Message from the Chairman

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The state-of-the-art core banking system of DFCC Bank opens up immense opportunities to implement highly innovative banking products and processes.

Dear Shareholders,

As 2021 dawned, the overarching objective of DFCC Bank was to energise and accelerate the economic revival of our nation, which had just begun its slow and difficult ascent towards achieving a semblance of normalcy. Though certain key sectors displayed remarkable resilience during the pandemic, many others continued to languish, needing urgent attention.

We were firm in our conviction that our branches held the key to revitalising businesses, rebuilding livelihoods, and renewing hope across the land. This impelled us to focus on rejuvenating our branch network, through which we could channel our resources and expertise, especially towards the MSME sector, which was the worst affected. It was a rewarding experience, as we played a crucial role in their recovery. This period also saw our emergence as one of the largest providers of relief across a number of affected sectors, and rebuilding the nation.

DFCC Bank was able to overcome an exceptionally challenging external environment by undertaking a judicious appraisal of our risk profile, putting in place the required mitigatory measures, and charting our own ambitious course: in keeping with our vision, mission and goals.

As a practice, we carry out risk assessment in the context of the current scenario. A contemporary example is the case of leasing in an environment where no vehicle imports are allowed, where we need to think in terms of the present market; not the past market. This particular situation resulted in our shift to leasing of pre-owned vehicles. We had to be oriented towards the future, and move forward.

We have also broadened our focus towards finding alternative avenues for growing our business, in keeping with the changing business and regulatory climate. This includes concentrating on local businesses in our immediate environment. In this regard, the support we recently received from the US-based Development Finance Corporation (DFC) will enable us to fast-track our programmes to empower SMEs, which are ideally placed to spearhead Sri Lanka’s economic recovery.

The state-of-the-art core banking system of DFCC Bank opens up immense opportunities to implement highly innovative banking products and processes. It can also facilitate the deployment of the latest banking-related advances in Artificial Intelligence, machine learning and advanced analytics. This will assist us in creating improved customer experiences, efficient customer acquisition, higher customer lifetime value, enhanced operational efficiencies, and achieve lower costs. In fact, we intend embedding and implementing such processes across most aspects of our operations. Our core banking system, coupled with our digital-first strategy, gives room for considerable growth potential in the years ahead.

Though we have the latest technology in place, we need to contend with the cultural factor, as most customers still prefer visiting the branches. However, in the case of most SMEs, which happen to comprise our core customer base, the younger generation has taken over, or is assisting in running the business. This generation is extremely tech-savvy, which gives ample space for a highly digitised bank such as ours to grow.

Our governance structures have been assessed by international bodies, who have acknowledged our strengths in this regard. In terms of internal assessment, especially across our branch network, we are making the required changes to ensure adherence to international best practices. In addition, we are strongly committed to making sure that there is no room for any form of corruption or malpractices at DFCC Bank.

Given the unwavering focus of DFCC Bank on sustainability, the relevant strategy and implementation plan has been defined and formulated with inputs from external experts. We view our sustainability strategy from a national perspective. As Phase I, we have formalised and approved the plan, in addition to having all necessary structures in place. Phase II will be the rollout, which will be implemented in stages.

It needs to be emphasised that the principles of sustainability are embedded in our lending portfolio, in keeping with our goal of being a carbon-neutral bank and preferred finance partner for Green Financing. Our commitment in this regard is being institutionalised, as we transition towards achieving “Sustainable Work-life Balance” for our staff by 2030, and even extending this concept to customers and other stakeholders. The Bank’s sustainability activities are envisaged to contribute towards specific Sustainable Development Goals (SDGs), as spelled out by the United Nations.

As we continue strengthening our branch network, Branch Managers have been empowered to go out and seek business from within their respective areas. We have given them the confidence to do so, as they can be sure of our steadfast support. We want our branches to contribute more towards the bottom line, and in terms of creating customer value.

Having commenced operations as a development bank, we have still retained that orientation as part of our ethos. Consequently, we have retained our dual identity both as a development bank, as well as a commercial bank. This gives customers the advantage of being able to obtain start-up funding from us as a development bank, as well as follow-up funding, as a commercial bank. This is our core-competency and competitive advantage.

Due to our strong emphasis on the fundamental principles of banking, carrying out operations, and adherence to best practices in the industry, we are able to withstand any situation or contingency brought on by changes in the economic climate, regulatory environment, or shifts in Government policies. We also remain firmly committed to creating and maximising value for our shareholders and all stakeholders.

In conclusion, I wish to thank our shareholders for their continued support of the Bank and the trust reposed in us. Our financial position remains strong, and I remain optimistic that our resilient character and prudent management practices will help us endure all challenges. We have also retained strong relationships with all our stakeholders.

I would also like to thank the Board of Directors for their guidance, our former CEO Mr Lakshman Silva for his stewardship through turbulent times, as well as our management team and staff members across all levels for their efforts in supporting our customers.

I take this opportunity to welcome Mr Thimal Perera, who has taken over the reins as CEO, and wish him the very best in taking forward DFCC Bank in achieving its ambitious and lofty objectives in the years ahead.

I would also like to express my sincere gratitude to officials of the Central Bank of Sri Lanka and the Ministry of Finance for their unwavering support extended at all times.

Finally, I thank our customers for their continued loyalty, trust, and support of our Bank. We will continue to focus on ensuring that you have our firm backing in all your endeavours in the years ahead.

J Durairatnam

17 February 2022