Performance Of International, Treasury, Investment And Overseas Operations

• Smart Remittance enhancements by assigned 30+ Business Promotion Officers (BPOs) across 11 countries.
• BOC Foreign Circle made significant progress by onboarding 800+ new customers.
• Disbursed over 5,000 pre-departure loans and post-departure loans to migrant workers.
• Information sharing platform for worker remittance stakeholders via "Lanka Bankuwen Ran Kahawanu" on City FM and "Ethera Methera" on Rupavahini.
• Increased customer awareness and promotions by conducting 162 awareness programmes ("Pita-Pita Rata Thegi-Season 03" offered a luxury villa as the first prize).
• Establishment of the Foreign Currency Management Unit offering convenient and tailored travel solutions.
• Aggressively engaged in Wealth Management products expanding Portfolio Management Services (PMS) to high net worth clients and managing a substantial fund.

• BOC's significant involvement in the country's digital finance infrastructure development was further established by extending three years term as the Settlement Bank for Sri Lanka's Interbank US Dollar Online Payment System.
• Our Application Programming Interface (API) based Remittance Processing systems was introduced to offer the fastest remittance disbursement experience in the country.

• Enhanced internet banking and domestic transfer capabilities; Seychelles Electronic Fund Transfer (SEFT) in Seychelles.
• Sophisticated software system in place to function Trade Finance (FTI) and Asset Liability Management (ALM) systems in Chennai.
• Relocated the foreign exchange counters at Bandaranaike International Airport with a state-of-the-art facilities, significantly improving efficiency and service delivery with enhanced brand visibility.

• Expanded credit facilities in the portfolio of overseas branches to support businesses, migrant workers, and high-net-worth clients.
• Strengthened the monitoring of Stage 3 loans and advances recovery strategies.
• Large-scale project funding.

• Job-specific training to enhance the expertise.
• Implemented various employee productivity enhancement initiatives.
• Increased business focus by reinforcing with new staff recruitment to overseas branches.

INTERNATIONAL BANKING

In 2024, BOC proudly solidified its market leadership in worker remittances, capturing a major portion of total market share. This achievement underscores our unwavering commitment to facilitating seamless and efficient fund transfers for Sri Lankans across the globe.

Our international success stems from a robust foundation built by our Correspondent Banking Department, coupled with a proactive approach to outreach and accessibility by maintaining correspondent relationships with leading banks and exchange companies across all continents. We ensure seamless cross-border transactions and efficient international operations, solidifying BOC's position as number one in global reach and providing a distinct competitive edge in all international transactions.

Recognising the evolving needs of our customers, we continuously strive to enhance our remittance platforms and streamline transaction processing. Our robust remittance disbursement system, the "Smart Remit," is capable of processing remittances in real-time, which is one of the leading such technologies in the country.

At BOC, we believe in fostering strong relationships with our customers and recognising their contributions. To further enhance engagement, we launched incentive-driven campaigns, such as the highly successful "Pita-Pita Rata Thegi - Season 03" awarding a fully furnished luxury villa worth over LKR 30.0 million in 2024.

Our International Division, through its dedicated 'Foreign Circle' overseas customer service support unit, reinforced its commitment to delivering a world-class banking experience for our global clientele. Leveraging the expertise and foreign exposure of its staff, the 'Foreign Circle' provides a comprehensive and satisfying service to the migrant community. Beyond addressing account-related inquiries, this specialised team offers vital information to empower informed financial decision-making.

Furthermore, one of the major functions of BOC as a state bank is enhancing financial inclusion. To achieve this, the Bank conducts awareness programmes on banking and finance to prospective migrant employees and their families. The "BOC Rankahawanu" and "Ethera Methera" programmes continuously provide updated financial information for migrant employees to make informed decisions about their finances and investments. These programmes, coupled with the Bank's continuous maintenance of connectivity with the migrant community through the Foreign Employment Bureau of Sri Lanka, the Central Bank of Sri Lanka, and Sri Lankan Embassies in foreign countries, ensure that vital financial knowledge reaches those who need it most.

Recognising the critical role of worker remittances in supporting the nation's turbulent economy, BOC has initiated numerous activities to encourage these flows through formal banking channels. By promoting formal remittance channels, BOC aims to strengthen the country's foreign exchange reserves and stabilise the financial landscape.

To encourage the expat community to send more remittances through BOC, many marketing campaigns and awareness programmes were conducted throughout the year 2024.

Joint marketing campaigns with exchange companies in different countries were also conducted and customised tariff structures and rebate systems have also been offered to prominent exchange companies to incentivise them to route more remittances through the Bank.

Further, facilitating foreign payments of overseas travelers, the Travel and Remittances Department has enhanced their customer reach by adding unique travel cards to product portfolio.

TREASURY

The Treasury Division of the Bank of Ceylon plays a vital role in managing the Bank's financial stability, liquidity, and risk exposure. It is structured into three key departments; The Dealing Room, the Primary Dealer Unit Front Office (PDUFO), and the Asset and Liability Management Unit (ALM). 2024 witnessed a gradual downward trend in policy rates as the CBSL continued the interest rate easing policy, which impacted the Bank's interest income and lending strategies. The Statutory Reserve Ratio (SRR) remained stable at 2.00% while CBSL introduced an Overnight Policy Rate (OPR), replacing the previous dual policy rate structure.

