumes indicates that core banking operations remained intact. The single biggest impact on growth in terms of bottom line continues to be the burgeoning provisioning for impairment, which is an unavoidable response to the prevailing economic environment. Such provisioning assures our stakeholders that the Bank is financially prepared for any future contingencies.”

The Bank’s Managing Director and CEO Mr Sanath Manatunge commented: “Our results underline that at Commercial Bank, risk appetite and risk tolerance continue to be well-managed, especially in the context of the challenges faced by the banking sector. We have continued our focus on preserving the quality of the loan book, managing interest rates and liquidity, while improving compliance to minimize reputational risk. The increase in the cost of funds is inevitable, but all possible steps have been taken to increase the fee-based income and to maintain non-interest costs at acceptable levels.”

According to the Interim Financial Statements filed with the Colombo Stock Exchange (CSE), the Commercial Bank Group recorded a total operating income of Rs 103.837 billion for the nine months under review, an improvement of 50.59%. The figure for the third quarter was Rs 34.605 billion, reflecting an even stronger growth of 53.07%.

The net fee and commission income of the Group improved by 61.84% to Rs 13.913 billion for the nine months, while other income, which comprises of net gains from trading, net gains from derecognition of financial assets and net other operating income, grew by 111.45% to Rs 27.111 billion. Net gains from trading for the period amounted to Rs 34.124 billion compared to Rs 2.037 billion recorded for the corresponding period of the previous year. This was primarily from realized and unrealized gains from forward exchange contracts, spot and swap transactions and mark to market gains.

Impairment charges and provisions for other losses for the nine months amounted to Rs 52.272 billion, reflecting an increase of Rs 34.274 billion or 190.44% from Rs 17.997 billion recorded for the corresponding nine months of 2021. For the third quarter alone, impairment charges nearly quadrupled to Rs 17.053 billion from Rs 4.343 billion provided in respect of the third quarter of last year. Notably, a substantial portion of the impairment charges is on account of Government Securities denominated in Foreign Currency in view of the Sri Lankan Sovereign rating downgrade and the debt restructuring program currently being negotiated by the Government. Further, the exchange impact on impairment charges on loans and advances and Government Securities denominated in foreign currency was adjusted in Net Other Operating Income where the corresponding exchange gains are recognised. This was done in order to accurately reflect the underlying cost of risk and also to normalize the exchange gains and losses reported, the Bank said.

As a consequence of the increased impairment charges, net operating income for the nine months under review improved only by a marginal 1.20% to Rs 51.566 billion, while the figure of Rs 17.552 billion for the third quarter reflected a decline of 3.9%.

Operating expenses increased by 22.26% for the nine months to Rs 26.017 billion, and by 10.90% for the third quarter to Rs 7.985 billion, mainly due to the impact of inflationary pressures, Rupee deprecation and an increase in Government taxes. Consequently, personnel expenses increased by 20.40%, depreciation and amortization by 8.58% and other operating expenses by 30.59%. As a result, the Group’s operating profit before Value Added Tax on Financial Services reduced by 13.90% to Rs 25.549 billion for the nine months under review and by 13.53% to Rs 9.567 billion for the third quarter.

With VAT on Financial Services reducing by 23.81% to Rs 3.511 billion, the Group reported a profit before tax of Rs 22.036 billion for the nine months, recording a decline of 12.09% over the first nine months of 2021. Income tax for the period increased by 8.70% to Rs 6.576 billion despite the drop in pre-tax profit for the period under review as the figure for the corresponding nine months of 2021 was reduced by the reversal of an over-provision for 2020 resulting from the reduction in the corporate tax rate from 28% to 24%, which was adjusted in the first quarter of 2021.

Consequently, the Group’s profit after tax of Rs 15.460 billion for the nine months represented a decline of 18.70% compared to the corresponding period of last year. For the third quarter, the Commercial Bank Group reported a net profit of Rs 6.283 billion, a reduction of 5.72% compared to the same period of last year. Taken separately, Commercial Bank of Ceylon PLC posted a profit before tax of Rs 20.649 billion for the nine months, a drop of 15.46% while profit after tax for the third quarter was down 22.40% to Rs 14.438 billion.

Total assets of the Group grew by Rs 406.810 billion or 20.51% over the nine months to reach Rs 2.390 trillion as at 30th September 2022. Asset growth over the preceding 12 months was Rs 427.840 billion or 21.80%. A significant portion of the growth in assets during the period under review was due to the depreciation of the Sri Lankan Rupee against the US Dollar up to June 2022.

Gross loans and advances of the Group increased by Rs 147.574 billion or 13.48% to Rs 1.243 trillion as at 30th September 2022, while the growth of the loan book of the Group over the preceding year was Rs 175.451 billion or 16.44%.

Total deposits of the Group recorded a growth of Rs 380.829 billion or 25.86% in the nine months to Rs 1.853 trillion as at 30th September 2022, while the YOY deposit growth was Rs 405.581 billion or 28.01%. Here too, the Bank said the primary reason for the growth in gross loans and advances and deposits was the sharp depreciation of the Sri Lankan Rupee against the US Dollar in the first half of the year.

In other key indicators, the Bank’s net assets value per share increased by 14.16% to Rs 157.63 from Rs 138.08 as at end 2021. The Bank’s Tier 1 Capital Ratio, and the Total Capital Ratio stood at 11.571% and 14.355% respectively as at 30th September 2022, both above the statutory minimum ratios of 10% and 14% respectively. The Bank’s net interest margin improved to 3.80% for the nine months ended 30th September 2022, from 3.51% for the year 2021 and 3.37% for the nine months ended 30th September 2021. The Bank’s return on assets (before taxes) stood at 1.29% and return on equity at 10.72%.In terms of asset quality, the Bank’s impaired loans (stage 3) ratio stood at 4.09% compared to 3.85% at end 2021, while its stage 3 impairment to stage 3 loans ratio stood at 40.49% as at 30th September 2022, compared to 42.76% at end 2021.

The Bank’s Cost to Income Ratio before VAT on Financial Services improved to 24.94% for the period under review from 31.61% for 2021 and 33.95% for 2020. The cost to income ratio inclusive of VAT on Financial Services improved to 28.39% from 37.97% for 2021 and 39.96% for 2020.

Sri Lanka’s first 100% carbon neutral bank, the first Sri Lankan bank to be listed among the Top 1000 Banks of the World and the only Sri Lankan bank to be so listed for 12 years consecutively, Commercial Bank operates a network of 268 branches and 940 automated machines in Sri Lanka. Commercial Bank is the largest lender to Sri Lanka’s SME sector and is a leader in digital innovation in the country’s Banking sector. The Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets; Myanmar, where it has a Microfinance company in Nay Pyi Taw; and the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake.



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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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