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Tone From the Top

Managing Director/Group Chief Executive Officer's Review

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We have faced a profound crisis with courage, conviction, and resilience, and I remain optimistic about what lies ahead for our Bank.

For nearly two years, we have been maneuvering through an unprecedented global pandemic that has challenged us all, both personally and professionally. Amid this time of turmoil and unpredictability, we improved the financial wellbeing of our customers and communities and strengthened the resilience of our Bank.

We entered 2021 with renewed hope and optimism. Unfortunately, Sri Lanka faced multiple challenges even beyond the COVID-19 pandemic, most significantly, economic concerns fuelled by foreign exchange shortfalls prevalent during 2021, which exerted an adverse impact on the business community and our customers. The Government took proactive measures to curb the spread of the virus while ensuring the revival and long-term stability of the country’s economy. These included the effective vaccination drive supported by efficient COVID-19-related protocols and processes and the efforts to increase value-added exports, boost FDIs, and revive tourism via strategic country positioning.

Delivering for our customers

Despite the challenging operating context, the Bank has delivered a resilient performance, weathering the economic effects of the pandemic, and we have continued to progress and transform. We are proud, in these very difficult times, of having served our customers and the communities in which we operate while going above and beyond to safeguard our employees. Our main focus for the year was to enhance the customer experience across our retail, corporate, and SME segments. We focused on creating end-to-end customer journeys by seamlessly integrating human and digital interactions to get even closer to customers. Our team worked with empathy and understanding, analysing the information shared by customers to better appreciate their goals and challenges to create more personalised products, services, and experiences. We are exceedingly proud of the ways in which our team served with the utmost dedication, putting customers first. Our branches stayed open for business throughout the pandemic to extend an uninterrupted service. The reliability and robustness of our network is exemplified by the high value of cash dispensed through our automated cash dispensing network, comprising automated teller machines (ATMs) and cash recycler machines (CRMs), which exceeded a mammoth Rs. 91 Bn. in December 2021. This emphatically demonstrates the indispensable role we play in the lives of Sri Lankans.

Enhancing the digital experience of customers

The investments we made over the years in building our digital ecosystem provided a strong foundation to meet the increased demand for digital services and become a pioneer in the digital payment space. As per the Bank’s Digital Strategy 2021-2023, we continued to spearhead innovative, convenient and comprehensive digital experiences for our customers by redesigning conventional banking processes as digital processes, integrating with other ecosystems, upgrading internal systems to capitalise on changes in the regulatory environment, developing talent and building partnerships. We continued to deliver compelling, emotive digital propositions to elevate the customer experience in the post-pandemic new normal, offering customers instant gratification, increased convenience, flexibility, and tailored services they seek. Our retail customers were onboarded to our digital platforms, facilitating simplified customer experiences in an environment of the highest security standards.

To facilitate customer migration to digital platforms, we set up Mini Digital Experience Zones, deployed Dedicated Digital Assistants to guide customers in digital migration and set up automated banking centres in the branches. The success of our efforts saw a 35% YoY increase in digital adoption of our existing customer base and a 29% increase in new customer onboarding during the year.

Reimagining customer service using technology, we were the first bank in Sri Lanka to launch Viber banking and WhatsApp banking to enhance customer experience by using new-age communications to offer solutions that are relevant to the times. Whilst continuing our efforts to promote a cashless ecosystem and facilitate digital access, these innovative channels encouraged non-digital customers to embrace digital banking. During the year, several advanced features were added to our groundbreaking digital banking app, Flash Digital Bank Account, and to ComBank Digital to elevate user experience and convenience further. Furthermore, we introduced several automated processes focused on building robust back-end digital processes improvements to enhance customer experience. These included becoming the first bank in Sri Lanka to accept digital signatures from business customers, automating the analysis of CRIB reports, implementing an image-based customer request processing flow, and an ATM reconciliation system, to name a few.

Uplifting the national economy

As a Domestic Systemically Important Bank, we have been a driving force in partnering and cooperating with national economic development efforts, playing a significant role in the post-pandemic recovery process. Our support extended to granting working capital loans and providing concessions to affected sectors, which stretched beyond the mandated debt moratorium measures. In the face of uncertainty, we continued to build on our last year’s momentum and relief program, emerging as the leading lender for COVID-19 relief amongst private sector banks in Sri Lanka whilst initiating two major loan programs for SMEs and Micro enterprises affected by the pandemic. Under the ‘Arunella’ financial support scheme that was launched in 2020, multiple initiatives were implemented to lend support to the SMEs, ranging from relief schemes and special loans schemes to reducing lending rates and offering concessions and more. In 2020 and 2021, we had extended 49,566 moratorium facilities to the tune of Rs. 217 Bn. to affected customers. Furthermore, 25% of the total portfolio of advances that came out of the moratorium were restructured through proactive communications and close monitoring by our staff. We were able to maintain our net non-performing loan ratio at a low level of 1.44%, which reflects the high asset quality maintained by the Bank and the success of the initiatives implemented to support our customers tide over the difficult operating context.

