Combank eyes Africa for overseas expansion
■ „Chairman says overseas expansion and digitisation actively pursued for future growth ■ „Says Rs.100bn earmarked for lending but no demand despite CB rate cuts
Sri Lanka’s largest private lender in terms of assets, Commercial Bank of Ceylon PLC, yesterday said it is looking to further expand its global footprint and is in the midst of exploring the potential of setting up operations in Africa.
Speaking to Mirror Business during a market opening ceremony at the Colombo Stock Exchange (CSE), held to mark the lender’s centenary year, Commercial Bank Chairman Dharma Dheerasinghe said the overseas expansion plan is being actively explored.
“People think it is time for celebration but that is our last priority, the celebration. We don’t want to waste our money on things that are not productive. To move forward, we are looking at overseas expansion. That is one of our strategies. We are exploring some countries in the African region,” Dheerasinghe said.
According to a report by Mckinsey, with Africa being in the midst of a historic acceleration that is lifting millions of people out of poverty, this broader economic progress places the region as the second fastest growing banking market in the world.
The banking revenue pool grew by 11 percent in constant 2017 exchange rates from 2012 to 2017 and the African banking market is to remain a growth leader going forward, growing at a rate of 8.5 percent from 2018 to 2022.
Outside Sri Lanka, Commercial Bank has ventured into four other countries, as of 2020. It has operations established in Bangladesh and the Maldives, whereas in Myanmar it has set up a representative office and a microfinance entity and in Italy it has a fullyowned subsidiary operating under the brand ‘Commex Sri Lanka’ that aims to serve the remittance need of Sri Lankan expatriates in that country.
In addition to the overseas expansion, Dheerasinghe also shared that the bank is looking to further grow in the digitisation space to help improve productivity, efficiency and delivery.
“We are the pioneers in the digital revolution in banks in Sri Lanka and that is our way forward. We are taking some steps in that regard, where we are looking at bringing in new systems as we believe systems have life beyond human beings.
Even as part of governance, we acknowledge the need to further strengthen our stance in this regard,” he said.
Identifying the challenges faced in moving forward, he said the single biggest hurdle faced by them currently is the increase of non-performing assets, which the bank is striving to contain, in an attempt to strengthen its sovereign score.
He also said Commercial Bank has been cautious with its lending and is on the lookout for “good credit”. Having liquidity of Rs.100 billion, which the bank is looking to lend, Dheerasinghe pointed out that there is no demand in the market, despite the interest rate reduction by the Central Bank.