Our Performance
Performance Of Retail Banking
KEY STRENGTHS
A robust customer base of over 16.1 million served through about 2,300 touchpoints including an extensive branch network.
Advanced digital banking solutions.
Tailored loan products reaching out to wide segments.
Financial inclusivity through BOC Mithuru and BOC Ranliya Loans, benefiting women-led businesses.
Lending growth of 50% for Micro Small and Medium Enterprises (MSMEs).
Leading Retail Banking segment in Sri Lanka's banking sector.
OUTPUTS
OPERATING CONTEXT
In 2024, the Bank continued to face an evolving financial landscape marked by uncertainty in the operating environment. The retail banking sector navigated high-interest rates, volatile exchange rates and reduced disposable income due to higher personal taxation levels.
Debt sustainability and inflation moderation were key priorities, with the Bank implementing structured repayment plans and extending debt restructuring facilities to mitigate economic pressures. Strengthened risk assessment models helped to improve credit portfolio resilience amidst inflationary trends.
Despite these obstacles, the Bank expanded its SME portfolio to LKR 130.5 billion and via integrated credit assessments and thorough analysis, the associated risks were mitigated. It is evident that, the Bank's commitment to environmental sustainability is reflected in the 300% growth (Y-o-Y) in green financing, highlighting the Bank's sustainable focus. These measures solidified the Bank's position as Sri Lanka's most resilient retail banking institution, ready to embrace emerging opportunities.
PERFORMANCE AGAINST STRATEGY
STABILITY, GOVERNANCE AND SUSTAINABLE GROWTH
● Strengthened governance frameworks to enhance regulatory compliance.
● Integrated ESG considerations into lending decisions for responsible banking.
● Expanded sustainable financing initiatives, including green lending and renewable energy projects.
● Enhanced financial stability through strategic resource allocation and management.
EXCELLENCE IN CUSTOMER EXPERIENCE
● Financial inclusion: Decentralised Islamic Banking operations across the branch network and expansion of BOC Mithuru projects.
● Introduced SME Forums in 2024 and "SME Clinics" to provide personalised solutions to SME entrepreneurs. These initiatives aim to increase customer loyalty, diversify loan portfolios, and support MSME businesses with both financial and non-financial services.
● MSMEs financing continued, offering support to targeted borrowers who are engage in MSME activities and preventing defaults through proper evaluation and continuous follow-up.
● SME outreach: Over 3,000 SMEs supported via financial advisory and funding.
● Women entrepreneurs: Women-led businesses were funded through "BOC Ranliya" Loans.
● Fostered financial literacy and business resilience through special awareness sessions: Conducted eight Financial Awareness Sessions and SME Customer Forums, while the Bank's officers also contributed as resource personnel in nine awareness programmes, reinforcing our role as a trusted partner in SME development.
● The BOC Gammana initiative focused on improving and uplifting rural communities in Sri Lanka by developing infrastructure, supporting agriculture, promoting sustainability and enhancing education and healthcare. The first phase has been successfully completed covering eight villages, with three in pipeline, significantly impacting the lives of rural villagers.
● Launched additional financial literacy and business revival programmes.
DIGITAL EXCELLENCE
● Mobile and internet banking: 47% of transactions are in digital mode, an increase from 43% in 2023.
● Launched real-time payment tracking and fraud detection for improved security and customer experience.
● New digital onboarding processes attracted over 850,000 new mobile banking users.
REWARDING CREDIT CULTURE AND HEALTHY CREDIT PORTFOLIO
● Implemented Interest-subsidised, refinance and the Bank funded loan schemes at concessionary terms.
● Tea Smallholders Loan Scheme was initiated, benefiting over 1,000 additional smallholders.
● Facilitated in creation of 11,320 young entrepreneurs by allocating LKR 5.5 billion via BOC Youth loan scheme.
BUILDING A HIGH-PERFORMING TEAM
● Conducted specialised training programme to enhance staff capabilities.
● Expanded Islamic Banking awareness to branch network.
● Included introductory sessions on Islamic Banking to all training programmes conducted by CTI.
● Implemented performance-based incentives, including overseas training opportunities and awarding appreciation letters.
● Strengthened customer service training to enhance customer relationship management.
● Promoted leadership development initiatives under long-term succession planning.
The Bank introduced new loan schemes to reach out to a wider spectrum thus serving the unique needs of these segments.
During the year, BOC took steps to uplift village communities through working capital facilities and investment under the Saubagya Loan Scheme to uplift village communities. The guidance and mentoring offered through the 'Saubagya Development Bureau' helped these communities to advance efficiency levels and production capacity.
Our retail banking franchise made significant strides in the development of digital banking as well as financial inclusion. Our continued focus on expanding coverage to underpenetrated segments, particularly SMEs and women entrepreneurs, led to increased outreach and a strong rise in demand for our value-added loan products. Retail segment CASA percentage stood at 36%, illustrating how robust the retail banking sector was in its ability to navigate the volatility faced by SMEs, entrepreneurs, and individual clients in 2024.
The Bank is strategically expanding its Islamic Banking Division to enhance accessibility and cater to a broader customer base. Through the decentralisation of Islamic banking services, the Bank aims to extend Shari'ah compliant products, including deposits and financing island wide, ensuring financial inclusion for individuals and businesses. Guided by a seasoned and committed Shari'ah Supervisory Board and expert team, BOC is intensifying its Islamic banking operations under the banner of BOC.
This initiative is in line with the long-term vision of the Bank to diversify its portfolio in Islamic banking without affecting transparency, compliance, and customer-centric provision of services.
The launch of new products, along with the formation of new 330 Mithuru groups, enhanced the low - cost deposit base, further adding to the stability and diversification of our deposit base.
