SDB bank records strong performance in challenging economic environment

The Year 2020 proved to be one of unprecedented economic change across the globe and in Sri Lanka, presenting significant challenges in all industries, particularly impacting the banking and financial services sector. 

Alongside the government and Central Bank-led economic revival measures mandated industry-wide on account of COVID-19, including credit moratoriums and policy rate reductions, SDB bank maintained a strong focus on digital transformation which helped them overcome the pandemic’s negative impact rapidly. The bank placed equal emphasis on non-performing advances management and streamlining processes to enhance efficiencies.

Identified by the bank as essential parameters in resuscitating the nationally critical SME sector, as it single-handedly accounts for 52% of total GDP, the bank transformed rapidly and went on to record a Profit of LKR 835 Million in 2020, amounting to a massive 229% increase in annual profit from 2019. 

Their strong performance was impacted heavily by numerous SDB bank-led initiatives in SME and co-operative development, including the partnership with The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) to provide free, one-on-one expert mentorship and technical knowledge to SMEs through a team of fully-qualified accountants, with SDB performing the key role of funding partner. The bank’s partnerships with MILCO in supporting dairy farmers and DIMO to extend support to agri-farmers through leasing promotions to secure agricultural equipment and machinery, represent programs of equal importance as part of their SME focus.

Active financial support of this nature offered to SMEs in far-flung areas, in addition to strengthening their entrepreneurial efforts plus helping them overcome the economic challenges experienced in 2020, assisted the bank in maintaining a Gross Non-Performing Advances Ratio of 4.54% in 2020, considerably lower than the industry figures for the period. This positive impact on financial performance has helped them maintain their SME-focused initiatives, thereby boosting the national economy considerably.