My Report

At the moment, there are no entries available for display


Management discussion and analysis

Prudent growth

Growing the business astutely with a long-term perspective

In the dynamic landscape of banking, prudent growth demands a delicate balance: leveraging strengths, capitalising on select opportunities, risk management and mitigating the impact of threats. The year under review had its share of the challenges, mostly flowing from the immediately preceding year(s), as detailed in Operating Context and Outlook on pages 48 to 53. Sovereign rating downgrade, managing NPCF and loan book expansion stood out as key challenges.

Nevertheless, as the leading private sector bank in Sri Lanka, serving over four million customers, Commercial Bank remained committed to meticulous governance and robust capitalisation. Prudent Growth, ensuring stakeholder value creation across short, medium and long term, remained central, with a continued focus on operational agility, innovation, workforce evolution, risk management and exemplary governance for driving growth.

Safeguarding stakeholders against internal and external stresses is integral to prudent growth. The following narrative highlights how the banking ecosystem navigated this growth, emphasising holistic sustainability as a guiding principle amid disruptive times. Prudent growth extends beyond the broader vision, encapsulating the meticulous details in the Bank's operations to ensure stakeholder protection. This methodical approach establishes a benchmark for the Bank's functioning, emphasising safety and sustainability as core strengths amid times of disruption.

Furthermore, the Bank remained committed to being well-capitalised and liquid, adhering to sound capital and liquidity requirements. This commitment not only strengthened the Bank's financial position but also enhanced its ability to withstand economic shocks and uncertainties.

Adopting a well-diversified approach, the Bank minimised concentration risks across various parameters, including geography, customers, products, sectors and currencies. This strategic action further contributed to the Bank's long-term viability by reducing vulnerabilities to specific market conditions or events.

Creating long-term value

The Bank is poised to confront the hurdles facing the banking sector and contribute to the economic stability. Commercial Bank is renowned for its commitment to sustainable value generation for all involved. With a robust local presence and a regional influence, it holds substantial financial leverage, impacting various domains and engaging diverse stakeholders. The Bank's cautious approach to risk has been a cornerstone of stability, earning the trust of a strong base of stakeholders who rely on its diverse range of financial offerings to create value.

Our commitment to prudent growth

Figure – 15

  • Diversification of operations
  • Prudent Capital Management
  • Liquidity Management
  • Optimising financial resources
  • Prudent impairment provisioning
  • Leveraging data analytics and predictive capabilities
  • Robust Governance and Risk Management framework
  • Compliance with laws and regulations (both in letter and in spirit)
  • Products and services to cater to the green financing activities
  • Social and Environmental Management System (SEMS)
  • First private sector bank to venture overseas
  • First private sector bank to cross Rs. 2.5 Tn. in assets and Rs. 2.0 Tn. deposits
  • Comfortable level of liquidity
  • Highest market capitalisation in the Banking sector
  • Impaired Loans (Stage 3) Ratio 5.85%
  • Stage 3 provision coverage at 43.22%
  • Recognising growth opportunities
  • Conservative risk profile
  • Transparency in reporting and disclosures
  • 1st Sri Lankan Bank to have a Green Financing Taxonomy
  • 1st Bank to introduce SEMS

The Bank's robust market share in exports, successful worker remittances business, industry best CASA ratio and well-established overseas operations, particularly in Bangladesh and the Maldives, have fortified its resilience. Its sterling reputation both internationally and domestically expedites its operations across borders. Moreover, its comprehensive governance and risk management frameworks ensure comprehensive coverage and readiness to manage risks and seize opportunities, driving sustainable financial performance. The loyalty of its multi-generational customer base positions the Bank as a leader across retail, corporate and SME banking segments, fostering a responsible approach to managing its loans and advances portfolio. With a dynamic and highly skilled team, the Bank is primed to tackle challenges and foster enduring relationships, offering practical solutions to its customers' needs.

