by Sanath Nanayakkare
As the 3rd and 4th quarters of the Year 2022 are also likely to gravitate towards a tough time, the Bank of Ceylon needs to continue to focus on efficient handling of its resources and finances, BOC Chairman Kanchana Ratwatte said yesterday.
He made these remarks when the Bank marked its 83rd Anniversary at the BOC headquarters in Colombo yesterday, where a large number of key employees of the Bank were present whose work interfaces with accounts, transactions, remittances, Export Circle, SME Circle, international trade etc.
“Do not forget that that the significant increase in interest rates has impacted most businesses and the 3rd and 4th quarter recoveries are going to be impacted. So if we are not careful about how we handle our finances, we are going to make life difficult for our end-customers. We need to look after our customers because they pay for our wages,” he told BOC employees.
Further speaking the BOC Chairman said: “We made a per-tax profit of over Rs.43 billion in 2021. However, the Bank reported a pre-tax profit of Rs. 9.5 billion for the period ended 31 March 2022. As a result of the fuel shortage and power interruptions almost all industries and all segments of the society have been adversely impacted. So, we at BOC will see its impact on our balance sheet. In this context, we have to be careful as to how we manage our resources.”
“More than 40% of the income of the Bank of Ceylon comes from the public sector. Our profit is earned significantly from that segment. The balance 60% comes from the private sector. In this scenario, we have to be all the more careful in the third and fourth quarters of the year, which are going to be even more impacted due to the current scenario.”
“My expectation is if there is any assistance that is coming from outside it will be in the last quarter of this year. And if it doesn’t come in the last quarter of this year, we are not going to survive as a country. I am confident that in the 3rd and 4th quarter we should have something to look forward to. BOC on its own is looking at a number of funding sources. We have formed committees for the purpose and we are trying to ensure that any funding gap is bridged.”
“The challenge would be the impact of everything that is happening now. The lack of fuel has an impact on the transport sector as well as the power sector. When there are power cuts and when people can’t commute to work, the spillovers connected with that would be reflected in the next quarter’s financial statement.”
“The impact of the rupee devaluation is being felt now. The exchange rate shot up from Rs. 200 to Rs. 360. That is being reflected on our imports. I believe that over a period of time, that should settle.”
“BOC made significant achievements in the past two years by supporting the national effort in the fight against COVID-19. We spent a lot on the vaccination programme. At that time the country was running short of hospital beds and everyone was helping to install beds at which time the BOC conceptualized a home care system and implemented it successfully. We reached the milestone of 154, 000 home care patients under this programme”.
“Apart from this, the Bank set up a business Revival and Rehabilitation (BRR) department and expanded its operations to all provinces furthering its assistance to local business organisations to come back to life from the adverse effects of the pandemic, in addition to moratoriums.”
BRR unit has already accounted for over Rs. 30 billion worth of business revivals. It directly came to the balance sheet in addition to peripherals worth Rs. 17 billion.”
“So these were the significant milestones the Bank achieved during the critical period.”
“Today we face a number of issues and they could be even more severe in the ensuing year and we need to be mindful of that fact,” BOC chairman said.
To mark this special day, BOC symbolically launched “My Health” account emphasising its innovative spirit in delivering novel value additions to customers. The Bank also launched BOC Foreign Circle, a specialised unit geared to delivering superior quality to overseas based customers.
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