Business

Sri Lanka and Bangladesh shouldn’t compete for the same objective: Bangladesh HC

Published

3 years ago

2022/11/30

President NCCSL, Nandika Buddhipala presents a token of appreciation to Bangladesh High Commissioner Tareq Md Ariful Islam at the bilateral trade and investment forum held at the National Chamber of Commerce recently.

* Political stability has mainly driven the growth trajectory in Bangladesh

* Bangladesh is poised to capture a bigger share of the global apparel market

* More Sri Lankan businesses should tap the growth centre next door

* Draws attention to a great shortcoming in connectivity between the two countries

by Sanath Nanayakkare

Sri Lanka and Bangladesh can gain more from bilateral trade cooperation by strategically utilizing the two countries’ respective comparative advantages and strengths than from competing with each other for the same objective, Bangladesh High Commissioner in Sri Lanka, Tareq Md Ariful Islam said in Colombo recently.

“All the more so because the two countries have a similar product range which has led to a low bilateral trade volume of US$ 200-300 million,” he pointed out.

The High Commissioner made these remarks while addressing a bilateral trade and investment forum at the auditorium of the National Chamber of Commerce (NCCSL) where he was the special guest speaker.

“The similarity in our product range is the main reason behind low trade volume. However, there is a lot of scope for improvement in our trade ties. What we need to do is to couple our respective, comparative advantages and build resilient cooperation to be more competitive in the global market,” he observed.

“The two countries have just completed 50-years of diplomatic relationship.

It has been a long, enduring relationship based on friendship, goodwill and good neighborliness. Over these 50 years, we have enjoyed very strong bonds of solidarity and friendship. Our business ties are also very strong. Now we need to capitalize on our excellent political relations to make the business relationship stronger to make it more tangible, so that it can touch the lives of our people and also help Sri Lanka’s endeavors towards its economic recovery,” he said.

Presenting a comprehensive picture under the theme of the discussion, the High Commissioner went on to say:

“Sri Lankan business community would like to know what opportunities are available in Bangladesh for trade and investment, its government policies, macroeconomic data and how the Bangladesh High Commission in Sri Lanka can help them in this regard.”

“According to my view, preferential trade agreements (PTAs) or free trade agreements (FTAs) shouldn’t be seen through the lens of revenue earning or revenue loss. It means much more than that. While revenue loss and revenue gains are definitely important, there are many other benefits that PTAs and FTAs can bring to our economies; for example, creation of employment and enhancement of our respective competitiveness in the global market. So we should take a holistic approach to FTAs and PTAs. If we can judiciously select the respective tariff lines, then there is every possibility that a PTA or FTA between Bangladesh and Sri Lanka can be successful. We are very encouraged to see that the current government has put a lot of emphasis on PTAs and FTAs with bilateral partners. We started our negotiation late last year. So far we have made good progress, but we still have to do more.”

“Bangladesh initially received substantial investment from Sri Lanka; mostly in readymade garments sector and now Sri Lankan companies have extended into health, power, logistics, financial sector etc. Now they have diversified into investment banking, wealth management, paint, packaging, FMCG etc. This is an indication about the growing, diversified market in Bangladesh. Most of the conglomerates in Sri Lanka have very successful operations in Bangladesh and more Sri Lankan businesses are showing interest in doing business in Bangladesh.”

“Bangladesh has had consistently high economic growth. The average GDP growth in the last 30 years is 6.6% which is among the best in the world. In 2019, it reached 8.15% right before the pandemic. During the pandemic, Bangladesh had 5.4% growth which was among the highest in the world during Covid time. In financial year 2020-21 our growth was 6.9% according to the IMF. In 2021, it went up to 7.2%. The focus for 2022-23 according to the IMF is 6%, but we are hopeful of achieving higher growth. Our foreign debt to GDP is 11.86% and local debt to GDP is 31.42% which is the lowest in the region. Bangladesh is a USD 400 billion plus economy – 41 largest in terms of nominal GDP and 32 largest in terms of purchasing power parity. Per capita income has soared to USD 2,824. Foreign exchange reserves are now USD 34 billion. It was USD 44 billion last year and the decline was due to the rise in the prices of essential commodities in the global market.”

“We have sought an IMF package. We got USD 4.5 billion. This was not a bailout. It was to deal with balance of payment issues. Bangladesh’s Inflation is at a single digit of 8.9%. Remittance in 2019-2020 was USD 18 billion and even during the pandemic, it went up to USD 24 billion. Our exports crossed the USD 50 billion mark last year for the first time.”

