In a rapidly evolving global economy, leadership in the finance sector demands resilience, adaptability, and innovation.

Global CEO Magazine had the privilege of speaking with Mr K.G. Leelananda, the CEO and Executive Director of LCB Finance PLC, a company that has demonstrated remarkable growth since its inception in 2016.

In this insightful interview, Mr K. G. Leelananda shares the journey of LCB Finance, from its humble beginnings in Sri Lanka’s Southern region to becoming a fully-fledged finance company with global ambitions.

He also delves into the strategies he employed to steer the company through the challenges posed by the pandemic and economic crises, highlighting the importance of leadership, team collaboration, and adaptability in navigating uncertain times.

Moreover, Leelananda discusses the company’s recent expansion into Myanmar, reflecting on the opportunities and challenges of balancing local and international growth. Through his experience and leadership approach, we gain valuable insights into what it takes to succeed in today’s competitive finance industry.

Q: Before delving into leadership, I’d like to begin with few questions in relation to your organisation. You’ve won numerous accolades throughout your journey, and just last year, you won the award for the fastest-growing finance company in Sri Lanka. Recently, you’ve gone global as well. Could you tell us a bit more about your organisation and its growth?

KGL: Thank you for the opportunity. Yes, LCB Finance PLC started in 2016 in the South of Sri Lanka. It’s a significant milestone as it was the first time a finance or banking company was established in the Southern Region of Sri Lanka’s economy. From 2016 to 2018, we operated as a standard finance company. In 2018, I developed a five-year business plan and applied for a Finance licence from the Central Bank of Sri Lanka . The Central Bank responded by transferring the licence that was granted to an inactive finance company named City Finance Corporation Limited. During the same year, with the active participation of the Board of Directors , we were able to reactivate the said company changing its business name to our current business name. Since then, with the approval of the Central Bank of Sri Lanka we have established 20 branches.

A notable aspect is that all our stakeholders islandwide have invested permitting us to reach a share capital of Rs 2.5 Billion, primarily from investors in the Galle District. In 2021, we listed our shares on the Colombo Stock Exchange (CSE) as a public limited liability company through an Initial Public Offering (IPO), issuing shares worth 500 Million Rupees. Due to our financial soundness, transparency, and growth, the IPO was oversubscribed, reaching one Billion Rupees. This was a historic achievement for us being a company from the Southern Province entering the Colombo Stock Exchange.

Now, we are a fully-fledged finance company in Sri Lanka.

Q: In recent years, Sri Lanka has faced many challenges, including the pandemic and economic disruptions. Some believe that only large, well-established organisations can navigate such difficulties. How did you manage to guide your company through these times?

KGL: The finance sector is always challenging, as a CEO, in this sector it’s vital to manage these challenges. In my organisation I focused on financial strategies that needed to be adopted by our corporate team and held one-on-one meetings with them. This process ensured that everyone understood the company’s goals, their tasks and how to navigate the company’s business activities under difficult situations.

During the pandemic, our borrowers encountered difficulties in meeting their repayment commitments, which affected our cash inflow and outflow. We had to closely monitor and manage this situation . My Corporate Management Team and I worked together, making collective decisions offering concessions in line with the regulatory guidelines and helping the borrowers to avoid default on their commitments with success.

We also introduced a sense of ownership among staff by offering them shares in the company, creating a personal investment towards the success of the company’s growth.
During the pandemic, I introduced cost control measures which the staff implemented successfully. This collaborative approach, along with transparent regular communication, and commitment allowed us to maintain growth and financial stability.

Q: It’s impressive that your team consented to a temporary salary cut. Besides these strategies, have you made any organisational changes or innovations to handle the ongoing challenges in your sector?

KGL: Absolutely. The finance and banking sector requires constant updates. We closely monitor global market trends, the Central Bank, and share markets. Our IT and MIS divisions play a crucial role in analysing various factors, including industry averages and international trends. Our experienced Corporate Heads also contribute their insights.

In this sector, we are heavily reliant on our customers, borrowers, and depositors, which means maintaining industry norms is essential. My team’s efforts, combined with regular reviews and monitoring, ensure we stay aligned with these norms.

Q: You can implement many strategies and innovations, but without effective leadership, they may not be as impactful. In your opinion, what are the key qualities a leader should possess during uncertain times?

KGL: A good leader must be a good listener. As a CEO, I cannot run the company alone—I need the support of my team. In our finance company, I challenge my Corporate Heads, and they, in turn, provide maximum effort. The CEO provides direction, but it’s the team that runs the company.

Additionally, the CEO must be responsible to the Board of Directors and the Central Bank. We prepare a five-year budget and monitor progress monthly and annually. To achieve our goals, the CEO must give clear directives and listen to the team’s input.

Q: Looking ahead, how do you see Sri Lanka’s business environment evolving over the next five years?

KGL: That’s an important question. With the new President and potential parliamentary majority, we expect positive changes. There’s a strong desire to eliminate corruption, which should lead to better governance. The tourism and agriculture sectors hold significant potential, and if properly developed, they could greatly enhance our economy, reduce living costs, and increase foreign currency.

In addition, we’ve received positive signals from Japan about potential investments, particularly in infrastructure projects like monorails. These developments suggest a brighter economic future for Sri Lanka.

Q: Finally, you recently opened a branch in Myanmar, marking your company’s global expansion. How do you plan to balance local and global challenges and opportunities?

KGL: Yes, we opened a branch in Myanmar under our parent company, LCB Limited. The process was straightforward, and the Central Bank of Myanmar was very cooperative. I noticed a stark difference compared to Sri Lanka—within a week, we received all the necessary licences.

Globally, there are vast opportunities. In Myanmar, for example, we’ve seen recovery rates exceed 100%. The local population is disciplined and responsible, which has contributed to our success there. We are exploring more international opportunities and are in discussions with Japanese investors to expand further. However, we must maintain transparency and sound financial practices to attract global investment.

We are optimistic about both our local and global prospects.