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BOC’s Rs. 3 trillion asset base, a measure of its contribution to economy – CFO

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by Sanath Nanyakkare

Bank of Ceylon’s assets base grew by 24% to LKR 2.9 trillion by end 2020 and at the point of speaking it has surpassed the 3 trillion mark, and the importance of this financial number is that it has an intrinsic value of our customers’ assets and growth potential, Russel Fonseka, Chief Financial Officer (CFO) of Bank of Ceylon said in Colombo yesterday.

“If anything happens to the national economy it reflects on BOC’s balance sheet. You may think why rupees three trillion asset base is so important. Because it does not tell a monetary value only. Anybody can give asset base numbers. But our asset base of LKR 3 trillion has an intrinsic value in the national economy. The total of this asset base may not be within the bank itself. It may be within the business peripheries of our customers; their establishments, stocks. tea factories, tea estates farms, agriculture produce, they are included in this three trillion asset base.

‘This financial number of BOC represents all sectors of the economy. That is why we are proud of the increase of our asset base and that is why I said our asset base reflects on the nation economy and not just ourselves. We will be expanding on this value in the future as well contributing to the national economy in a meaningful way,” he said.

“Although the profit in 2020 was less than in the preceding year, we have made the largest profit in the banking industry this year. Some people say that the bank industry is making high profit. That is not the truth. We have broad based assets compared to other industries. We mange and administer them. What we reap from that business is our profit. We make less than 1% profit – or about 0.87% from each of these assets. There is no other industry operating on such low profit margin. But as the quantity of assets we manage is huge, we can make profit. This is the truth although people criticise us sayong the banks are making a lot of profit,” he said.

Fonseka said so at a media briefing held by the top management of the bank to announce the Bank’s Financials for the year 2020.

BOC chairman Kanchana Ratwatte speaking at the event said that the bank ended a strenuous year with undisputed leadership position, keeping spotlight on economic revival.

“Bank of Ceylon has once again stamped its resilient leadership position by navigating an exhausting year carefully, but with great strength, continuously powering the wheels of the Sri Lankan economy despite Year 2020 was a year of many unforeseen challenges”, Ratwatte said.

BOC General Manager D.P.K. Gunasekera said that the Bank partnered with the Central Bank of Sri Lanka to maintain the dollar-rupee exchange rate with the backing of foreign remittances it received from migrant workers.

Amidst these unexpected challenges, the bank’s operating profit stood at LKR 29 billion and a reported LKR 23.6 billion as Profit before Tax (PBT) for the year 2020, moving forward with stable performance, while managing headwinds caused by low interest rates, cashflow deferments and operational restrictions. Profit After Tax (PAT) for the year ended was LKR 17.8 billion. The bank’s assets base grew by 24% to LKR 2.9 trillion, primarily backed by an increase of 28% in the loan book.

Reaching another milestone, the bank’s loan book crossed the LKR 2.0 trillion mark during the year and closed with LKR 2.1 trillion gross loans and advances to customers. Both government and private sector lending contributed to growth during the year, while working capital and personal lending showed a boost in all segments, including retail and corporate financing.

The bank’s deposit base (more than 23% of the industry) increased during the year despite low interest rates. The bank’s deposit base of LKR 2.5 trillion represents 35% of the current and saving deposit (CASA) base, which generates funds at low cost. During 2020 the bank successfully executed issuance of its first Additional Tier 1 (AT1) bond, generating LKR 15.0 billion ATI capital. The bank’s Tier I Capital and Total Capital ratio stood at 11.2% and 14.9% respectively by end 2020, which were above regulatory norms. Despite cash flow deferments on loan instalments, the bank was able to maintain better trade -off between liquid assets and liabilities. All liquid level monitoring ratios were maintained positively.

 

 



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HNB supports Sri Lanka Welfare Society of Blind Women

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Supporting the livelihoods of visually impaired women, Sri Lanka’s most customer friendly bank HNB PLC donated 300 white canes and dry ration packs to the members of the Sri Lanka Welfare Society of the Blind Women.

The donations made utilizing voluntary contributions gathered by HNB employees, were handed over to members of the Society at a special event at HNB Towers under the patronage of HNB Managing Director and CEO Jonathan Alles.

“HNB is proud to partner with the Sri Lanka Welfare Society of the Blind Women to serve the visually impaired women of the country. Our goal is to do our part in ensuring they are given opportunities, recognition and respect that are equal to every other citizen, and we hope that partnerships of this nature will pave the way for a more inclusive and caring society,” HNB Managing Director and CEO, Jonathan Alles said.

With 252 customer centres across the country, HNB is one of Sri Lanka’s largest, most technologically innovative banks, having won local and global recognition for its efforts to drive forward a new paradigm in digital banking. Over the recent past, the bank was ranked among the World Top 1,000 Banks list compiled by the prestigious UK-based Banker Magazine. HNB has a national rating of AA- (lka) by Fitch Ratings (Lanka) Ltd.