“There is a winning combination of conditions for any potential investor or business house to do business in Bangladesh. The main driving force has been our political stability which has mainly helped the growth trajectory in Bangladesh. Ours is a domestic market with 165 million people and out of that, 37 million is the growing middle class whose per capita income is between USD 5,000 and 7,000. On top of that two million are joining the middle class each year.”

“Because Bangladesh has handled geo-politics well, it has become a sought-after destination for many regional business houses to relocate their establishments. We have special economic zones dedicated for Japan, India, China and South Korea. This shows that investment is safe and profitable in Bangladesh, therefore, Sri Lanka can further tap this growth centre next door.”

“Bangladesh is poised to capture a bigger share of the global apparel market. Sri Lanka can also contribute in that direction. Apparel industry of the two countries can utilize the comparative advantages in the production process, value addition in re-exports etc. We can utilize Sri Lankan expertise in this sector. Sri Lankans have helped take our readymade garments sector to where it’s today. Our apparel industry continues to benefit from your human resources.”

“Through cooperation, we can enhance our global competitiveness in our IT products. Manufacturing of pharmaceutical products and medical equipment also has more scope for investment.”

“About 700,000 Bangladeshis spend USD 3.5 million every year for overseas medical treatments. That’s a big market Sri Lanka can tap. Electronic components, agricultural food processing, leather and footwear, medical insurance, steel and cement, renewable energy, FMCG, retail operations, supply chain and logistics, financial sector are other sectors with opportunities for investment, supported by proactive policies of the Bangladesh government.”

“Although both countries are into tea, your global tea brands can partner with us in making fine blended tea, “he said.

The High Commissioner chose this forum to draw attention to a great shortcoming in connectivity between the two countries by sea and air which leads to the disadvantage of Sri Lanka tourism.

“Bangladeshis with disposable income travel to all regional destinations, but they are not coming to Sri Lanka because of the poor connectivity. If connectivity and affordability of air fares can be taken care of, Sri Lanka tourism can benefit from it,” he said.

In 2020, Bangladesh imported $153 million worth of goods from Sri Lanka while exports from Bangladesh to Sri Lanka stood at $ 48 million.

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Seylan Bank well-positioned for growth as core performance strengthens

Published

15 hours ago

2026/04/23

Sahan Weerasooriya

Seylan Bank PLC has delivered a resilient financial performance for 2025, surpassing market forecasts and signaling a steady recovery in its underlying credit profile, according to a recent equity research update by First Capital Holdings PLC.

The bank recorded a net profit of LKR 12.2 billion for the full year 2025, marking a significant 20.3% year-on-year increase. Performance in the final quarter was particularly notable, with net profit reaching LKR 3.8 billion, a 9.4% rise compared to the same period in 2024. This result exceeded analysts’ expectations by 5.4%, underscoring the bank’s strengthening fundamentals.

Core banking operations remained a primary driver of growth. Net interest income (NII) expanded by 18.3% year-on-year to LKR 11.3 billion in 4Q2025. This was supported by an 8.3% increase in interest income and a marginal contraction in interest expenses, reflecting highly favorable funding dynamics.

Total operating income surged by 51.1% in the final quarter, a sharp jump largely attributed to the absence of International Sovereign Bond (ISB) restructuring losses that had impacted the previous year’s performance. Fee and commission income also saw robust growth of 21.8%, fueled by increased activity in cards, remittances, and international trade.

A standout highlight for the period was the aggressive expansion of the bank’s loan book, which grew by 29.6% year-on-year to reach LKR 599.8 billion by the end of 2025. The deposit base also grew by 13.3%.

Asset quality showed marked improvement as the bank successfully navigated the tail-end of the economic recovery. The Stage 3 loan ratio, a key indicator of credit risk, fell to 1.03% in 4Q2025, down significantly from 2.10% a year earlier. This was further bolstered by a 95.1% contraction in impairment charges on loans and advances, reflecting a move toward more stable provisioning.

Seylan Bank’s capital and liquidity positions remain a source of strength, staying comfortably above regulatory requirements. The bank’s Total Capital Ratio stood at a healthy 17.89%, while the liquidity coverage ratio remained elevated at nearly 230%, providing ample buffers to support future lending.

Looking ahead, First Capital projects a more moderated pace of growth as the broader economic momentum eases and the monetary easing cycle reaches its trough. Nevertheless, analysts remain optimistic, projecting net profits to rise to LKR 15.9 billion in 2026 and LKR 18.4 billion in 2027.