We also enhanced some of our current loan schemes to cater to dynamic market needs, including solar power financing, electric vehicles, and biogas unit financing, as well as SME-focused credit schemes like SME Energizer, NCRCS Sarusara, SMILE III, E-Friends, and Kapruka Coconut Development Loan Scheme. The commitment to the SME segment highlighted through initiatives like the BOC SME Circle, which is providing customers financial education and advisory activities, and the inauguration of SME Forums for business networking. Further, the Bank is continuously collaborating with external institutions to offer bespoke solutions through SME Clinics.
We envision an expansion of our microfinance portfolio and pursuing our green initiatives, reinforcing our role as a responsible financial partner in supporting sustainable economic development across Sri Lanka.
DEPOSITS
Throughout 2024, the Bank braved the challenges posed by the economic and political climate with intense concentration on growing our retail banking franchise. The Bank's retail deposits expanded significantly through its steadfast customer-first mentality. Despite the fluctuations in interest and exchange rates, the Retail Segment deposit base rose which speaks volumes of the strength of the Bank's deposit products. Time deposits also increased in the Retail Segment which is an obvious sign of the sustained trust and confidence placed in us by our customers.
LOANS AND ADVANCES
In 2024, the Bank introduced several innovative loan schemes to promote entrepreneurship, sustainability, and economic resilience in Sri Lanka. We launched the BOC Youth Loan Scheme to meet the investment as well as working capital needs of young entrepreneurs.
In addition, under the SMELoC2 project funded by the Asian Development Bank, we provided working capital funds to MSMEs in critical industries such as manufacturing, agriculture, tourism, technology, and export with an emphasis on the majority portion of the said fund being invested in these lifeline industries.
Another key initiative was BOC Ranliya Loan Scheme that was conceptualised specifically for women entrepreneurs. This scheme offers loans of up to LKR 100.0 million with attractive rates of interest, grace period of a maximum of six months, and repayment terms of up to five years for investment loans. With tourism as well as export-oriented industries getting priority, the scheme encompasses women business enterprises.
Having recognised the need of promoting the tea industry, which is significantly contributes to the country's export income, the Bank has introduced a special loan scheme for tea small holders. This scheme provides loans for new planting, replanting, infilling, nursery development, irrigation, water and soil management and mechanisation with a maximum limit of LKR 500,000/- at an attractive interest rate. It also includes a one-year grace period and a repayment period of seven years.
While our top priority remains sustainability, it has been a key driving factor behind projects such as the interest-free credit scheme for the Agriculture Modernisation Project and a special loan programme for installing solar power systems. Additionally, significant funds were allocated to priority sector lending in particular agricultural-based loans aimed at strengthening the sector.
In the future, we look ahead to expanding our microfinance businesses and undertaking our green initiatives in order to entrench ourselves further as a financial partner of trust in driving Sri Lanka's economic growth sustainably.
As a part of our commitment to communities, we also initiated the "BOC Ranaviru Pranama" loan Scheme for extending special financial facilities to disabled members of the Tri- Forces, to engage in any legally acceptable income generating activity.
Maintaining assets quality is never compromised ever amidst these more focus towards development lending. The Business Revival and Rehabilitation Units (BRRUs) established under provinces were further empowered through specially designed training programmes.
TRANSACTIONAL BANKING
In 2024, the Bank made significant strides in expanding its transactional banking services, aligning with the growing trend of digitalisation in the financial sector. The Bank continued to enhance its Internet Payment Gateway (IPG) in partnership with MasterCard, offering secure online transactions and global e-commerce solutions. The Point-of-Sale (POS) machines also experienced steady growth in market penetration reflecting the wider acceptance of digital payments. During the year, 35 BOC Connects agents were added facilitating convenient banking for communities in rural areas. BOC's commitment to digital transformation was further evident in its expansion of digital platforms ensuring that financial services remained accessible to customers across all provinces. As transactional banking continues to rise, the Bank remains focused on offering seamless cashless transactions, providing customers with efficient, secure, and convenient access to retail and service providers.
Launched: BOC prestige credit card
OPPORTUNITIES
- Business expansion through green product initiatives and improving leasing portfolio.
- Increasing participation in financial awareness campaigns help to expand the Bank's customer base and improve financial resilience among borrowers.
- Collaborations with fintech companies and international development agencies can drive product innovation and financial inclusion.
RISKS
- The evolving banking policies create a challenging environment. Regulatory shifts could lead to stricter requirements.
- As digitalisation grows, banks face heightened exposure to cybersecurity threats. Alongside this, operational risks rise due to employee attrition.
- A combination of factors increased credit risk of borrowers failing to meet debt obligations.
- The growing competition from other banks offering more attractive rates.
WAY FORWARD
- Digital Expansion – Introduce AI-driven banking solutions for personalised financial advisory and risk assessment. Integration of blockchain technology for enhanced security in retail banking.
- Green Financing Growth – Increase funding for renewable energy, Electric Vehicles (EV) leasing, and waste management projects, aiming for notable growth in sustainable lending.
- Financial Inclusion – Strengthen microfinance programmes to empower rural entrepreneurs and women-led businesses, expanding the Mithuru groups initiative further.
- Strengthening SME Support - Expand SME Energizer funding to ensuring greater support for small-scale businesses and exporters.
- Deposit Growth Strategy - Introduce new high-yield savings and fixed deposit schemes to attract long-term deposits, enhancing liquidity management.
- Cybersecurity and Digital Safety- Implement next-gen fraud detection systems, strengthening customer protection as digital transaction volumes increase.
- Regulatory Compliance and Risk Management - Adapt CBSL's monetary policies, ensuring compliance while maintaining regulatory ratios well above the norms such as private sector lending.