HNB was also declared Best Sub-Custodian Bank in Sri Lanka at the Global Finance Awards 2020, in addition to winning the coveted Best Retail Bank in Sri Lanka Award for the 11th time at the Asian Banker Awards 2020, in recognition of its sustainable growth and continuous improvements in processes, products and services amidst a challenging macroeconomic environment.

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Rizing, LLC acquires attune Lanka from MAS Holdings

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MAS Holdings announced today, that in line with its long-term strategic objectives, it has concluded the acquisition of its subsidiary attune Lanka (Private) Limited by Rizing, LLC. Rizing is a privately held, US-based boutique firm specializing in providing SAP solutions for Consumer Industries, Enterprise Asset Management and Human Capital Management worldwide.

In 2018, MAS Holdings completed an assignment with a leading global consultant to develop a long-term strategic plan, which identified areas of growth based on its core competencies and in the adjacent areas of Femtech and Wearable technology. The divestment of attune was an outcome of this plan, with the intent of finding the right partner for the Company to enable it to scale and grow.

This is a significant investment in a Sri Lankan-owned global technology firm by a company that is backed by a large private equity fund from the US, which will undoubtably help attune to scale and strengthen its business in the years to come.

“The acquisition by Rizing ensured that attune would benefit from Rizing’s global scale and expertise, and that their customers and employees continue to thrive as part of a leading solutions provider in the fashion and consumer industries” stated Mahesh Amalean, Chairman MAS Holdings. He also added that MAS would continue its close partnership with Rizing and attune in terms of the ongoing implementation and support for SAP products and services across MAS SBU’s in Sri Lanka and overseas.

Mike Maiolo, CEO of Rizing stated that “Customers from both organizations benefit from this partnership. Now two of the top SAP partners in Consumer Industries and Fashion are a united force to deliver unmatched value through combined experience, expertise and scale”. A leading provider of systems solutions and implementation services for SAP and with offices in North America, Europe, Asia and Australia, Rizing is headquartered in Stamford, Connecticut, and has been on an aggressive mergers and acquisitions plan since 2018, acquiring several US-based and global firms.

“This merging of Rizing’s and attune’s industry knowledge and experience will provide our long-term valuable clients with access to exciting new technologies and talented resources” said Vajira de Silva, the CEO of attune, adding that “The strength of the combined companies will allow us to grow into new markets and augment our products and services to better address the needs of existing and new clients”. attune Lanka has subsidiaries in India, Australia, China, HK, Italy, Germany, UK, US and Netherlands, with over 500 employees worldwide.

Standard Chartered Bank’s global M&A advisory team acted as the sole advisor to MAS Holdings on this transaction.

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People’s Insurance enters Medical Insurance market with ‘the most comprehensive medical insurance cover available in Sri Lanka’

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In an unprecedented effort to enhance its product offerings to customers across Sri Lanka, People’s Insurance PLC recently announced its plans to diversify into the health insurance space of the country. This strategic move to establish its presence as a health insurance provider builds on the well-established public image of People’s Insurance as the insurer who cares with love.

As the market is already heavily saturated with health insurance products offered by the competition, Peoples Insurance had the strategic objective of offering a product to make them stand out from the rest. Following a customer first approach, the insurer has decided to be a step above its competitors by offering a highly comprehensive medical insurance cover available in the country.

Citizens of Sri Lanka and those individuals who currently reside in the country are eligible to obtain a medical insurance cover from People’s Insurance. Individuals can be covered from their 5th birthday onwards. However, infants from the age of 3 months can also be protected by these covers provided that their parents have a medical cover from People’s Insurance too.

Jeevani Kariyawasam, the Head of Operations at People’s Insurance PLC commented on this new development, “When People’s Insurance PLC began to contemplate our entry into the health insurance sector, we knew we had to be different. As we are known as the only insurer who cares with love, our health insurance product had to reflect this strongly. Due to this, we decided to position ourselves as an insurance provider with a highly comprehensive product in the health insurance space. With affordable premiums, we have made every effort to ensure that Sri Lankans can enjoy the peace of mind that health insurance brings about.”

Medical schemes will vary from Rs. 100,000 to Rs. 2 million and premiums will depend on the sum insured, along with the customer’s age band. It is also noteworthy that the geographical scope of treatment extends beyond Sri Lanka and into India as well. Costs related to ambulance call outs, inpatient proceedings, surgical treatments, pharmaceuticals, diagnostics and pre and post hospitalization expenses are just a few of the areas that this comprehensive product covers.

As People’s Insurance PLC has a trusted and well established name in the minds of Sri Lankan customers, it is expected that their entrance into the medical insurance sector will be welcomed by citizens across the island. With the underlying goal of caring for its customers beyond anything else, this new development will allow for more Sri Lankans access to proper healthcare services. This decision truly resonates with a purpose beyond profit initiative.

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