LEADERSHIP
CHAIRMAN'S MESSAGE
"With a legacy of trust and a vision for the future, BOC is more than a Bank; it is a nation-building institution, committed to powering Sri Lanka's path toward economic revival, self-sufficiency, and global competitiveness"
"A record financial performance by any institution and one of the largest tax payers in the country."
Kavinda M L de Zoysa
Chairman
SHAPING STRATEGY TO SUPPORT A NEW ECONOMIC RENAISSANCE
In response to the evolving challenges, we focused on fostering economic stability by aligning our efforts with national priorities. Improvements in macroeconomic fundamentals, created a conducive environment for the Bank to play a supportive and pivotal role in driving a positive transformation. During this period, we placed emphasis on our five strategic imperatives; customer excellence, digital excellence, asset quality, stability in governance and sustainable growth and high performing team.
We focused on strengthening financial inclusion, expanding access to affordable credit, and supporting key sectors such as agriculture, infrastructure, and Small and Medium Enterprises (SMEs). Through targeted initiatives, we made financing more accessible to underserved communities, enabling them to participate in the recovery and growth of the economy. Our commitment towards these dimensions is reflected in our core strategy.
Our strategic initiatives placed a strong emphasis on digital transformation, improving our services to make banking more convenient and accessible for our customers. We launched several innovative solutions to create a frictionless banking experience, reducing barriers to financial services and empowering individuals and businesses alike. Moreover, we worked towards building a more sustainable future by promoting environmentally and socially responsible practices, both within our operations and through the products and services we offered. Our efforts to integrate sustainability into our business model delivered positive outcomes, contributing to the welfare of the people and communities we serve. As the economy stabilised, BOC also played a crucial role in driving economic empowerment through entrepreneurship and job creation especially targeting women, youth and SME of our country.
Looking back, the impact of these strategic imperatives was clear. We helped our customers thrive in a period of transition, creating an environment where growth, stability, and opportunity could flourish. These initiatives are not only a testament to our strength as a financial institution, but also to our unwavering commitment to the people of Sri Lanka.
As we continue to build on this success, we are strongly anchored on retaining market leadership, enhancing digital adoption, achieve best in sustainable banking status and exceed customer expectation.
SUSTAINING MARKET LEADERSHIP
The Bank achieved exceptional results during the year, demonstrating its commitment to financial stability and operational excellence. The Bank recorded a profit before tax of LKR 106.9 billion (never before achieved by any institution in Sri Lanka) compared to the corresponding figure of LKR 40.3 billion recorded in 2023, reflecting an exponential growth of 165%. The Bank recorded a profit after tax of LKR 64.4 billion, reflecting a 141% increase against the previous year. Enhanced profitability levels bolstered the Return on Assets and Return on Equity ratios to 2.3% and 23.2% respectively. The Bank's contribution by way of financial service tax, income tax and others amounted to LKR 65.9 billion thereby denoting the Bank's significant contribution to the national economy as a state-owned enterprise.
The Bank continued to uphold market leadership in assets, advances, deposits and foreign currency deposits, while its consistent growth in key financial indicators cemented its dominance in the Sri Lankan banking sector.
Assets
In a notable milestone, the BOC Group's assets surpassed the LKR 5.0 trillion mark, supported by a 13% growth against the preceding year; a clear indicator of the Bank's strategic focus on assets and liability management and the
ability to capitalise on favourable market conditions. Despite the appreciation of the rupee, high levels of customer confidence and deposit mobilisation resulted in a noteworthy 8% growth in the deposit base, reaching a value of LKR 4.2 trillion during the year.
The Bank maintained robust capital adequacy ratios well above the statutory requirements. This highlights, the Bank's strong capital position and its ability to absorb potential risks. Additionally, BOC raised LKR 15.0 billion through a Basel III-compliant Tier 2 debenture issue during the year, enhancing the Bank's capital base and financial resilience.
Capital Adequacy Ratio
The Bank's position as a symbol of trust and stability continued to resonate across wide-ranging of stakeholder groups, resulting in the Bank garnering several accolades and achievements during the year. It gives me immense pride to share that Bank of Ceylon has been awarded the prestigious title of 'Bank of the Year Sri Lanka 2024' by 'The Banker Magazine', a renowned publication of the Financial Times Group, UK, and holds the distinction of being the only Sri Lankan bank listed in the Top 1,000 World Banks 2024.
CUSTOMER CENTRICITY AT THE CORE
We value our loyal customers as our greatest asset, placing them at the core of everything we do. With an extensive network comprising over 2,300 direct customer touchpoints, including fully equipped and mobile branches, SME centres, ATMs, CDMs and CRMs, the Bank relies on an island-wide network and an overseas presence to ensure accessibility to its wide range of banking services.