Supporting the SMEs

The SME sector forms the backbone of the Sri Lankan economy, accounting for nearly 80% of all businesses, and is a main source of employment generation accounting for 35% of jobs in the Nation. Recognising the importance of the SMEs, which was one of the hardest hit by the pandemic, we pioneered tailor-made financial solutions to the sector. In recognition of our efforts towards the SME sector, the UK-based Global Business Outlook (GBO) awarded us as the “Best SME Bank” in 2021.

The ComBank Biz Club, which was launched in 2019 to provide SMEs with extensive networking opportunities and other benefits beyond lending, has grown to over 4,800 members, comprising 42% of our SME portfolio. Our SME Banking Transformation operation, which was initiated in 2020, was formalised during the year under review. This includes a new SME architecture in the form of a Centralised Credit Processing Unit (CCPU), which enabled the Bank to become the largest lender to the SME sector across the Banking Industry in 2020. The setting up of the CCPU helped to expedite the service levels and facilitated doorstep-banking services to the SMEs. The SME customer relationships were further strengthened and new relationships were acquired during the year under review through the newly designated SME relationship managers and SME sales staff, who extended a proactive and speedy doorstep banking service to this segment. All our sales staff were empowered to access and upload information to the Bank’s centralised system in real-time reducing the processing time and delivering a seamless service.


The investments we made over the years in building our digital ecosystem provided a strong foundation to meet the increased demand for digital services and become a pioneer in the digital payment space.


Empowering women

Our commitment to women empowerment is evident in our products that support women's health and wellbeing, career advancement, education, access to finance and financial independence. In partnership with the International Finance Corporation (IFC), a strategic initiative was taken to conduct a “Gender Advisory Project”, which is a 360-degree approach to focus on both financial and non-financial aspects to further improve our attention on the needs of female customers. In addition to empowering women at our workplace, we have continued to offer non-financial services, such as conducting programs to enhance the knowledge and financial literacy of women entrepreneurs, and establishing women networks to enable women to excel in their chosen trades. Notably, women make up more than 40% of our Micro customer segment, while close to 50% of the Bank’s SME exposure is in “women-connected” entities.

Advancing sustainability

In a landmark accomplishment during the year, we secured a USD 50 Mn. funding facility from CDC Group, UK’s development finance institution and impact investor, to extend lending to SMEs and support climate projects in Sri Lanka. The investment marks CDC's re-entry into Sri Lanka and its first climate commitment in the island. The investment has strengthened our own Green Financing strategy, supporting Sri Lanka’s commitments under the Paris agreement and contributing to United Nation’s Sustainable Development Goals (SDG) on affordable and clean energy, decent work and economic growth and climate action. Our commitment to sustainable financing is further demonstrated when we pioneered a mandatory social and environmental screening process for our project lending activities, becoming the first bank in Sri Lanka to venture into Green Financing. During the year under review, we disbursed 1,208 green financing loans and leasing facilities, enabling customers to pursue ventures that will aid in the transition to a low-carbon economy. We also revolutionised digital banking by introducing the “Save the Environment” feature in the “Flash” mobile application to measure and offset customer impact on the environment and promote an understanding of the social carbon footprint of consumption. Our position as the pre-eminent bank in climate financing and environmental consciousness in the South Asian region was exemplified when we became one of the top banks – and the only Sri Lankan bank – to win two Climate Assessment for Financial Institutions (CAFI) awards from the IFC. We continued to support our communities in a myriad of ways during the year under review– by donating medical equipment and contributions to the COVID-19 fund, uplifting education and community development, and creating employment opportunities for young entrepreneurs.

Nurturing a winning team

Our staff demonstrated tremendous resilience over the past year, showing that regardless of the circumstances, they will go over and above to support our customers, communities, and one another. Our people and our culture are and will continue to be our biggest competitive advantage. We strive to be a magnet for the best people, those who help our customers with empathy and a deep understanding of their requirements. As the largest private sector bank in the Nation, they impact millions of customers every day and the communities where we all work and live. Our unwavering commitment to diversity and inclusion and career development creates an environment that unleashes innovation and allows our people to perform at their very best in an environment where everyone feels they have an equal opportunity to belong and build a career. During the year, we continued to support our people with new benefits, health and wellness support, and frequent communication to help them manage through this challenging period. We renewed the collective agreement with the Bank’s branch of the Ceylon Bank Employees’ Union (CBEU) effective January 2021 for a further 3-year period which offered increases in salary and a host of other benefits.