While the bank’s estimated fair value for 2026 has been revised to LKR 140 per share to reflect market re-rating trends, the stock still offers a compelling total return of approximately 37%. A newly introduced 2027 fair value of LKR 155 implies an even higher potential return of 52%. Citing these strong fundamentals and the significant upside potential, the First Capital report maintains a “Buy” recommendation on Seylan Bank.

By Sanath Nanayakkare

Business

Bank of Ceylon reinforces national economic vision with 2025 Annual Report presentation

Published

15 hours ago

2026/04/23

Sahan Weerasooriya

In a significant moment reflecting renewed confidence in Sri Lanka’s economic recovery and forward-looking national strategy, the Bank of Ceylon (BOC) formally presented its 2025 Annual Report to His Excellency President Anura Kumara Dissanayake. The occasion reaffirmed the Bank’s role as the nation’s leading financial institution and a key pillar of economic stability.

The report was officially handed over by Chairman Mr. Kavinda De Zoysa and General Manager/Chief Executive Officer Mr. Y. A. Jayathilaka, who outlined the Bank’s performance, resilience, and strategic direction during a pivotal phase for Sri Lanka’s financial sector.

BOC’s 2025 Annual Report highlights a strong financial performance, with PBT reaching Rs. 120.8 billion, reinforcing its position as one of the most profitable single entities in the country. Beyond profitability, the Bank made a substantial contribution to the national economy, remitting approximately Rs. 77 billion in taxes underscoring its vital role in supporting fiscal stability and national development.

Business

Govt. assures policy consistency in energy sector

Published

15 hours ago

2026/04/23

Sahan Weerasooriya

Minister Anura Karunathilake assumes duties.

Despite a reshuffle at the helm of energy sector, the government has moved swiftly to reassure markets, investors, and industry stakeholders that policy continuity—not disruption—will define the road ahead.

Newly appointed Power and Energy Minister Anura Karunathilake, assuming duties at a moment of heightened scrutiny, made it clear that the administration’s core commitment remains unchanged: uninterrupted supply of electricity and fuel, regardless of political transitions.

His remarks come at a critical juncture for the country’s energy economy—still recovering from past volatility, navigating global price pressures, and attempting to build investor confidence in long-term infrastructure and generation projects.

Addressing journalists following his appointment, Karunathilake struck a notably measured tone, signaling stability rather than reformist disruption.

“The national energy policy is anchored in long-term objectives. There is no shift in direction,” he said, in what analysts interpret as a deliberate message to both domestic and foreign investors wary of policy reversals.

Energy economists note that Sri Lanka’s power and fuel sectors remain deeply sensitive to political signals. Even minor uncertainty can ripple through procurement cycles, independent power producer (IPP) negotiations, and fuel hedging strategies.

By emphasizing continuity, the government appears intent on avoiding the stop-start policy cycles that have historically plagued the sector.

The transition follows the resignation of former Minister Eng. Kumara Jayakody and Ministry Secretary Prof. Udayanga Hemapala on April 17, a move widely viewed as an attempt to ensure the independence of an ongoing Presidential Commission probing coal procurement processes.

From a governance perspective, the resignations may serve to reinforce institutional credibility—particularly at a time when transparency in energy procurement is under intense public and political scrutiny.

Karunathilake acknowledged opposition criticism regarding transparency but responded with a firm challenge: present concrete evidence to investigative authorities rather than litigating issues through media narratives.

Perhaps the most market-sensitive assurance came in the Minister’s outright rejection of imminent power cuts.

Energy supply stability remains a cornerstone of economic recovery. From export manufacturing to tourism and digital services, uninterrupted electricity is non-negotiable.

Karunathilake indicated that groundwork laid by his predecessors—including generation planning and fuel supply arrangements—has already mitigated immediate risks.

“If those plans are implemented effectively, there will be no need for power cuts,” he said, positioning his role as one of policy support and execution oversight rather than structural overhaul.

Industry observers point out that this continuity is crucial. Any disruption in electricity supply could directly impact industrial output, SME operations, and investor sentiment—particularly as Sri Lanka courts foreign direct investment in energy-intensive sectors.

On the fuel front, the minister acknowledged the reality that global price movements—exacerbated by geopolitical tensions in the Middle East—remain beyond Sri Lanka’s control.

For businesses, especially logistics operators, fisheries, and agriculture, fuel price predictability is as critical as supply continuity. Sudden spikes can erode margins and disrupt planning cycles.

Karunathilake’s assurance that supply will remain uninterrupted, regardless of external shocks, is therefore likely to be welcomed by key economic sectors.

By Ifham Nizam