In an exclusive interview with Global CEO Magazine, Mr Naleen Edirisinghe, the Director/CEO of Pan Asia Bank, shares insights on “Banking Beyond Borders: Navigating Economic Growth and Stability.”
Pan Asia Bank plays a crucial role in supporting Sri Lanka’s economic development and stability through collaboration with the central bank and other financial institutions. By fostering cooperation, initiating lending programmes, and prioritising financial inclusivity, the bank contributes to sustainable growth and stability.
Mr. Edirisinghe highlights the bank’s proactive approach to managing challenges in the global economy, emphasising diversification, risk management, and technological innovation. Moreover, he discusses the bank’s commitment to leveraging digitalisation, promoting financial inclusion, and integrating sustainability principles into its operations to drive economic development locally and globally.
Through strategic initiatives and a focus on innovation and sustainability, Pan Asia Bank aims to enhance its performance, competitiveness, and growth trajectory in the coming years, aligning with its vision of responsible and future-ready banking.
Q. How does your Bank collaborate with the Central Bank of Sri Lanka (CBSL) and other financial institutions to support economic growth and stability in the country, and what initiatives have been particularly successful in driving this collaboration?
Fostering cooperation with the Central Bank and other financial organisations is essential to our mission of assisting Sri Lanka’s economic development and stability. We recognise that a well-functioning financial environment is essential to promoting sustainable and equitable development.
Regular conversations and partnerships are part of our engagement with the Central Bank to ensure that our policies are in line with the nation’s larger macro economic objectives. This include taking part in talks on monetary policy, offering suggestions for regulatory frameworks and carrying out programmes to improve financial stability and inclusiveness.
To support economic growth, prioritising the welfare and financial well-being of the Sri Lankan populace is paramount. As a Bank we understand the need to be resourceful and innovative when it comes to the products we provide. For example, we provide special loans to government pensioners, this particular loan product is intended to give pensioners the ability easily access affordable financing solutions, enabling them to improve their standard of living and reach their financial objectives. Furthermore, as well as a special savings account that offer high interest rates with the flexibility to withdraw funds at any given moment. By providing these products to the Sri Lankan people, we are giving attention to individuals who have been overlooked.
In addition, we proactively participate in lending programmes that the Central Bank has regulated to help strategic sectors such as export-oriented industries, small and medium-sized enterprises, and farmers. We reduce risks associated with lending to priority industries and at the same time encourage economic activity by employing such measures.
Our combined efforts with the Central Bank and other financial institutions illustrate how dedicated we are towards the stability and economic growth of Sri Lanka. We strive to shape the country’s financial environment by engaging in partnership, constant communication, and creative endeavours.
Q. In an increasingly interconnected global economy, how does your Bank navigate challenges and opportunities arising from international markets and cross-border transactions and what strategies do you employ to ensure, resilience and sustainability in the face of external economic factors?
Our Bank takes a positive approach to managing the challenges of a global economy that is interconnected. We are open to providing our services within and outside Sri Lanka as there are major opportunities that we can take advantage of especially when it comes to importing, exporting and investments.
Firstly, we recognise the significance of diversification of revenue streams. Our objective is to minimise the dependence on any particular market or industry by spreading our portfolio across many industries. This way we can safeguard against volatility and help us navigate through difficult economic conditions in certain areas or industries whether it has to do with international markets or local.
Additionally, our risk management frameworks play an important role. We identify, assess, and reduce the risks associated with cross-border transactions, including currency risk, geopolitical risk and regulatory risk. For example, to reduce the risk that is brought about from currency fluctuations in exchange rates, we utilise hedging techniques and derivatives to effectively control our exposure to currency changes and protect our financial performance which is an important aspect taking into account the current economic situation.
Additionally, we give a lot of weight towards conducting our due diligence when it comes to credit and the risk of transactions is given a thorough review. To decrease the chances of default or simply non-compliance, we run very in-depth audits on economic health, reputation, and legal requirements.