A resilient performance

We continued to demonstrate remarkable operating resilience throughout the pandemic through customer focus, digital engagement and operational excellence. Our results reflect our strong ability to maintain healthy and balanced growth in core banking operations to mitigate the impacts of fluctuations in income. Each quarter, we have been maintaining or improving on our key performance ratios to become even more financially stable and better positioned to continue our mission as a systemically important bank.

The profit after tax of the Group swelled by 42.16% YoY to Rs. 24.290 Bn. for the year ended December 31, 2021. This is before providing for the proposed Surcharge Tax, which had not been enacted in Parliament at the time of reporting. The Bank’s Cost to Income Ratio before VAT on Financial Services improved to 31.61% at the end of the year under review from 33.95% in the previous comparable period. Total assets of the Group increased by 12.54% over the year to Rs. 1.983 Tn. and the gross loans and advances of the Group grew by 13.83% to Rs. 1.095 Tn., recording a monthly average growth of Rs. 11 Bn. over the 12 months. A noteworthy achievement of the year under review was the continuous improvement of the Bank’s CASA ratio, which stood at 47.83% in 2021, improving from 42.72% at the end of 2020. The Bank’s Tier 1 Capital Adequacy Ratio (CAR) stood at 11.923% as at end December 2021, and the Total Capital Ratio stood at 15.650%, compared to the revised minimum requirements of 9% and 13% respectively imposed by the regulator consequent to the COVID-19 pandemic. Throughout the financial year 2021, substantial excess liquidity levels were carried with healthy deposit inflows, showcasing the confidence the Bank has built over the years. As a result, our deposits grew by 14.46% during the year and reached Rs. 1.473 Tn. by the year end. However, at the time of writing this review, the banking sector is experiencing a shortage of liquidity in the market, and the comfortable levels of liquidity will help us brace ourselves for the challenges arising therefrom.

Our overseas operations and subsidiaries, especially in Bangladesh and the Maldives, continued to make substantial contributions to the Bank/Group profits. A detailed analysis of our performance is given in the Financial Review .


Our main focus for the year was to enhance the customer experience across our retail, corporate, and SME segments. We focused on creating end-to-end customer journeys by seamlessly integrating human and digital interactions to get even closer to customers.


Future outlook

Looking ahead, we anticipate the inflationary pressure to elevate in 2022. The increase in taxation is expected to challenge the entire banking sector, exerting pressure on the banks’ liquidity positions and capacity to lend due to the resulting reduction in capital adequacy levels. Although we have continued to maintain a capital adequacy ratio exceeding 200 bps above the mandated requirement in the past, maintaining such a buffer will be a challenge going forward. Our liquid asset ratio could be impacted due to the liquidity shortage in the market. Furthermore, we will maintain a cautious approach to new lending opportunities in 2022 given the high inflationary scenario. As we continue to explore diverse opportunities to expand our business both locally and globally, we intend to venture in to fund management operations by establishing a fund management company in the Asia Pacific region in 2022.

Grateful thanks

I wish to close by extending my deep appreciation to our staff across Sri Lanka and other overseas locations for their unwavering dedication, resilience and resolve as they stood by our customers despite the often difficult circumstances. I am grateful for the confidence our customers have shown us as we have continued to stand by them through these challenging times.

The Board has been a tremendous source of support throughout the challenging year and I am grateful for their ongoing engagement, counsel, and support. I extend my sincere appreciation to our Chairman, Justice K Sripavan who will be relinquishing his duties from the Board effective March 1, 2022, under whose visionary leadership the Bank navigated an unprecedented year. I extend my warm wishes to our present Deputy Chairman, Prof A K W Jayawardena who will assume duties as Chairman from March 1, 2022, and Mr Sharhan Muhseen who will assume duties as Deputy Chairman from March 1, 2022. Their leadership and foresight will be a great strength in steering the Bank to greater heights. I also wish to thank the Managing Director and Head of Asia, Mr Srini Nagarajan and the officials of Commonwealth Development Corporation, UK, for their unstinted support.

We have faced a profound crisis with courage, conviction, and resilience, and I remain optimistic about what lies ahead for our Bank.


S Renganathan
Managing Director/Group Chief Executive Officer

Colombo, February 25, 2022