The Bank continued to invest in its customers during the year; providing for their urgent requirements and rescheduling and restructuring facilities to support their business survival. Our staff were diligent and proactive in working with customers affected by the crisis.

On the back of multiple years of challenging conditions beginning in 2019, the year under review brought extraordinary trials for the Country and the entire banking system. However, I am pleased to report that Bank of Ceylon posted a strong performance in 2022 whilst remaining unflinching in its duty to the Country. I am proud of the efforts of our hardworking team at BoC, who responded to a rapidly changing operating environment with dynamism and resolve.

Responding to Challenges

Amidst the Country’s mounting economic crisis, 2022 led to a steady increase in interest rates, which completely changed the picture in the Country and the financial sector. Floating of the exchange rate that occurred towards the end of the first quarter and the announcement of sovereign default in the beginning of the second quarter presented major economic shocks to the economy with ripple effects felt across all industries and throughout the Country. Hyperinflationary pressures coupled with depletion of foreign exchange laid bare and Sri Lanka’s external sector weaknesses, resulting in an energy crisis that sparked socio-political unrest and upheaval.

In this situation, the Bank prioritised business continuity whilst working to stabilise the economy and support crisis-affected businesses and communities. During a difficult year, we took every effort to align our activities with the urgent and long-term needs of our stakeholders. As the market leader in the financial services sector, we also recognise our prime responsibility towards the stability of the financial system. In this regard, we took proactive and prudent measures to ensure the Bank’s stability: strengthening our financial position and balance sheet, instituting stringent controls, increasing oversight, and improving our leadership for managing and mitigating risks.

Fulfilling a Duty towards Our Stakeholders

As a fully state-owned Bank, BoC plays a unique role in the Country and economy. Acknowledging the critical nature of socio-political stability that contributes to business activity; BoC provided essential financing for major state importers, thereby contributing to the smooth flow of essentials such as fuel, gas, and pharmaceuticals.

Despite disruptions, we prioritised business continuity and ensured our extensive branch network and footprint of over 2,100 customer touch points remained open and operational during the Country’s energy crisis; thereby providing vital access to financial services for some of the most remote locations in the Country. During the year, we deployed resources and carried out a number of programmes that facilitated inflow of foreign remittances and export earnings. We appointed a high level committee to manage and allocate FOREX on priority basis, thereby allowing the Bank to provide critical foreign exchange towards the import of essentials.

BoC also focused its support towards sectors of the economy that were hardest hit by the economic crisis; providing concessions and moratoria amounting to an estimated LKR 74.4 billion to crisis-affected businesses mostly in the tourism and hospitality sector that had faced multiple years of setbacks.

In line with a long-term view of supporting and journeying with our customers, BoC chose not to pursue aggressive recovery, litigation, or repossession. Instead, the Bank prioritised sharing of value and benefits with customers: extending concessions and protection from interest rate fluctuations to retail borrowers who were beset by rising inflationary pressures and doubly affected by the economic downturn. The Bank supported 35,291 retail customers in this regard. Similarly, our committed and continued support to customers in the form of business revival and rehabilitation was also expanded in 2022 as we established Business Revival and Rehabilitation Units (BRRUs) at Provincial level in order to meet the requirements of businesses across the Country. BoC’s customers who faced import restrictions, loss of competitiveness, increased cost of capital, and working capital and cash flow issues were supported by the Bank’s BRRUs and dedicated and well-trained teams. During the year, BoC was instrumental in rehabilitating over 30 businesses and contributing to protecting over 2,500 direct and indirect jobs.

As part of our efforts towards financial inclusion and support for underserved sectors of the economy, BoC provided facilities amounting to LKR 52.6 billion at preferential rates to support MSMEs, small businesses, and entrepreneurs, including LKR 4.3 billion in facilities to female-headed and female-owned enterprises.

