It is with immense pleasure that I present this report for 2016, in which Bank of Ceylon achieved the significant milestone of the ‘triple trillion’. It has been a year of exceptional achievement during which, we reached our target of rupees one trillion in loans and advances, becoming the first bank in Sri Lanka to achieve the prestigious landmark. Having crossed the trillion rupees milestone for total assets and deposits in the previous years, our untiring team effort enabled us to reach rupees one trillion in advances in 2016, completing the ‘triple trillion’. This achievement was no easy task – it was the result of well planned out strategies and meticulous execution. I sincerely appreciate the efforts put in by my fellow Board members to form the strategies, the perseverance of the corporate management team and the co-operation given by the entire staff of BoC in reaching this significant milestone. It was, indeed, a great team effort by all concerned. Our process of strategising left nothing to chance; we studied the macro environment and the internal strengths and weaknesses in detail and conducted sensitivity analysis coupled with strengthened risk management. Throughout this journey, we have remained focused on touching and improving the lives of people from all walks of life across the country. I believe that taking our enterprise as well as achievements together, we have reaffirmed BoC’s No. 1 position amongst banks in Sri Lanka.
The Bank was incorporated in 1939, mainly to serve the financial requirements of the local business community. Over the many decades since, our scope and ambit widened to encompass the broadest of stakeholders – from the State and the blue chip, large scale entrepreneur through the medium and small scale entrepreneur to the senior citizen, the youth, women, students, expatriate workers and the man on the street from town to grass roots. Today, through a network of over 650 service outlets, we provide premium banking solutions to the people of Sri Lanka, 12 million of whom are our valued customers. In like vein, our overseas branch network and subsidiaries serve the Sri Lankan community overseas including our expatriate workers, who also benefit through our extensive network of correspondent banking relationships.
While we are a commercial organisation, as a state bank, we remain committed to implementing the policy directives of the Government. For example, banking the hitherto unbanked sectors and lending to disadvantaged sections of society. This, in turn, helps us in our efforts in promoting financial inclusion.
Demonstrating Financial Stability and Resilience
The year in review largely reflected political stability in the country. Improved fiscal and monetary policies gave us a stable policy framework, within which, to formulate our strategies. Through the year, the Central Bank of Sri Lanka (CBSL) tightened monetary policy, which led to restricted credit growth. Market liquidity was adversely affected and competition among banks in terms of raising deposits was very high. However, BoC was able to overcome these challenges and continued to forge ahead.
The financial strength of BoC, evident in our Balance Sheet and demonstrated by key performance indicators, is augmented by our state ownership, which engenders significant levels of confidence amongst the public. The resultant confidence factor and financial stability is reflected in our credit rating of AA+ (lka) stable outlook, making us the highest rated commercial bank in the industry.
Our Focus during the Year
During 2016, the Bank’s strategic focus was directed towards improving technology, as well as product offering, whilst building up system capabilities to strengthen internal controls. These measures will, from a product offering perspective for instance, allow us to offer a range of products relevant and appealing to the younger generation and from a management information perspective, help in meeting the prudential regulatory requirements.
Enhancing customer service at branch level was yet another strategic imperative during the year. Given the high level of competition that exists in the industry today, with many players offering similar products, superior customer service can deliver a competitive advantage to the Bank and provide an edge over competition to create and retain loyal customers. Hence, we emphasise on providing a superior customer service at all levels. Our aim is to ensure that every customer who walks into a BoC branch, walks out happy and contented. Customer facing staff has been provided with extensive training in this regard.
As has been our ethos from the inception, intensity of competition does not compromise the Bank’s values in relation to ethics and governance. The Bank maintains the highest professional standards and a culture of compliance and transparency.
Our Strength, Our Team
Our team, the people who constitute the Institution’s workforce, is our most valuable asset. Our permanent workforce, numbering 7,569 in total, 64% of whom are below 35 years of age, are the Brand Ambassadors of BoC. They propel enterprise, give wings to strategy and are our interface with customers. Our human resources policy covers their continuous training and development, providing them local and international training, in order to develop their skills and knowledge and building up the next level of succession. Automation in the area of HR management was another key priority during the year, which improved and streamlined our HRM processes. Our remuneration packages and staff benefits remain competitive and we have taken many initiatives to ensure the work-life balance of staff members. The efforts we have put in are reflected in winning the Best Employer award. Our employee relationships, including the rapport with Trade Unions are cordial and harmonious.
Our Vision for 2017 and Beyond
We will continue to hold true to our reputation as ‘Bankers to the Nation’ by being the premium financial service provider to the country and its people.
We have been the market leader for remittances with a share of 43.5% of the market and a growth rate of 15% which was above the industry average. We will continue to focus on maintaining the market leadership in relation to remittances from expatriate workers, introducing innovative incentives such as the ‘Triple Vasi’ gift scheme.
Our aim is to continuously innovate to offer technologically advanced product offerings and expand our reach through digital channels so as to remain ahead of competition and next generation friendly. Approximately 30% of the country’s population falls into 25-40 years age group, requiring us to increase our technology-based products and channels, which we are prepared to meet with our young and dynamic staff.
With our commitment to enhancing sustainability, we will continue our drive towards green banking initiatives, whilst supporting specific projects that have the welfare of the environment at heart.
Appreciation
I wish to extend my sincere thanks to my fellow Board members for their professionalism and unstinted co-operation in directing this great Institution. A special word of thanks to the General Manager and the management team for their enthusiastic commitment and dedication. I record with deep gratitude and thanks, the confidence and support reposed in the Bank and its management by the Government of Sri Lanka. A special word of thanks to the Ministers and staff of the Ministry of Finance and the Ministry of Public Enterprise Development for their direction and guidance.
A note of appreciation to the Governor and staff of CBSL for their guidance given on the governance of the Bank; to the Auditor General and his staff for expressing their opinion on the Financial Statements included in this report.
A special word of thanks to our loyal customers, for the opportunity given to serve them and for their loyalty. Achievements of this magnitude would not have been feasible if not for the dynamism and commitment exhibited by the entire staff of the Bank. My sincere appreciation to the team and the Trade Unions for their cooperation and support.
I also wish to thank all our other stakeholders for their contribution to the success of the Bank.
I am fully confident that, BoC will achieve even greater heights in the coming years.
Ronald C Perera PC
Chairman
29 March 2017
Colombo