On the same basis, assets rose by 24.38% and the group’s RoE was boosted to 17.44% from 12.73% in 2005.
In the face of tough competition, CBC was able to maintain its lead position as the best capitalised bank in Sri Lanka. The group’s success was recognised by foreign investors on a roadshow organised in Singapore, as reflected in the growth of its share price over the year. CBC further strengthened its capital base with a rights issue to improve its Tier 1 ratio. It also raised capital through the issue of unsecured subordinated redeemable five-year debentures, just before interest rates peaked. This was the first time that a local bank raised long-term capital in foreign currency, by mobilising $10m with a five-year bond.
CBC operates Sri Lanka’s largest ATM network, whose software was upgraded to enable customers of selected non-bank institutions to withdraw cash from the network. The group also expanded its presence in countries with large Sri Lankan expatriate populations in a cost-capital effective manner, yielding a major increase in remittances. It implemented Sri Lanka’s first online facility to view images of cleared and paid cheques, permitting ‘all-weather’, uninterrupted customer service. The bank introduced the Model Bank Concept at selected branches to improve standards, setting benchmarks for other branch offices.
“We are very pleased to regain our position as Bank of the Year in Sri Lanka, after winning it for five successive years until 2005,” says managing director Amitha Gooneratne. “We significantly improved capital adequacy through a rights issue and overcame the perennial burden of the undefined pension liability by taking a one-off charge to introduce a pension buy-back scheme, which was accepted by more than 99% of the staff.
“Our commitment to safeguarding interests of all stakeholders continues and this policy has helped us to become the largest private sector bank in this country.”
