BOC ready for challenges - Ratwatte | Daily News

BOC ready for challenges - Ratwatte

Posts Rs. 16.5 bn for third quarter despite C-19 pandemic

The Bank of Ceylon despite the COVID-19 pandemic is more than resilient and is ready to face any challenges in the future, said BOC Chairman Kanchana Ratwatte.

In an interview with ‘Daily News Business’ he said that even during the pandemic the bank achieved several financial milestones and surpassed all the targets that were set up in the previous year. “We made a profit of Rs. 16.5 billion in the third quarter despite all odds and this trend is expected to continue in the future as well. We also received USD 2.5 billion in Foreign Remittances which is over and above the 2019 figure.”

Bank of Ceylon successfully raised Rs. 10 billion through the issuance of Basel III Compliant, Unlisted, Rated, Unsecured, Subordinated, Perpetual, Additional Tier 1 (AT1) Capital bonds with non-viability full and permanent write down at an issue price of Rs. 100 each on December 1, 2020. The initial issue of Rs. 3 billion was oversubscribed by more than three times on its opening day and the bank decided to close it on the same day. “With well over Rs. 2 trillion in assets, BOC is the owner of the highest asset base owned by a single business entity of Sri Lankan origin and we are also the biggest commercial institution in Sri Lanka that has the largest footprint.”

The Bank also reached a significant landmark on the very beginning of the New Year by expanding its overall branch and digital banking network up to 2000 touch points by this day.

He said that most of the senior management moved from their comfort zones and went out of Colombo to speak to our regional managers and even Entrepreneurs and explained matters to them.

The Trade Unions too were very supportive in this regard and giving a helping hand to us which was very pleasing. He however said that there were numerous stories spread by ‘vested parties’ to demean these achievements but the bank is not deterred by them as the Bank of Ceylon in any kind of financial difficulty.

There was also an international rating downgrade but despite this the bank’s balance sheet was not affected, borrowing capacity was the same level and it did not deter the bank’s progress. He however said that interest rates may be higher when they try to borrow internationally. They will try to plug the interest rates to these ratings.

He said that there are many positive steps including the opening up of tourism which will help the economy in a positive manner. Commenting on the recent past he said that when the new Board took over early last year the economy was not in an impressive state despite not having any negative impact from c-19 first wave.

Entrepreneurs were struggling due to heavy interest rates in the double digit at around 15 to 16%. “We met one customer from Kurunegala who said he had taken a loan from a private bank at a 19% interest rate.”

In addition there was a 15% VAT component plus withholding tax plus NBT and several other taxes which had a severe negative impact on enterprises.

The new government observing this intervened and firstly reduced the VAT component from 15% to 8% and removed several other taxes. “The Central Bank then introduced a Moratorium package and offered the ‘Saubgya’ loan scheme at 4% interest rate.

“The government did all this not because the enterprises were facing difficulties and not because of the first covid wave. Due to these incentives many enterprises recovered and are back in business stronger than they were before.” Continuing its heavy focus on entrepreneurial and economic development island-wide, BOC too led the way in CBSL’s ‘Saubagya COVID-19 Working Capital Loan scheme, by being set to single handedly disburse Rs.50 billion of the allocated total of Rs. 150 billion by CBSL. A sum of Rs. 34.6 billion has already been fully disbursed by the bank, which is almost to 83% of the total number of loans BOC has successfully registered with CBSL. (As at October)

For BOC, this represents a continuation of their renewed focus on Micro and SME development island wide plus financial literacy and awareness in rural areas, through their industry-reputed ‘Divi Udana’ development loan scheme. Running parallel to CBSL’s ‘Saubagya COVID-19 Working Capital Loan’ scheme, BOC’s ‘Divi Udana’ scheme continues to support the government’s social and economic development goals, with emphasis on sectors that have been particularly affected by the COVID-19 pandemic.

A considerable number of loans have been granted under BOC’s ‘Divi Udana’ development program so far, across sectors including agriculture and trading as well as service-oriented areas such as IT.

“These initiatives place BOC in a stronger position to create lasting economic and social value across the country while furthering its reputation as the pioneer in national economic development. We are ready to reach out more to help the government and entrepreneurs as and when required.” He said that the moratoria package would be extended up to March.

Commenting on the digital banking drive he said that more people started embracing it mainly due to lock downs and also initiatives taken by the bank. “We will invest more in this area in 2021 in this segment.”

Asked to comment on overseas operations he said that they are in Maldives, Chennai and Seychelles and all these are ‘making money’ for the bank. “We have plans to open in Bangalore and have currently put it on hold due to the pandemic.” He said in a bid to increase the unbanked population the bank would introduce several new features and would also launch ‘Agency Banking through a ‘retail banking network’ operation. He said that they will also increase awareness overseas to woo more Sri Lankans to remit through legal channels. This is due to lack of knowledge. Now the government has also taken another step in the right direction by offering Rs. 2 additionally to a US dollar and this is a very good initiative.”BoC Group financials reported a pretax profit of Rs. 15,484 million for the nine months ended 30 September 2020