Immense trust of foreign counterpart banks on Bank of Ceylon

Kanchana Ratwatta, BOC Chairman

The Bank of Ceylon (BOC) is not affected by the downgrading by rating agencies as its foreign counterpart banks have placed immense trust in the bank and in its year-on-year performance, said a senior bank official during a media briefing last week on the bank’s performance in 2020.

“No foreign bank has stopped or limited funding BOC which has a proven track record and a strong balance sheet,” said BOC Chairman, Kanchana Ratwatta.

Fitch Ratings downgraded BOC’s Long Term Foreign and Local Currency Issuer Default local industries and the thousands of hapless employees in the industry. Ratings (IDR) to ‘CCC’, from ‘B-‘ in December last year However, the  banking sector giant ended 2020 which the bank termed as a strenuous year with its undisputed leadership notching the highest industry profit of Rs. 23.6 billion (PBT) and  a triple Rs. 2 trillion Balance Sheet – assets, loans, advances and deposits.

The bank according to senior officials has adopted a host of measures to support the pandemic hit economy which is expected to revive this year.

“We are in the process of launching a venture capital fund which is now at the approval stage to support export oriented and IT start ups,” said BOC General Manager, D. P. K. Gunasekera.

The largest State bank also has set up a business revival unit to revive ailing businesses to get back on its feet and provide direct and indirect employment to youth.

“The bank aims to go beyond recoveries to revival through the enterprise revival strategy,” a senior official of the bank said.

BOC recorded a year-on-year growth in business volumes: assets – 24%, loans – 28% and deposits – 23%.

The bank recorded the highest disbursement under the ‘Saubagya’ Working Capital Loan scheme providing 18,589 facilities to the value of LKR 39.1 billion. Its moratorium facilities were valued at over Rs. 589.4 billion.

“Despite a challenging year we were able to again stamp our resilient leadership position by navigating an exhausting year carefully, but with great strength, continuously powering the wheels of the Sri Lankan economy,” the BOC chief said adding that the role of BOC during the year under discussion in delivering on the benefits of these measures is unmatched and commendable.

While the Bank recorded the highest industry profit in 2020, its continued focus during the year was to ensure the integrity of the country’s banking sector, including payments and settlements, continued without interruption, while aiding the country in its economic revival, through SME and local entrepreneurship development.

The Bank extended support by implementing the CBSL announced moratorium to over 258,000 customers in facilities worth Rs. 589.4 billion. These moratoria were offered under five schemes: Moratorium – tourism sector; Moratorium Covid-19 first wave; Moratorium Covid-19 second wave; Moratorium – credit support to the SME sector; and the extension granted for the Moratorium on the Easter Sunday attacks.

The Bank also granted moratoria to customers who were not covered under the CBSL introduced moratorium by way of the Bank’s own moratorium.

Stretching its hands out to needy customers, the Bank of Ceylon introduced a special loan scheme for businesses affected by the Covid-19 pandemic, with facilities worth Rs. 20.5 billion granted.

While focusing on economic revival, the Bank delivered on its duty in developing a strong national economy by boosting the SME and micro finance sector with disbursements of Rs. 128.9 billion to the sector last year.

The ‘Mithuru’ micro finance program of the Bank also served over 1,083 small groups, with prominence given to the Eastern, North Central and Central provinces.

Total disbursements in the year amounted to Rs. 9.3 billion. BOC ‘Divi Udana’ The Bank also introduced BOC ‘Divi Udana’ loan scheme during the year to revitalise the ailing economy, by way of kick starting SMEs and ensuring their funding needs are met.

The Bank took immediate steps in revising market interest rates to match policy rate reductions and interest rates caps announced by the CBSL, by revising the interest rates down on its loan portfolio. The Bank’s prompt action to revise the pricing of its loan book allowed market rates to ease following the CBSL rate cuts.

The Bank also played an indispensable role in supporting CBSL’s efforts to stabilise the Sri Lankan Rupee and strengthen the external position under difficult economic conditions by way of active participation in the exchange market, facilitating around USD 2.8 billion in inward remittances to the country. The Bank ensured most of its branches were kept open for essential banking activities even during strict lockdowns experienced in the first half of the year.

The Bank also ensured all its digital and virtual channels were up and running for people to serve their banking needs as social distancing limited visiting branches.

With a customer base of over 13 million the bank conducted digital transactions to the value of Rs. 5.2 billion per day during this period.

Ensuring that customers had access to their funds, the bank ensured that over 1,330 ATM, CDM and CRMs in the network, and other customer touch points totalling 2,000 in all, were kept up and running with adequate sanitising, allowing customers to conduct their financial transactions without hindrance.