Progress Against Our Strategy

Responding to the highly uncertain and volatile operating environment, the Bank reoriented its short-term strategy to prioritise strength of the Balance Sheet over growth during the year. In the long term, the Bank’s transformative and forward-looking strategy continues to provide us a competitive edge. Progress towards and alignment with the Bank’s strategic plan is monitored by five management level committees.

Despite a rapidly changing operating environment during the year, we were able to maximise on BoC’s inherent strengths while proactively positioning ourselves for growth and investing in key areas to future-proof the Bank for contraction of the economy and continued stresses expected in the years to come.


The Bank is strengthened by its diverse and expansive base of over 14 million customers. During the year, customer-centricity was evident across the Bank’s business lines as BoC supported customers through the crisis with tailor-made solutions. Expansion of Business Revival activities at the BRRU; provision of moratoria to crisis-affected businesses; extension of support to retail customers; concessionary development lending to MSMEs and underserved groups; concerted support for export-oriented businesses, SMEs, and expatriate Sri Lankans through the BoC Export Circle, SME Circle, and Foreign Circle; pioneering of new and innovative products; and expansion of the Bank’s rural-focused agent banking network – BoC Connect, were all efforts towards better serving our customers. During 2022, we continued to invest in improving the service skills of our team through a variety of training programmes and strengthened our dedicated Customer Experience Unit. The Bank’s ongoing branch rationalisation programme saw opening of a new Branch at Andaulpotha, Badulla District; relocation of 19 branches to enhance customer convenience, and upgrading of 61 branches and off-site Smart Zones during the year.

Digital Excellence

Digitalisation of the Bank’s services, systems, processes, and customer journey is part of BoC’s transformational strategy aimed at future-proofing through digital capability. In 2022, we improved and added features and functionality to a number of BoC’s digital and online banking solutions. In addition, we continued investing in digital infrastructure by strengthening the Bank’s back-end hardware; enhancing cybersecurity measures and infrastructure; and improving internal and external support and service systems. These measures align with increased adoption of digital channels by our customers, 48% of all customer transactions occurred through digital or electronic banking channels in 2022.

Building a High-performing Team

Our employees are at the core of our business model and are an integral part of how we create value. The Bank carried out a comprehensive review of the employee remuneration and benefits programme during the year, in order to ensure competitiveness in line with changes to the operating environment. The Bank’s policies relating to Human Resource Management (HRM) were similarly reviewed and revised. New policies were also introduced during the year to enable the HR function to better focus its employee engagement and employee retention efforts. During the fuel crisis that ensued throughout the year, BoC took steps to support its teams with dedicated transport services, and piloting of Work from Home (WFH) and remote working features. These, coupled with temporary transfers, enabling of flexi-hours, and host of other measures enabled our teams to remain safe, productive, and engaged. Skills development of our employees was another focus area in 2022, with trainings designed to strengthen skills and capabilities in key areas and such as business revival and customer service, alongside continuous professional development and leadership development. The Bank carried out 663 training programmes and invested LKR 73.9 million in employee training and development during the year.

Rewarding Credit Culture and Healthy Credit Portfolio

The Bank continued to invest in its customers during the year; providing for their urgent requirements and rescheduling and restructuring facilities to support their business survival. Our staff were diligent and proactive in working with customers affected by the crisis. In a rapidly changing operating environment, the Bank’s customer awareness programmes helped inform customers of changes, potential for support, and action that needed to be taken. As a result of these concerted efforts at upholding BoC’s rewarding credit culture, the Bank was able to preserve quality of its portfolio, with ratios within the given range.

Stability, Governance, and Sustainable Growth

The strength of BoC’s corporate governance framework and practices played a key role in the resilient performance we delivered in 2022. The Bank prioritised stability of the Balance Sheet and business model to withstand the pressures from a highly challenging year, while also continuing to deliver value to our stakeholders. The Bank’s alignment with National objectives ensured we met the needs of our Country and communities while positioning the Bank to grow alongside Sri Lanka’s recovery in the years to come.