Our IT initiatives have been instrumental in creating a seamless and personalised banking experience, allowing us to offer tailored financial solutions with the respect and attention every customer deserves. We empower our staff with advanced digital tools, freeing them to focus on value-adding interactions rather than routine tasks. The success of these innovations are evident in the strengthened customer relationships which has empowered our staff to provide customised solutions to a wide spectrum of customers from a rural farmer and a small business owner to leading corporates.
Through affordable credit, microfinance, and community banking solutions, BOC uplifts small businesses, empowers women entrepreneurs, and strengthens local economies; ensuring equitable growth. The 'BOC Gammana' and 'BOC Mithuru' initiatives extend beyond the realms of banking serving as lifelines to empower individuals and communities across Sri Lanka ensuring financial inclusivity despite geographical boundaries, income levels, or any other backgrounds.
At present, the Bank has initiated steps to revive and modernise its branch network in Sri Lanka and abroad to provide a seamless banking experience and access to more banking services. The Bank will continue to strengthen operational efficiency and agility, with a focus on streamlining decision-making to deliver swift results and remain responsive towards market shifts and the evolving needs of our customers.
COMMITMENT TO SUSTAINABLE AND IMPACTFUL FINANCE
As a responsible corporate citizen, we are committed to creating a positive impact for our stakeholders. We prioritise balancing profit, people and the planet as core values in everything we do. Environmental responsibility has been embedded into the Bank's systems, structures, and processes, particularly concerning to its paperless operations, digitalisation and the integration of rooftop solar panels into its physical locations. By integrating ESG aspects across its operations, the Bank contributes towards all 17 UN Sustainable Development Goals.
BOC also currently serves as one of the largest contributors towards solar lending, financing the Nation’s investment in renewable energy. During the year, approx. 800 facilities were screened through the ESMS Unit for compliance with ESG factors to ensure that our lending portfolio conforms to sustainability guidelines.
The Bank contributed towards the growth and development of rural communities through its specially devoted programmes to promote financial inclusion and uplift rural communities. The Bank continued to invest in impactful CSR initiatives designed to drive sustainable development in Sri Lanka. The Bank's commitment to empowering the youth of the country was exemplified by dedicated loan products for driving and promoting entrepreneurship and new business startups. During the year, the Bank of Ceylon partnered with Government agencies such as Sri Lanka Post, the Industrial Development Board and multilateral organisations to promote responsible finance and financial literacy.
By the end of the year 2024 over 700,000 "Aswesuma" accounts are opened to support the most needy segment. Debit Cards at the cost of the Bank were also provided to over 304,000 customers to support and bring them to the banking service. The Bank's commitment to financial inclusion is further demonstrated by a 50% growth in the Bank's SME portfolio, supported by the introduction of several loan schemes designed to support MSMEs, empower women and youth and promote rural development.
The Bank's social initiatives are further underpinned by efforts to promote an empowered, diverse workforce, bolstered by inclusive policies, a rewarding culture, and high levels of employee engagement and development.
AGGRESSIVELY INVESTING IN DIGITAL TRANSFORMATION
Aligned with the country's digital strategy, digital transformation remains a pivotal strategic focus, and this year, we made significant strides as reflected in the evolution of our digital ecosystem. In response to evolving customer needs, the Bank focused on enhancing and improving the capabilities of the mobile banking app during the year, thereby addressing scalability, elevating the customer experience and delivering higher levels of satisfaction. Looking ahead, the Bank aims to rely on its existing platforms to supplement physical branches to digital touchpoints, to further enhance customer convenience.
In an era defined by digital acceleration, Sri Lanka is making bold strides toward a cashless, interconnected financial landscape. At the heart of this transformation lies GovPay, a seamless digital payment platform that bridges the public sector with citizens and businesses, facilitating secure, real-time transactions.
As the Nation's premier state-owned bank, the Bank plays a pivotal role in enabling this ecosystem, leveraging its robust digital infrastructure to drive financial accessibility and efficiency by integrating the latest technology within its operations to streamline processes. The Bank leads in the Nation's digital adoption rates concerning its digital and electronic channels with most of the transactions of the Bank done through digital platforms.
The significant investment to upgrade our IT systems signify the importance we have placed on digital transformation. The Bank's primary ambition lies in enhancing speed, efficiency and connectivity with the end goal of accelerating the potential for national economic growth.
THE STRENGTH AND POTENTIAL OF OUR PEOPLE
Our workforce comprises over 8,200 skilled, performance-driven individuals, who serve as the cornerstone of the Bank's success. They are the heart of this institution who can convert strategy to action. We are dedicated to nurturing the potential of our people, empowering them to be agents and catalysts of change. By investing in the development of our diverse workforce in terms of continuous upskilling and reskilling, we are fostering a culture built on meritocracy along with an environment where innovation and inclusion thrive. By harnessing the potential of our people, I believe we can achieve great strides of progress. Our focus on unlocking individual capabilities through a diverse and skilled team allows us to deliver superior service and meet the most critical needs of our loyal customers.
