BOC says geared to meet challenges of 2021 with increased focus on digital delivery
■ Assets base grows 17% to Rs. 2.8tn in first nine months of 2020
■ Loan book grows 25% to Rs.1.95tn; deposit base grows 15% to Rs.2.3tn
■ Top line improves 2% to Rs.181.8bn; bottom line impacted by higher impairments
■ Retains top position for inward remittances achieving US$ 2.7bn, up 1.2%
After an extremely challenging 2020 marked by COVID-19 pandemic, Sri Lanka’s State-run banking giant, Bank of Ceylon (BOC), says it is geared to meet challenges of 2021 with an increased focus on digital delivery channels to deliver uninterrupted services and ensuring maximum safety for its customers and staff.
This was conveyed at a press briefing held yesterday at the BOC Head Office with the participation of the bank’s top management.
Despite the challenges, BOC in 2020 retained the top spot for inward remittances by achieving US$ 2.7 billion in 2020, growing 1.2 percent year-on-year (YOY).
As per available data, Sri Lanka received cumulative US$ 6.29 billion inward remittances, recording 3.9 percent YOY growth during the 11-month period up to November last year.
BOC has maintained over 40 percent market share in the segment.
Meanwhile, the bank also revealed that it has disbursed over Rs.39 billion in working capital loans to Covid-19-affected businesses under Central Bank’s ‘Saubagya COVID-19 Renaissance Facility’ to-date.
Further, it has also disbursed Rs.128 billion for development and agriculture sectors, including credit facilities under ‘BOC Divi Udana’ loans scheme.
For the nine months ended September 30, 2020, the bank’s assets base grew by 17 percent YOY to Rs. 2.8 trillion, backed by a 25 percent YOY increase in the loan book amidst socio-economic challenges that prevailed due to the pandemic situation.
The bank’s loan book stood at Rs.1.95 trillion at t he end of September with increased lending to both government and private sectors.
The bank noted that its loan book included lending to major infrastructure development projects initiated by the government, funding requirements for mid-corporates for business expansion, lending to the SME sector, and other priority sectors such as agriculture, fisheries and related industries.
“Term l oans, scheme l oans, personal loans and overdrafts are the key contributors to l oan growth during t he period. The term loan portfolio grew by 28 percent demonstrating the bank’s support in terms of working capital requirements,” it stated.
The bank stressed that it was able to move forward with stable performance by recording a marginal growth of 2 percent YOY in the top line, reaching Rs.181.8 billion for the nine months, despite the challenging situation in the country.
“The non-fund-based income for the period amounted to Rs.12.9 billion showing an increase of Rs.1.7 billion YOY, and an exchange gain of Rs.3.6 billion, which contributed to this growth,” it noted.
However, the bank’s bottom line declined by 14.5 percent YOY recording Rs.11.7 billion in profit-after-tax (PAT) as impairment charges on loans and advances rose by 33.6 percent YOY to Rs. 19.5 billion in the period.
Further, BOC was able to record a 15 percent YOY growth in its deposit base, representing 24 percent of the industry, despite the low interest rate regime.
The bank’s deposit base of Rs.2.3 trillion represented 33 percent of the current and saving deposit (CASA) base, which generates funds at low cost.
During the year, BOC successfully executed the issuance of its first additional tier 1 (AT1) bond of Rs.5 billion, which was followed by Rs.10 billion AT 1 bond issuance in December.
“These bond issuances have resulted in further strengthening the capital base of the bank by providing the required capital base for business expansion,” BOC noted.
At the end of September, the bank’s tier I capital and total capital ratio stood at 10.4 percent and 14 percent respectively, above the regulatory requirement.the bank’s liquidity position reflected in statutory liquid assets remained at a favourable level of 29 percent, above the norm of 20 percent in the period.
In addition, the bank successfully managed to maintain its Fitch local rating at AA+, remaining steady on par with the sovereign ratings.