Finally, technology serves as the foundation in our strategy. As such, we are able to cut operational hazards, boost operational performance and drastically slash on border dealings. With our advanced tech capabilities, we can react in an instant, implementing the right response to volatile market conditions. Also, our cyber protection operations are the major blocks in terms of securing personal financial information and providing security against cyber incidents during cross-border trading as well. We provide the up-to-date cybersecurity standard, including intrusion detection system and encryption to build and reinforce our defence mechanism against various types cyber-attacks.
Q. With the rapid advancement of digital technology and fintech innovations, how is your Bank leveraging digitalisation and technological advancements to enhance banking services, improve financial inclusion and contribute to economic development both locally and globally?
As the CEO of Pan Asia Bank, I am proud to say that we are growing exponentially in terms of leveraging digitalisation and make use of the current technological advancements in order to upgrade our financial services and drive economic growth in Sri Lanka.
The development of our online banking systems is one of the main ways we’re utilising digital technology. We’ve made significant investments in creating intuitive online and mobile banking programmes and portals that provide a broad variety of services, including bill payment, loan applications and account management and cash transfers. These digital platforms give our clients accessibility and convenience while also enabling them to handle their money more skilfully, wherever they may be.
In terms of our global digitisation, our initiatives embrace and promote international commerce and enabling cross-border transactions, which in turn are aiding in economic development. Businesses can easily make transactions in various currencies, expedite trade finance procedures and reach foreign markets. These secured payment systems allow the customer to confidently and efficiently make payment abroad in a safe and secure manner.
Q. What strategies does your Bank employ for provisioning Stage III non-performing loans and how does this contribute to maintaining financial stability and regulatory compliance?
For Pan Asia Bank, managing Stage III non-performing loans (NPLs) is essential to preserving both financial stability and regulatory compliance. To properly prepare for Stage III NPLs while maintaining regulatory compliance and preserving our financial stability, we use a number of strategies and utilise regulated provisions.
Our top priority is to identify and evaluate possible credit concerns as early as possible. By utilising strong monitoring systems and thorough borrower research, we aim to identify financial distress indicators as soon as feasible. This makes it possible for us to take proactive steps to reduce risks and stop loans from falling into non-performing status, including loan restructuring or improved oversight.
To help borrowers who are having financial difficulties, we also place a strong emphasis on proactive debt restructuring and rehabilitation initiatives. We work closely with borrowers to address their issues and rehabilitate loans in order to lessen the negative effects of non-performing assets on our balance sheet.
In terms of provisioning, we adhere to policies aligned with regulatory standards set by the Central Bank of Sri Lanka. This involves setting aside enough provisions based on our evaluation of the expected credit losses connected with Stage III NPLs. Our practices in terms of provisions are transparent, which are regularly reported to the Central Bank and our stakeholders, ensuring our compliance with regulatory requirements is important as fostering trust and confidence is fundamental in our financial reporting.
Q. Sustainability and Environmental, Social and Governance (ESG) considerations are becoming increasingly important in the banking sector. How does your Bank integrate sustainability principles into its operations, investment decisions and corporate strategy to promote long-term economic resilience and responsible banking practices?
Being “The Truly Sri Lankan Bank”, a fundamental element of Pan Asia Bank’s dedication to ethical banking practices and sustained economic viability are the incorporation of sustainability principles into our corporate strategy, investment choices, and day-to-day activities. In order to generate value for our stakeholders and advance societal well-being, we firmly believe sustainable banking is more than just a trend but a key component building a sustainable economic landscape.
We adopt a thorough process when it comes to making investment decisions, which includes thorough ESG analyses. We carefully consider the project or the possible effects on the environment and society, as well as its governance framework and risk management procedures, before making any investments. As a pioneer in green lending, we continued with green financing projects such as solar power producers and drip irrigation and many more. Being one of the pioneers in green lending, one of the main sustainable banking products we provide is loans for individuals who want to implement solar panels into their homes and our aim is to channel capital towards endeavours that promote positive societal outcomes and contribute to sustainable development goals. Furthermore, we regularly articulate our Social Environment and Management Systems (SEMS) policy with all credit facilities based on a SEMS approval.