GOVERNANCE AND RISK OVERSIGHT
Our emphasis lies in maintaining robust compliance with laws and regulations, and rigid internal controls, and a comprehensive risk management framework that encompasses diverse focus areas. I firmly believe that compliance is fundamental to the Bank's operating model and must be deeply embedded in our culture. It is imperative that every staff member embraces it as part of our DNA, with a zero-tolerance stance on fraud - a message that must resonate across all levels of the organisation. The Bank also continues to engage in the strategic and meaningful deployment of customer deposits and capital to ensure financial stability amid a changing landscape.
The Bank's commitment towards good governance, sustainable risk management and robust performance amidst challenges made the Fitch Ratings to upgrade Bank of Ceylon's National Long-Term Rating to 'AA-(lka)' and the Long-Term Foreign and Local Currency Issuer Default Ratings to CCC+, along with the country's economic recovery.
USHERING IN AN ERA OF PROSPERITY
Sri Lanka is indeed at the cusp of a new economic renaissance, marked by several transformative shifts across economic, political, and social spheres, with opportunities emerging in infrastructure development, digital innovation, and regional trade. Improved credit growth along with regulatory measures such as the Banking (Amendment) Act has positioned the banking sector for sustained stability amid evolving global challenges. These developments augur well for the expansion and growth of the banking industry.
The focus is on rebuilding the economy after recent challenges, leveraging its strategic location and strengthening key sectors such as tourism, BPO, Exports, manufacturing, and agriculture. Drawing strength upon our rich legacy, we intend to play a catalyst role to individuals, businesses and communities channelling financial strength, digital innovation, and sustainable banking to rebuild industries, empower citizens, and drive inclusive economic development.
With a legacy of trust and a vision for the future, BOC is more than a Bank, it is a nation-building institution, committed to powering Sri Lanka's path toward economic revival, self-sufficiency, and global competitiveness. This legacy of trust is further strengthened by the record-breaking profitability and the Bank's significant contribution to national revenue through taxation.
At Bank of Ceylon, we believe in the power of collaboration and responsible leadership. With deep insight and expertise, along with an expansive reach to serve across the country, we are committed to fostering financial and digital inclusion, ensuring strong governance, managing risks wisely and driving sustainable growth. Our focus is on creating enduring value for all our stakeholders, as we work towards a future where Sri Lanka stands among the most dynamic and fastest-growing nations in the region.
The Bank is guided by insightful leadership and the strength of its people. At the core of our success is our people; the driving force behind our transformation. We hope to foster a culture where every member of our team is empowered to act as a catalyst for change, enabling a bottom-up approach. By equipping our staff with the right skills, tools and insights, we hope to empower our team to be trusted advisors who play a pivotal role in guiding our customers' growth journeys. This approach will enable us to enhance service excellence, deepen customer relationships and create meaningful impact.
With the growing complexity in global markets and the dynamic nature of the financial sector, the Bank will focus on a proactive, forward-thinking approach to risk management. Our strategy hinges on identifying and mitigating potential risks before they materialise, to encourage an environment where innovation thrives without compromising on stability.
A NOTE OF APPRECIATION
I would like to extend my heartfelt gratitude to the General Manager/ CEO Russel Fonseka for his steadfast and visionary leadership during one of the most challenging periods in history, corporate and executive management teams for the commitment and dedication to safely guiding the Bank through the most challenging period in its history. I express my sincere gratitude to the committed team of BOC who worked tirelessly to deliver the Bank's strategic aspirations.
The sole shareholder of the Bank, the Government of Sri Lanka has been a guiding force. I wish to place my sincere appreciation to the Hon. Minister of Finance and Secretary of the Treasury, the officials of the Ministry of Finance, for their continued support. I wish to convey my sincere gratitude to the Governor and the officials of the Central Bank of Sri Lanka and the Auditor General and his staff for their continued support.
I extend our sincere appreciation to Mr Kavan Ratnayaka, my predecessor and the outgoing Board of Directors for their service and tireless support in navigating the challenges that prevailed during the year. I extend a heartfelt thank you to my colleagues on the Board for their collective wisdom and steadfast support in charting the course of the Bank at this pivotal phase.
I would like to thank the Unions for their collective passion to nurture the legacy and future of 'Mother BOC' and urge them to continue to do so in the years to come with an open mind for new innovations and progressive ideas. I extend my heartfelt appreciation to the customers, business partners and all other stakeholders for their unwavering support and confidence.
As we move ahead, the Bank continues to rely on its strong foundation which has provided the impetus to navigate the future with confidence. Strengthened by our connections, we are geared to create sustainable value by staying true to our purpose of serving the nation.
Kavinda M L de Zoysa
Chairman
24 February 2025
Colombo