In 2023, despite the significant appreciation of the Sri Lankan Rupee by 13.18% during the year, the Bank witnessed a 8.92% increase in its deposit base to Rs. 2.085 Tn. and a CASA ratio of 39.23% while its gross loans and advances grew by 3.76% to Rs. 1.266 Tn. by year-end.

Growth in the deposit base and the lending portfolio over the past decade

Table - 08
Rs. Tn.
Rs. Tn.
CAGR (%)
Deposit base 2.085 0.451 16.54
Gross loans and advances 1.266 0.435 11.27

A diversified Bank

Diversification was evident in regional geography, customer profile, banking channels, products and services repertoire and the currency mix of the Bank, among other factors. This commitment to diversification serves as a risk management tool allowing us to navigate volatile market conditions and remain agile in an ever-changing financial landscape. The Bank’s diversity can be highlighted by the following parameters.

  • Geographically: The Bank operates in Sri Lanka, Bangladesh, The Maldives, Myanmar and has placed several Business Promotion Offices (BPOs) across the Middle East and Korea (Refer Figure 03)
  • Customer Profile (Refer customer segmentation – Table 09)
  • Diverse Banking Channels (Refer channel mix – Table 10)
  • Products portfolio [Refer Notes 33.1 (a) and 45.1 (a)]
  • Currency-wise Product Mix [Refer Notes 33.1 (b) and 45.1 (b)]
  • Varied Funding channels (Refer Graph 05 and funding diversification by product refer Graph 06)
  • Maturity Profile (Refer Note 60 to the Financial Statements)
  • Economic Sectors [Refer Note 33.1 (c) to the Financial Statements]
  • Sources of Revenue (Refer Notes 13.1 and 14.1 to the Financial Statements)

Staying well capitalised

The Bank's sustainability relies heavily on a sturdy capital base, acting as a safeguard against unforeseen losses and as a regulatory check on unjustified asset expansion. A key driver of the Bank’s success is its dependable shareholder base, which consistently provides additional capital when needed. Securing capital is crucial for banks to establish, sustain and grow their operations. Tightened regulatory requirements and stricter reporting standards have been imposed to ensure adequate capitalisation, benefitting various stakeholders, particularly depositors.

Despite the lacklustre growth in loans and advances and hence, limited growth in risk weighted assets during the year, substantial impairment provisions made on investments in Sri Lanka Sovereign Bonds denominated in US Dollar exerted pressure on capital of the Bank. Raising capital remained challenging, particularly during the early part of the year under review. Nevertheless, the Bank raised Rs. 12 Bn. at rates varying from 13.50% to 15.00% for tenures of 5 years, 7 years and 10 years in Tier II capital in December 2023 to meet the capital requirements arising from credit growth in the fourth quarter and to create leeway for leveraging envisaged credit growth in the ensuing year.

To evaluate its capital needs, the Bank employs the Internal Capital Adequacy Assessment Process (ICAAP), annual strategic planning exercises and Risk-Adjusted Return on Capital (RAROC). It also practices prudent capital allocation, controlled growth in risk-weighted assets, expansion of fee-based services, timely asset and liability pricing and maintains a diversified portfolio of products and services. Through these practices, the Bank consistently maintains its capital adequacy ratios at required levels.

We are also of the view that in the absence of further significant increase in the impairment provisions moving forward and the stabilisation of the Sri Lankan economy, retained earnings could provide reasonable comfort to the Tier 1 capital. However, if the credit demand is going to be at a significant level, the conversion of zero risk weighted assets to risk weighted assets can exert some pressure on the Tier 1.

Optimising financial resources

Criticality of prudent asset and liability management, strong risk oversight, sustainable growth in assets and liabilities, regular stress testing and establishing essential buffers for unforeseen future challenges to ensure stability and prudent expansion cannot be overemphasised.

Serving as the Bank’s balance sheet manager, the Treasury Division plays a pivotal role in shaping the Bank's financial well-being. In addition to optimising financial assets and proficiently handling financial risks, the Treasury’s strategic significance in bolstering operations has been heightened to facilitate the Bank’s attainment of prudent expansion.

