A look at the expansion of the largest bank in Sri Lanka

The World Bank Group’s latest Global Economic Prospects (GEP) report stated that “South Asia regional GDP growth is expected to remain at just over 7% during 2015, and rise at a moderate pace toward 7.5% in 2017, in line with the on-going recovery in India and stable growth in the rest of the region”. How are the banks in the region a key enabler for Asia’s growing economy?

We do two things; we fund the business sector and also the domestic sector. Most importantly when individuals or companies put away savings into their accounts, it provides the Bank the necessary capital to nourish the regions businesses.

In South Asia, we tend to have a culture of savings and which has traditionally and historically been the fuel to our economic rise. Unfortunately, in the last years the cost of living has gone up, and savings has been hit negatively, which has had a direct impact on business growth or development.

So, one of the key priorities for regional banks and economies has become to reduce inflation and retain that necessary low cost of living, which as a result will enable the individual or the domestic sector to generate further savings as a tool to economic prosperity.

How can Sri Lanka’s banking sector fill some of the gaps in Asia’s financial sector to keep the global economic engines moving smoothly?

This is not just the banking sector, but also the development of the nation as a spender can contribute to economic prosperity. Doubling the per-capita income from USD3,000 to USD7,000 means a lot of money generated in the hands of the people and most of it is funded into the bank, into development, into savings. Inflation and the cost of living have to be held at manageable levels so that there is enough money in our local banks. You must ensure that there is substantial financing going to development, thus the banking sector has to ensure that we have the system and the products necessary for people to really engage and see that their money grows. For example, the cost margin of products can go to a savings account, which takes ten minutes to open, one sheet of paper to fill. And you can access that account from anywhere in the world. This system is online, you can check your balance on your mobile phone, or on your computer. These are new things that we feel the younger generations are attracted to and utilize the most in order to funnel their money. It is  crucial that our banks with government support educate the next generation from very early ages on how to manage their finance.

How is the BOC spearheading the country’s banking sector bringing new innovation and new technological sophistication to the market?

We have hired an American company called Boston Consulting Group, where we are looking at alternative ways to transform and make the bank more competitive. Currently we are the largest bank in Sri Lanka, we have 8,600 employees, 622 branches, over 1 trillion Sri Lankan Ruppes in assets, and being the leading institutions we have a strong responsibility to spearhead our sector by setting certain benchmarks through innovation, technology and human skills development.

We need to inculcate culture of innovation and out of box thinking to bring new ideas to the table. One of the many ways is to invest in correct technology, which will not only help us to retain our number one position but also help the sector to sophisticate further. We are aiming to transform the bank though technology by latest December 2015, with new banking applications which has never been implemented in our Island.

It is pivotal to state, that even though the innovative and new technology will differentiate us from our competitors, it is our human capital that makes all the difference. We are heavily investing to increase the customer satisfaction through employee training programs and providing the correct environment for our workers. 

We are leading the industry, but again, having the best corporate applications in the banking system will not save you, but we are further enhancing customer skill of our stuff to meet future challenges. Technological advancement is good but it needs to be developed in line with customer relations. We are friends, not just bankers.

Please discuss BOC’s role as a beacon of Sri Lanka and its key contribution to the nation’s prosperity.

60% of Sri Lanka population has an account with us, we are the people of Sri Lanka. When we talk about how BOC is performing, it is a good indicator on how our people are doing and how our economy is performing. With our 622 branches we have one of the widest coverages, we are in nearly all villages  across the country, working hand on hand with our people to achieve new heights.

But we do not want to stop there; we are working towards introducing electronic bus cards, just like what you get in London with the Oyster card. We as a bank have the country’s prosperity in mind with every step we take.

After completing the 75th anniversary year with a commendable achievement of Rs. 20.3 billion Profit Before Tax, Bank of Ceylon has reported Rs. 4.4 billion Profit Before Tax for 1Q of 2015 by achieving a 15% growth over 1Q of the previous year. What were the main drivers behind the bank’s strong performance?

PBT has mainly accelerated due to increased net interest income and fee income. The Bank has been able to achieve lower interest expenses through improved CASA mix (Current Account and Savings Account to total deposits) resulting in a 34% increase in net interest income in 2014. Net fee and commission income have also increased by 25% to Rs. 2.1 billion contributing 14% to total operating income.

In view of the promising results and the strong fundamentals, we anticipate that the Bank will be able to sustain the ratings it currently possesses. While we deploy strategies to implement our Corporate Plan for the year 2015 by capturing the growing in credit demand, we will continue to invest in developing the human capital and technological infrastructure to enhance robustness, efficiency and effectiveness in all areas of the Bank

Are there any plans for international expansion?

We have a strong interest in Bangalore, India, for the next branch. The cultural similarities and also the prospect of the economic growth in those states is very appealing for our international reach.

How is Bank of Ceylon utilizing the new era of government’s foreign policy to attract more partnerships and investment?

As the largest bank in Sri Lanka we have strong ties with international investors. By providing services we are the first stop for any organization that wants to setup a financial system in order to expand their business or simply invest in Sri Lanka.

There is a strong competition amongst the banks when it comes to accommodating foreign investors, however at BOC we believe we have a strong positive reserves which helps us to provide back certain guarantees and ensure international organizations choose BOC to do business with.

What is the legacy that you envision for the Bank of Ceylon?

I stress on the staff, because if our personnel is happy and qualified, then I will be happy. I want to raise the bar, increase the job satisfaction levels, and also provide an opportunity for employees to extend their qualifications. If the whole system breaks down, it is our personnel that that will come to rescue, thus my priority is on the people of this bank.