A Resilient Performance

BoC posted a remarkable performance in 2022 despite a challenging operating environment. This is testament to the Bank’s unwavering focus on driving key imperatives, agility in decision-making, and adoption of a relevant and timely strategy. The Bank’s efforts to revive businesses, support affected sectors, and pilot innovative products mitigated the negative effects of a high interest regime that persisted during the year. Total gross loans and advances showed only a marginal growth of LKR 8,110.8 million due to reduction in direct lending to the Government by a considerable amount during the year. Net loans and advances showed a decline of 4%, reflecting the Bank’s prudent approach of making provision for possible credit losses as a part of strengthening the Balance Sheet and safeguarding against potential future shocks. Deposits increased by 16% and accounted for 84% of the Bank's total funding, demonstrating the public's continued trust in Bank of Ceylon’s stability.

The Bank reported a 14% growth in Net Interest Income (NII) during the year, while net fee and commission income also grew by 15%. However, reflecting depressed economic conditions and a high interest rate regime, interest expenses grew by 121%. Similarly, the Bank's impairment charge for loans and investments increased by 99% due to the proactive approach of the Bank by strengthening the Balance sheet, considering the impairment provision under expected credit loss model, together with broad-based deterioration in credit quality as a result of the protracted crises and unprecedented economic pressures facing the Country. The Bank’s Stage 3 ratio of 5.3%, remained in line with industry peers.

The Bank is strengthened by its diverse and expansive base of over 14 million customers. During the year, customer-centricity was evident across the Bank’s business lines as BoC supported customers through the crisis with tailor-made solutions.

The Bank's operating expenses increased by 14% in 2022, driven primarily by increased personnel expenses that reflected our dedication and commitment to supporting our loyal employees during difficult circumstances.

Compared to the year 2021, the Bank’s operating profit before tax on financial services decreased by 19% to LKR 42.3 billion, while Profit Before Tax (PBT) and Profit After Tax (PAT) recorded declines of 28% and 15% respectively. Profits were compromised during the year in order to prioritise national requirements, provide concessions and support to our loyal customers, and make substantial provisions aimed at strengthening the Bank’s Balance Sheet.

The Bank's total assets increased by 14% to LKR 4.3 trillion in 2022, despite lowering credit growth. In response, the Bank focused on strengthening its capital position by increasing internally generated capital and debentures. The Bank was able to maintain its Tier I Capital and Total Capital ratio at 12.4% and 15.4% respectively as of end December 2022, even with an increase in risk weighted assets due to Rupee depreciation, payment of LKR 6.7 billion surcharge tax deducted from retained earnings, and rising Stage 3 loans adversely impacting the Bank’s Capital Adequacy Ratio (CAR).


At the conclusion of this particularly challenging year, the Bank has emerged resilient. However, much more remains to be done in navigating the challenges ahead and charting a course for the Bank. In this regard, my best wishes go out to the new General Manager, Mr Russel Fonseka, and the new Chairman of the Board, Mr Ronald C Perera as they accept the reins of the Bank during this critical juncture. I look forward to their message, which sets out the Bank’s plans and priorities in the year ahead. I am certain their leadership will take Bank of Ceylon from strength to strength in the years to come.

I would like to express my gratitude to all the stakeholders of Bank of Ceylon for their unwavering support during what was an immensely challenging year. BoC’s progress towards achieving its strategic targets, and its resilient performance during the year were made possible by the commitment of our employees including Corporate Management and Executive Management, the loyalty of our customers, and the trust and confidence of our business partners and trade unions.

I extend my sincere appreciation to our Chairman and Board of Directors for their leadership, which has been invaluable in fuelling our efforts during the year. I am also thankful to the Governor of the Central Bank of Sri Lanka, the honourable Minister of Finance, and their officials and staff, whose guidance and oversight were vital during the year. I would also like to appreciate the efforts of the Auditor General and National Audit Office staff, who ensured timely completion of the audit, finalisation of the Financial Statements, and thereby timely publication of this Annual Report.


K E D Sumanasiri
General Manager

13 January 2023