The unprecedented economic challenges, mostly flowing from immediately preceding years, including elevated interest rates, inflation, devaluation of the Sri Lankan Rupee, sovereign rating downgrade, sovereign debt default, unsustainable sovereign debt levels and contraction of economic growth have presented formidable challenges that resonate deeply within the Banking sector. Nevertheless, rigorous risk management practices, prudent investment decisions and a proactive stance in the face of uncertainties have been instrumental in steering the Bank through the dynamic and evolving economic landscape and maintaining the financial resilience.

The specific challenges arising from sovereign debt restructuring and domestic debt optimisation initiatives have been met with adaptability and strategic foresight. The Treasury Division has diligently managed its position amidst evolving debt dynamics, ensuring that the impact on the Bank is thoroughly assessed and mitigated. In anticipation of possible haircuts initiated by the government, the Treasury Division has prudently taken action to create provisions for potential reductions in the value of sovereign bonds. Recognising the dynamic nature of economic conditions, the division has assessed and adapted its strategies to meet possible haircuts while ensuring the Bank's financial health remains robust. The Treasury Division acknowledges that the ramifications of sovereign debt restructuring will continue to unfold, but it remains agile and ready to meet the challenges with resilience and strategic acumen.

Regulatory developments, fiscal and monetary policy shifts and unorthodox competition from Primary Dealer and FinTech firms, digital transformation and emerging customer needs are anticipated factors that may reshape the financial landscape. The ongoing commitment to sustainability is another factor that will influence the Treasury Division's operations. Collaborative efforts in co-creation, enhancing user experience and embracing a digital culture are integral components of the division's strategy. As the Banking industry witnesses transformative shifts, the Treasury Division is well-prepared to meet these changes head-on, focusing on innovation, efficient digitalisation and strategic collaborations to create enduring value. A noteworthy milestone in the adoption of advanced technology is the introduction of a state-of-the-art treasury software system, developed in collaboration with the esteemed international software service provider, Quantum. This innovative solution, currently undergoing rigorous testing, signifies a critical leap forward in enhancing efficiency and responsiveness. Similarly, the implementation of the Treasury FX Portal, a real-time rate request web interface, has proven instrumental in reducing turnaround times for FX rate requisitions.

To navigate this challenging landscape, the Treasury implemented such initiatives as adopting a focused approach to win over new clients, restructured the FIS portfolio and placed under active portfolio management, targeted remittances from identified key markets, talent acquisition and development to improve client services, engaging in derivative transactions and organised client awareness sessions. Efforts were made to strengthen client relationships by enhancing the client value proposition, offering structured solutions and assigning dedicated Treasury Relationship Managers. Looking ahead, plans involve launch of the new treasury system, developing research and analytical capabilities, positioning the balance sheet to sustain market shocks, customised FX portal for augmenting customer experience, broad basing the skills set and exploring opportunities for diversification in terms of business, products and location such as targeting to cater to white-collar professionals by offering them investment opportunities, encompassing instruments like government securities, stock market investments and real estate ventures.




The outcome of the multi-faceted diversification of the Bank has been positive and impactful. It has served as a risk management tool to successfully minimise concentration risks, contributed to the Bank's long-term viability by reducing vulnerabilities to specific market conditions or events and helped the Bank navigate volatile market conditions and remain agile in an ever-changing financial landscape. The diversification strategy has strengthened the Bank's financial position, enhanced its ability to withstand economic shocks and uncertainties and positioned it for sustained growth and value creation.

