Bank of Ceylon aims Rs. 4 b profit in 2006

by Hiran H. Senewiratne

Bank of Ceylon will not be privatized under any circumstances, said Chairman of the BoC Udayasiri Kariyawasam.

He said that Bank is one of the leading state banks in the country and the Bank was making profits without any problem and assured that it is not the under the government's privatization list.

He said that they are seeking legal advise over defaulters.

I have submitted a report to the Minister of National Bank Development Wijedasa Rajapakse in this regard. He is personally handling the matter.

We will take legal action without any discrimination on our non-performing loans. Upto 3 September 2005 our non-performing loans have reached 13500 million.

Bank's non-performing ration is 1.72 per cent.

We have launched a loan recovery program known as "Naya Gevamu" which will be launched in the future. However defaulters too can take benefit from a programme by expressing their grievances. This grace period for defaulted debts would be from January to March 2006. Following is excerpts from the interview.

Question: Last year the Bank performed well. Are you confident to achieve that trend in the coming year?

Answer: This year also we are optimistic and our development performance is also good. We are sensitive to market changes, we are proactive and we are expecting a Rs. 4 billion profit.

Q: Do you have a strategy to develop the IT department in the Bank?

A: All our IT developed services are sensitive. We want to promote the Bank as an IT savvy bank. We have now included IT in the core-banking solutions including electronic payment gateways with existing system. At present 135 branches in the platform balance 170 branches will link up before 2006.

Q: It is said that Bank of Ceylon is not competitive enough to face the current competition in the banking sector due to private banks and foreign banks in the country. Do you have any strategy to overcome that problem?

A: We have a very good customer base with a strong islandwide network covering major cities in the country. We are going to attract depositors by segregating the market with specific market segments with unique features. Year 2006 will be named as the "Customer Care year' in order to improve the services to our customers detailed of this program will be published in the first week of January. There will be many changes in the BoC branches.

Q: The Bank sources say that a large number of employees in the bank. How are you going to recruit new staff and to increase the employee productivity?

A: Initial discussions have been commenced with trade unions to discuss employee-related problems. There will be no policy on reducing employee benefits as a policy. The Bank's management is studying the proposals submitted by trade unions for the Collective Agreement to be signed for 2006-2008. There will be no improper recruitment in the future.

Q: Deposit growth has been sustained. The year-end Customer Deposits increase, reflecting a growth compared to last year 2003. Do you have any mechanism to attract further deposits in the coming moths?

A: BOC will increase its deposit interest rates in the near future in keeping with the Monetary Policy of the Central Bank of Sri Lanka. In addition a separate programme is being prepared to increase the deposits targeting different sectors in the society from next year.

Q: The Bank expects to raise the number of Credit Cards and ATM cards to customers and to be competitive in the market in this sector. How are you going to facilitate the program?

A: It is really technology transformation programme will be introduced to increase the number of credit card customers from next year. At present have ties up with Sampath Bank. We are also in the process of negotiating with Hatton National Bank and Commercial Bank for another tie up.

Q: How about BoC overseas branches and their operations?

A: We have branches in London, Male and Chennai. Those branches are functioning well. A lot of Sri Lankan expatriates transact with our London branch, while Male and Chennai branches are also picking up.

We also have an overseas customer unit deals with foreign remittances, NRFC accounts. We give attractive interest rates. A lot for Middle East foreign employees benefits out of that.