These adjustments, aligned with CBSL's monetary policy, facilitated the management of the Bank's financial costs, strengthening its liquidity position. Furthermore, the inflation rate reduced significantly during the year, supporting a stable and growth-oriented financial environment.

We focused our strategy on deploying excess liquidity investing in high yielding instruments. This approach allowed us to enhance interest yields and capitalise on opportunities to maximise capital gains at the most favorable times. The Treasury Division implemented effective strategies to successfully manage the Net Interest Margin (NIM), contributing to a Net Interest Income of LKR 167.6 billion. Through strategic liquidity management and fund deployment, these efforts also played a key role in managing the Bank's financial costs. Further, we were able to successfully negotiate and complete the restructuring of major Government and SOE's exposures.

Emphasising digital transformation, the Treasury Division initiated the development of a web-based dashboard for real-time Treasury Information and Market Pulse reporting. Additionally, the ongoing upgrade of the Finacle Treasury system is set to automate the deal generation process, further improving operational efficiency.

Simultaneously, regulatory changes, including adjustments to statutory liquidity ratios and capital requirements under Basel III, required significant strategic realignments. The Treasury Division navigated these complexities by adopting proactive liquidity management and risk mitigation techniques, ensuring continued financial stability.

INVESTMENT BANKING

Investment Banking Division remains steadfast in its commitment to delivering innovative financial solutions and creating lasting value for our stakeholders. 2024 was a year of growth and enhancement, marked by significant achievements that solidified our position as a leading financial partner.

We successfully navigated the complexities of the market through the issuance of Basel III-compliant listed debentures. This accomplishment not only demonstrates our strength and resilience but also strategically bolsters our capital adequacy, positioning us for continued growth and stability. The over subscription of this successful issuance underscores investor confidence in BOC's robust financial standing and effective execution of complex financial transactions. Our trustee and custodian services experienced substantial expansion, exceeding the expected fund size. Also, we provide trustee services for Debt instrument issued by the corporate entities exceeding LKR 150.0 billion.

One of our significant activities is providing Portfolio Management Service (PMS) which is a tailor-made wealth management product offered to high net-worth clients and funds, facilitating them with access to a wide range of investment products varying from traditional bank deposits to structured capital market instruments under the Investment Manager license issued by the Securities and Exchange Commission of Sri Lanka (SEC).

Innovation is at the heart of our operations and we have continued to automate our portfolio management services, enhancing efficiency, transparency, and ultimately, providing higher returns for investors.

Investment Banking Division is dedicated to providing tailored solutions and building long-term relationships. We are confident that our strategic initiatives, coupled with our deep market understanding and unwavering commitment to excellence, will continue to drive our success and contribute significantly to the overall growth of the Bank.

OVERSEAS OPERATIONS

Chennai Branch

Throughout 2024, Chennai branch demonstrated resilience in managing operations and the branch proactively implemented strategies to retain deposits, ensuring credit growth and liquidity. Furthermore, the branch successfully introduced the new Trade Finance system and the ALM system, enhancing operational efficiency.

Further, several IT-related enhancements were implemented, including server upgrades, Stage 3 automation, and the automation of National Electronic Fund Transfer (NEFT)/ Real Time Gross Settlements (RTGS) transactions.

HR-related challenges were effectively managed, fostering a cohesive and motivated team. Additionally, concerted efforts were made to recover Stage 3 facilities through compromised settlements.

In terms of lending, the branch supported multiple large-scale projects including machinery imports and working capital, equipment purchases, and these initiatives demonstrate the Bank's continued commitment to financing growth and development in the region.

Maldives Branch

Maldives branch remained the largest contributor to our overseas banking operations, generating YoY growth in income, deposits, advances and operational profit. It also contributed significantly to worker remittance inflows from the Maldives to Sri Lanka and export proceeds, recording the remarkable growth YoY and reinforcing our international banking presence. The expansion of its POS and IPG merchant acquiring business which surpassed the budgeted revenue reaching its highest level

in history also made another milestone. The branch's new approach to treasury operations also delivered impressive result with substantial growth in terms of interest and exchange income.

Despite Fitch's downgrade of the Maldives' foreign currency issuer rating to 'CC', proactive liquidity management strategies ensured the continuous delivery of uninterrupted financial services. Further strengthening our project financing portfolio, we engaged in financing some large scale projects in Maldives including resort developments and construction of commercial apartments.

In May 2024, Maldives branch commemorated its 43rd anniversary with a special Customer Felicitation Ceremony. This event celebrated over four decades of trust, partnership, and excellence in the presence of BOC in the Maldives' banking sector. Enhancements in digital banking services, included upgrading the Automation of Maldives International Transaction Reporting System which further solidified our market leadership in the Maldives.

Seychelles Branch

The Seychelles branch strengthened its presence in 2024 successfully with strategic capital infusion at the end of the year for future business expansions. Notably, the branch played a key role in large-scale project financing including both residential and commercial property developments.

Technological advancements played a crucial role in the branch's progress. In 2024, the internet banking platform was enhanced and the Disaster Recovery (DR) centre's operations were successfully completed, ensuring reliable connectivity and resilience in banking services. These developments reflect the Bank's commitment to strengthening its service capabilities while maintaining operational stability in Seychelles.