Compound Annual Growth Rate (CAGR)

Prudent impairment provisioning

The Bank has been cautious in its approach to impairment provisioning, ensuring that it recognises sufficient provisions and identifies declines in asset quality, in both loans and advances and investments, in a timely manner. Provisions for impairment are made prudently through regular reviews of the individually significant loans and advances, assessing future cash flows and borrower financial situations and determining the net realisable value of collateral. Such assessments are independently reviewed and challenged by the Integrated Risk Management Department to enhance the accuracy of provisions. Management overlays too are applied to take into account economic conditions and forward-looking information to account for current and anticipated external factors. Moreover, additional provisions are applied to loans in high-risk sectors and those under moratoriums, factoring in probability of default and loss given default to address unforeseen events. These careful measures ensure that the Bank appropriately addresses potential credit impairments. Consequently, Impairment (Stage 3) to Stage 3 Loans Ratio (Stage 3 Impairment Coverage Ratio) improved to 43.22% as at end 2023 from 39.60% in 2022.

Leveraging data analytics and predictive capabilities

The Bank leverages data analytics and predictive capabilities for growth by utilising advanced technologies such as machine learning and artificial intelligence. It has implemented machine learning predictive analysis models to identify and target potential borrowers for cross-selling and up-selling opportunities. These models analyse transaction data, sentiment analysis and macroeconomic data to predict customer behaviour and needs. By harnessing the power of data analytics, the Bank can make more informed decisions, enhance customer experience and improve operational efficiency. Additionally, it uses data analytics to assess risk, pricing loans and automate impairment assessments, ensuring accuracy and objectivity. Overall, data analytics and predictive capabilities enable the Bank to identify growth opportunities, optimise lending strategies and drive business growth.

Cost Optimisation Committee

In July 2023, the Bank established a Cost Optimisation Committee aimed at reducing expenses and improving the overall cost structure. This Committee convenes monthly to make recommendations for the Executive Strategy Development Committee. Numerous initiatives identified by the Committee are currently underway across the Bank. With a focus on finalising the budgeted capital and operating expenditures for 2024, the Committee has placed particular emphasis on this task. Additionally, to enhance the scope of its operations, the Bank is in the process of establishing a dedicated Cost Management Unit.

Capital management objectives

The Bank places utmost importance on capital management, ensuring availability of sufficient capital at all times through its ICAAP, with the following objectives:

  • Maintaining compliance with industry standards while targeting a more stringent internal capital adequacy level above the minimum regulatory requirements in order to remain well capitalised
  • Ensuring efficient capital allocation for optimum risk adjusted returns
  • Maximising profitability by utilising capital optimally
  • Facilitating wealth creation and business expansion
  • Maintaining a credit rating that surpasses the industry peers

For more information on Bank’s Capital Management, please refer Risk Governance and Management section, Note 66.5 to the Financial Statements, Annex 2, Disclosure 7 on Summary discussion on adequacy/meeting current and future capital requirements.

Managing funding and liquidity

The Bank has established a robust liquidity foundation to withstand ad hoc, acute and unforeseen shocks, aligning with Basel III regulations which introduced Liquidity Coverage Ratio (LCR, 2015) and Net Stable Funding Ratio (NSFR, 2019) as regulatory benchmarks. The Bank's steadfast commitment to maintaining its liquidity status has bolstered stakeholders' confidence in its reliability. The Bank's Asset Liability Committee (ALCO) convenes regularly, at least fortnightly, to ensure that funding and liquidity align with the Bank's overarching commitments to stakeholders. ALCO actively assesses market liquidity, foreign currency funding positions, prevailing and anticipated interest rates, changes in policy rates, credit growth and alternative investment opportunities for surplus funds, especially given the modest growth in loans and advances.

With the gradual deceleration of inflation and the Central Bank beginning its monetary policy easing cycle in mid 2023, market interest rates declined significantly. This coupled with the improvements observed in the external sector gradually eased the difficulties encountered by the banking industry in managing funding and liquidity in both rupee and foreign currencies. In fact, the Bank had a comfortable level of liquidity throughout the year, thanks to the Bank’s solid deposit franchise and as a result of stagnation of credit extended to the private sector, with the Bank having to make short term investments in government securities and invest in bank deposits. The gradual normalisation of market lending interest rates and improving investor and business sentiments are expected to support the expansion of credit to the private sector, as witnessed in the latter part of the year.