We, at Pan Asia Bank, believe that community engagement and social impact are an important aspect of our ethical banking strategy. We continuously involve ourselves with local communities and civil society groups to help foster meaningful impacts into people’s lives. To mention a few, the bank partnered the “Dear Father” project initiated by the Department of Samurdhi Development, Rotary Club and Women’s International Foundation, which was a campaign to promote social empowerment through the involvement Samurdhi development officers, by using them as Change Agents in the advancement of financial literacy and social empowerment. Moreover, Pan Asia Bank initiated the “Bring a Smile” project, which was project that supported needy schools and thousands of students, aimed at improving educational quality and future readiness. Finally, in collaboration with Master Card International, we organised the Pan Asia Master Card Champions Trophy, a football competition involving eighteen schools in the Vavuniya District which was a medium for young talent, a means of building trust, and a platform for healthy competition.
It is important for us as a bank to resonate with our brand image which is being “The Truly Sri Lankan Bank” and we can only achieve this by continuing to invest into CSR and ESG projects that not only provide financial benefits but to also build a united country that will eventually lead to economic growth.
Q: As a leader in the banking industry, what role do you see your bank playing in driving innovation, fostering entrepreneurship, and supporting small and medium-sized enterprises (SMEs) to stimulate economic growth and create employment opportunities within the country and beyond?
As an emerging leader in financial services profession, we are aware of the importance of innovation, entrepreneurship, and SME support in the economic growth, job creation, and the inclusive development. We, at our bank, are dedicated to using our knowledge, resources, and connections to help Small and Medium Enterprises (SMEs) to achieve their growth goals both within the country and abroad through empowering entrepreneurs, promoting innovation, and facilitating their access to finance.
Encouraging creativity and teamwork within Pan Asia Bank is one of the main ways we promote innovation. We motivate our employees to break the norm, try new approaches and embrace the advancement of technology to improve our products, services and workflow. We create an open environment where employees can present their innovative ideas and join forces with external partners including startups and technology companies to build a culture of continuous improvement and stay ahead of the competition.
Additionally, we will continue to contribute to the development of entrepreneurship through the provision of customised financial products, consultancy services, and mentorship programmes to the budding entrepreneurs and SMEs. We recognise the fact that the access to financing has grown to be difficult due to the economic situation and is one of the major obstacles for SMEs, especially in emerging markets, and we are determined in overcoming this issue through the offering of flexible financing solutions including SME loans, as well as trade finance facilities. Likewise, we will continue to build networking channels that enable SMEs to enlarge their businesses, penetrate into new markets and create employment within the community.
Q: Over the last few years, what key initiatives has your bank implemented to enhance its performance and competitiveness in the global market? Looking ahead, what are your expectations for your bank’s performance and growth in the coming years, particularly in the context of expanding operations beyond borders?
The last few years have witnessed our bank adopting several fundamental actions to raise its performance and competitiveness in the Sri Lankan market. These actions are the guarantee of continued growth and prosperity. These initiatives have been mostly related to innovation, digital transformation and strategic partnerships.
In the future, we will be focusing more on digital innovation, customer-centricity and sustainable growth. We are looking to develop and strengthen our digital capabilities all the while extending the range of our products and brands and to deepen our relationships with customers so as to increase our revenues and market share.
Additionally, we have put our efforts in the development of our workforce and organisational agility that allow us to adapt to the dynamic market environment and take advantage of the opportunities that are emerging. Through the creation of a culture that is based on innovation, agility, and the continuous learning, our members of staff are enabled to think creatively, accept change and drive the bank’s growth agenda.
Besides this, sustainability and environmental consciousness will continue to be on the top of our list as the core principles of our corporate philosophy. Through including ESG factors (environmental, social and governance) into our operations and decision making process, we expect to develop long-term benefits for our stakeholders, mitigate risks and enhance our reputation as a trustworthy and responsible banking institution.
