BOC in the front line of reviving the economy: Chairman

By Sanath Nanayakkare

Bank of Ceylon Chairman Kanchana Ratwatte said in Colombo yesterday(12) that as the global pandemic had caused direct impacts on the national economy, the BoC had felt the need to come forward and help revive the economy without taking the easy option of doing little”.

He said so at a media briefing held to announce the financial results of the Bank for the first half of the year.

“We have a choice of not supporting the economy at this point and let things move on as they are. But we have made the difficult choice. For sure, things are not as they used to be, but I don’t believe that the government of Sri Lanka is going to default on any loans. I also don’t believe that the pandemic is going to stay on forever or tourists are not going to visit this country again. And for a moment I don’t believe that the economy is not going to bounce back. I see all the reasons to be confident about the favourable developments on all these fronts.”

Asked how the BoC could carry out that national responsibility on its own when other banks had pooled their resources to do it, and whether BOC was putting depositors’ funds at risk, he said, “No, not at all. There are certain situations where we go by way of syndicates. There are certain situations where we act as a syndicate and there are situations where we take up the responsibility on our own. If you are looking at the essential services, this is a time we can’t say ‘no’ and we won’t say ‘no’. As far as the BoC is concerned, the resources that we have are distributed in a very safe operation. We are not taking risks beyond our control. It is well within our control and that is why we are extending it. In doing so, we are looking at the short term, maybe two or three months or so. The IMF facility of USD 780 million and so many things are in the pipeline. In addition to that, the Bank is facilitating and empowering more exporters to emerge from the rural areas and we are looking at start-ups, SMEs, larger industries whoever is looking forward to joining with us to transform their businesses to be export-oriented.”

Referring to the Bank’s dollar liquidity levels, Ratwatte said, “The Bank of Ceylon has given first priority to the health sector, petroleum and pharmaceuticals sectors to open all of their letters of credit (LCs) to ensure that the society functioned unhindered at its normal pace. Then we ensured LC opening for importing vaccines, gas and essential food items. Next was our existing customer base whom we serviced without creating any problems for them. Then comes the situation where customers from other banks who come to BOC to open LCs in their time of difficulty that is also handled by the bank appropriately according to the purpose”.

“We don’t have an issue with regard to dollars when it comes to our customers or the priority areas I mentioned. In terms of dollar liquidity, we are okay to look after our customers for LC opening and we help new customers too,” the BoC chief said.

Amidst these unexpected challenges, the Bank’s Profit Before Tax for the six months ended 30th June 2021 stood at LKR 27.1 billion, moving forward with stable performance, while managing headwinds caused by low interest rates, cash-flow deferments and operational restrictions. Profit After Tax (PAT) for the period was LKR 22.1 billion. The Bank’s total assets grew by 11% and reached the LKR 3.3 trillion level reaching another milestone and preserving its industry leadership.