The Bank’s funding sources for onward lending, in order of their assessed stability include:

  • Retail deposits mobilised through the branch network
  • Low-cost foreign currency borrowing (provided the interest and swap cost attached to such borrowing is cheaper as compared to the cost of wholesale deposits)
  • Selected long-term wholesale deposits
  • Re-purchase agreements
  • Subordinated debentures

The Bank's Investment Banking Division remained committed to sustainability, integrating Environmental, Social and Governance (ESG) considerations alongside traditional investment practices to enhance long-term performance. Despite experiencing a period of relative inactivity in 2023, the division successfully managed a Rs. 12 Bn. debenture issue. This initiative bolstered the Bank’s Tier II capital base, addressed maturity mismatches in its asset-liability profile and secured funds to expand lending activities, particularly in the SME sector and export-oriented industries, to support national economic growth. The debenture issue which was closed within hours of opening after it was oversubscribed on the opening day reflects the investor confidence in the Bank, amid the challenging operating environment.

Funding and liquidity management objectives

The overarching objectives of the Bank’s funding and liquidity profile management include the following:

  • Honouring the stakeholders’ varied transactions with the Bank, including deposit withdrawals upon maturity and numerous cash commitments, both during normal operations and periods of financial strain or economic adversity.
  • Ensuring compliance with regulatory and reporting standards, setting internal funding and liquidity targets higher than prescribed thresholds, thus establishing stricter internal standards.
  • Maximising profitability by effectively utilising liquid assets, both for immediate needs and through prudent long-term planning.
  • Funding future business expansion at optimum cost.
  • Supporting the desired credit rating.
  • Complying with Basel III regulatory requirements concerning funding and liquidity Refer Annex 2, Basel III – Disclosures under Pillar III.

Anti-Money Laundering (AML)

The Bank conducts risk assessments for Money Laundering and Terrorist Financing to safeguard its reputation from involvement in illegal activities. These assessments, carried out in accordance with regulatory directives and internal protocols, occur during customer onboarding and at regular intervals thereafter, utilising algorithms within the computer systems to gauge risk levels. The AML/Compliance Department regularly communicates its findings and observations to the Board through the BIRMC, alongside monthly statutory reports submitted to the Financial Intelligence Unit of the CBSL.

Anti-bribery and anti-corruption

The Bank's Anti-Bribery and Anti-Corruption Policy is employed to eradicate criminal activities and uphold ethical standards. Aligned with the 10 principles of the UNGC and emphasising the importance of the Code of Ethics, the Bank requires all employees to adhere to the highest levels of ethical behaviour. It maintains a zero-tolerance stance towards abuse of power, solicitation or acceptance of bribes, any form of corruption and other unlawful behaviours that tarnish the integrity of the banking culture. Additionally, the Bank ensures that all contractors, vendors, suppliers, service providers, consultants and representatives adhere to ethical standards. The Bank follows guidelines outlined in the Whistleblowers Charter, addressing issues such as accepting or offering illegal gratifications, financial transactions, favouritism and conflicts of interest. The Board-approved Anti-Bribery and Anti-Corruption Policy can be accessed on the Bank’s website via the following QR code.

Ethics and conduct

The Bank upholds a strong commitment to ethics and conduct standards, both as mandated by regulatory compliance and as part of its proactive ethical approach. It strives to maintain the highest ethical standards and acts as a virtuous exemplar in its conduct. Embracing a zero-tolerance stance towards bribery, corruption, fraud, money laundering and other unethical behaviours, the Bank’s conduct is regularly audited by the Inspection Department of the Bank to ensure adherence to best practices and eliminate any wrongdoing. The Bank reinforces its code of ethics with an active whistleblower policy, encouraging the reporting of unethical practices such as corruption, fraud and misappropriations to the Compliance Officer, thus safeguarding the Bank’s integrity.


Conduct Risk Management Policy Framework

The Bank has implemented a Group Conduct Risk Management Policy Framework to bolster risk management and corporate governance. This framework aims to prevent the Bank from engaging in actions detrimental to customers, market stability and effective competition. It seeks to instill a risk-aware culture that addresses misconduct risk and emphasises clear accountability through a preventive approach. This involves implementing proper customer onboarding practices, ensuring transparency in fees and charges and avoiding fraudulent activities, insider trading, improper financial advice, mis-selling of financial products, tax avoidance, collusion with financial markets and inaccurate financial and regulatory disclosures.

Responsible Financing

A cohesive effort

Numerous factors come together in a cohesive effort to establish the Bank as a responsible entity, allowing it to consistently generate and distribute value sustainably. Each functional department plays a crucial role in steering the Bank’s operations towards the creation of sustainable finance, aligning with the diverse financial goals of stakeholders and fostering enduring partnerships. Throughout this journey, the Bank adheres to specific principles and standards outlined in its Sustainability Framework which include;

  • The CBSL Roadmap for Sustainable Finance in Sri Lanka
  • The CBSL Direction on Sustainable Finance Activities
  • Sustainable Banking Principles of Sri Lanka Banks’ Association
  • United Nations (UN) Global Compact Principles
  • UN Sustainable Development Goals

The Bank has aligned its sustainability-related metrics with the CBSL Road Map for Sustainable Finance in Sri Lanka. This Road Map outlines various initiatives across six focal points aimed at promoting sustainable finance practices.

The six focus areas are,

  • Financing Vision 2030
  • ESG integration into financial market
  • Financial inclusion
  • Capacity building
  • International cooperation
  • Measurement and reporting

The Road Map outlines short, medium and long-term economic, social and environmental objectives. To transition Sri Lanka towards a green, inclusive and balanced economy, substantial investments are needed in eight key sectors: agriculture and food, marine resources, education, transport, energy, urban development and physical planning, health and water. The facilitation of financial institutions to create innovative sustainable finance products and services is crucial for implementing Sri Lanka’s sustainable development agenda. This not only presents new business opportunities for financial institutions but also serves as a catalyst for sustainable finance.

Within the six focus areas mentioned above, the Road Map provides specific action plans for financial institutions, leasing companies and capital markets. The Bank has accordingly established key performance indicators (KPIs) for each focus area, assigned responsibilities to relevant departments, identified associated Sustainable Development Goals (SDGs) and monitors progress on a quarterly basis.


In accordance with the aforementioned principles, the Bank strives to make banking accessible and cost-effective while also prioritising environmental preservation and ensuring that no one is excluded from the path towards sustainable long-term goals.

Socially and environmentally sustainable lending and practices

The Bank uses its Social and Environmental Management System (SEMS) to proactively identify and assesses social and environmental risks associated with lending and operations. This empowers the Bank to make informed decisions, avoiding projects with high sustainability risk challenges. By prioritising risk areas, SEMS helps develop strategies to mitigate and manage them. This could involve adopting green technologies, promoting resource efficiency, or setting social safeguards for development projects. Implementing a SEMS demonstrates our commitment to sustainability, fostering trust and positive perception among customers, investors and employees who increasingly value responsible practices. SEMS helps the Bank to comply with national and international regulations increasingly focusing on environmental and social responsibility in the financial sector. Identifying sustainable opportunities enables the Bank to develop innovative financial products and services catering to the growing demand for green finance and socially responsible investments.

Green finance

The Commercial Bank’s dedication to environmental initiatives is articulated in its Sustainability vision, “to be a responsible financial service provider by enabling and empowering people, enterprises and communities, towards environmentally-responsible, socially -inclusive and economically-enriching growth”.

The Bank’s climate strategy involves integrating climate considerations into its primary product and service offerings through a three-pronged approach; Green Financing, Internal capacity building to support Green Financing and supporting clients and customers to reduce their environmental footprint. Accordingly, the Bank has designed tailor made products and services to cater to the green financing activities coming under Green Finance Taxonomy published by the Central Bank. The Bank is engaged in financing a wide array of projects including Renewable energy, smart agriculture, environmentally friendly transport, waste management and resource efficiency and green buildings.

Green Financing goals of the Bank

  1. To be the leading Institute for Green Financing in Sri Lanka

  2. To develop innovative Green Financing solutions and to commit for Green Finance activities up to Rs.50 Bn. by 2030

Contribute towards the fight against climate change thereby supporting the SDGs.

For over five years, the Bank has prioritised Green Finance, even in the absence of strict Green Banking guidelines. It established a green finance taxonomy which describes what activities could be classified and considered as Green. While the Bank’s voluntary measures primarily focused on the climate, the Central Bank’s prescribed system encompasses climate, environment, pollution, ecological changes and social impact, providing a comprehensive approach to green finance taxonomy.

The Bank adopted a Board approved Green Financing Policy during the year which encapsulates the entirety of its green financing processes, functions and initiatives. It outlines the Bank’s commitment to environmental sustainability and its strategies for integrating green principles into its financing activities and processes to ensure alignment of such activities with the Bank’s overall sustainability objectives and governance framework.

The Central Bank has implemented compliance reporting mandates relating to sustainable financing activities for licensed banks, as outlined in the Banking Act Direction No. 05 of 2022. In response, the Bank has established a framework for quarterly reporting to ensure adherence to these requirements.


In 2023, the green finance portfolio recorded a growth of 7.59%, rebounding from a subdued lending period in 2022, primarily attributed to elevated interest rates and the delayed payments from the CEB, particularly impacting lending to the renewable energy sector.

In 2020, Commercial Bank secured a USD 50 Mn. loan from the UK-based CDC Group with the specific aim of boosting the Bank's Green Financing to SMEs, contributing to national climate objectives. Moreover, an internal campaign was launched to encourage staff members to promote green finance solutions to customers actively. The Bank also focused on promoting “Diribala Green Development Loans”, facilitating the installation of rooftop solar panels. Consequently, the Green Financing portfolio of the Bank grew to Rs. 17.727 Bn. during the year, from Rs. 16.476 Bn. a year ago.


Other activities undertaken by the Bank to further support the implementation of sustainable finance activities include;

  • Relaunching the ”Diribala Green Development Loan” product covering a wider range of green activities.
  • Launching of two new Green products catering to individuals via the ”Green Home Loan” and also the SME and Corporate customers through the ”Green Building Loan”.
  • The Bank is in the process of developing a green bond framework.
  • The Bank represented in various forums as a presenter and panelist, where our experience and our sustainability/green journey have been shared with peer banks, others in the finance sector and various other stakeholders.
  • Several staff members directly involved in sustainability initiatives of the Bank are members of the Sri Lanka Banks’ Association’s Sustainable Banking Initiative (SLBA - SBI) which contribute to several national initiatives.
  • As part of continuous capacity development of the staff engaged in sustainable financing activities, the Bank conducted 10 internal training programmes during the year for 1,121 staff members
  • Engaging in collaborative efforts with Green Vendors and service providers to enhance Green practices.

Green financing risks

In addition to conventional and emerging risks associated with other lending activities, green financing encounters specific risks inherent to its products. These include regulatory inconsistencies affecting project feasibility and viability, exposure to natural disasters or environmental challenges for projects focused on environmental sustainability, the influence of community acceptance, stakeholder engagement and social impact on project success and the risk of losing competitiveness due to technological advancements.

Climate Assessment for Financial Institutions (CAFI) tool

The Bank has adopted the Climate Assessment for Financial Institutions (CAFI) tool developed by the International Finance Corporation (IFC), a member of World Bank Group, to measure and report on the GHG emission reduction attributed to the Bank’s Green Financing portfolio. The Bank was honoured with the prestigious Climate Assessment for Financial Institutions (CAFI) award for recording the highest number of climate finance transactions in South Asia in the past two years. This award recognised the Bank's successful completion of the highest number of climate finance transactions in South Asia that met the IFC’s stringent climate eligibility criteria. The CAFI tool was instrumental in assessing climate eligibility and quantifying the climate impact of investments.