In a recent interview with The Global CEO Magazine, Mr Sanath Manatunge, the Managing Director/CEO of Commercial Bank, shared insights on “Banking Beyond Borders: Navigating Economic Growth and Stability.”
As a leader in the banking industry, Mr. Manatunge discussed the pivotal role of Commercial Bank in driving innovation, fostering entrepreneurship, and supporting small and medium-sized enterprises (SMEs) to stimulate economic growth locally and globally. He highlighted the bank’s strategic collaborations with key financial institutions and governmental bodies to promote economic growth and stability in Sri Lanka.
Additionally, Mr. Manatunge elaborated on the bank’s initiatives to leverage digitalisation and technological advancements for enhancing banking services, improving financial inclusion, and contributing to economic development. Moreover, he shed light on the bank’s expansion beyond Sri Lanka’s borders, emphasising its efforts to strengthen its international presence and competitiveness in the global market. Through strategic investments, innovative platforms, and sustainable growth strategies, Commercial Bank of Ceylon aims to drive value creation for its customers, stakeholders, and communities, positioning itself as a leading regional bank in the years ahead.
THROUGH STRATEGIC INVESTMENTS, INNOVATIVE PLATFORMS, AND SUSTAINABLE GROWTH STRATEGIES, COMMERCIAL BANK OF CEYLON PLC AIMS TO DRIVE VALUE
CREATION FOR ITS CUSTOMERS, STAKEHOLDERS, AND COMMUNITIES, POSITIONING
ITSELF AS A LEADING REGIONAL BANK IN THE YEARS AHEAD.
Q: How does your bank collaborate with the Central Bank and other financial institutions to support economic growth and stability within the country, and what initiatives have been particularly successful in driving this collaboration?
At Commercial Bank, we pride ourselves on our strategic collaborations with key financial institutions and governmental bodies to drive economic growth and stability in Sri Lanka. Our partnership with the Central Bank of Sri Lanka (CBSL) as the main industry regulator, exemplifies this commitment. Working closely with the CBSL, the banking community has successfully empowered Sri Lankan businesses with essential financial literacy skills and financial rehabilitation facilities.
In partnership with the International Finance Corporation (IFC), we have launched ‘Commercial Bank LEAP Global Linker,’ a platform connecting local businesses with global markets. This initiative reflects our commitment to fostering entrepreneurship and facilitating international trade, while our joint efforts with the IFC Women in Work programme aim to improve women’s access to finance and enhance financial literacy.
Our collaborations with global organisations have facilitated access to various credit lines, the funds which have been utilised to empower and enrich local businesses with emphasis on priority sectors such as renewable energy and on special need industries such as SME’s manufacturing and women owned enterprises.
Furthermore, our collaborations with government institutions such as the Ministry of Industry and Commerce and Export Development Board (EDB) and Industrial Development Board (IDB) enable us to provide tailored financial solutions to various sectors, including manufacturing, trading, and agriculture.
By supporting exporters through partnerships with industry associations, we contribute to the competitiveness of SMEs in the global market. Our collaborative approach with the Central Bank, financial institutions, governmental bodies, and industry associations underscores our commitment to driving economic prosperity and empowering businesses and entrepreneurs across Sri Lanka. Through innovative initiatives and targeted interventions, we continue to play a pivotal role in shaping the country’s economic landscape and fostering sustainable development.
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?
As a leading bank, which had been in the international trade for decades, we understand the complexities of navigating challenges and seizing opportunities in the interconnected global economy. Our approach to addressing risks arising from sovereign exposures and international cross-border business involves innovative strategies and leveraging our strong reputation in the international community. When faced with challenges related to sovereign risk, we proactively engage with our long-term partners to secure liquidity and credit support for our trade business.
FURTHERMORE, OUR COLLABORATIONS WITH GOVERNMENT INSTITUTIONS SUCH
AS THE MINISTRY OF INDUSTRY AND COMMERCE AND EXPORT DEVELOPMENT BOARD
(EDB) AND INDUSTRIAL DEVELOPMENT BOARD (IDB) ENABLE US TO PROVIDE TAILORED FINANCIAL SOLUTIONS TO VARIOUS SECTORS, INCLUDING MANUFACTURING,TRADING, AND AGRICULTURE.
This ensures that we maintain our commitments and obligations in a timely and efficient manner, thereby safeguarding our resilience and sustainability amidst external economic factors. Our ability to adapt and innovate in response to evolving market conditions underscores our commitment to serving our customers and stakeholders effectively, even in the face of uncertainty. By continuously evaluating and adjusting our strategies, we remain well-positioned to navigate the complexities of the global economy and capitalise on emerging opportunities for growth and development.
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?
We recognise the transformative impact of digital technology and fintech innovations on the global banking landscape. In response to the rapid advancement of digitalisation, we have implemented comprehensive strategies to leverage technology and to promote financial inclusion. One of our key initiatives is the investment in robust digital banking platforms, including ComBank Digital, Q+ payment app, Flash and ePassbook apps. These platforms offer a wide range of banking services accessible through iOS, Android, and HarmonyOS operating systems.
Our commitment to international standards and best practices ensures utmost user security and convenient access to banking services anytime, anywhere. We are proud to have introduced Sri Lanka’s first “wearable banking” solution for Apple devices, integrating Internet of Things (IoT) technology to provide enhanced features through our ‘Flash’ Digital Account. Our flagship digital platform ComBank Digital, is the most used digital banking platform with the highest market penetration and is now offered with trilingual capabilities.
To enhance customer digital experience, we have inaugurated the first ‘DigiZone’ at our Wellawatte branch, offering hands-on experience with digital banking services. Equipped with Wi-Fi-enabled devices, customers can explore digital apps, open accounts, and conduct transactions. Additionally, we conduct various educational sessions on digital banking to improve digital literacy, particularly among the younger generation. Recognising the growing demand for 24/7 access to banking services across multiple channels, we prioritise customer-centric approaches and invest heavily in digital transformation. Our focus on personalised and frictionless interactions is evident through the integration of Robotic Process Automation (RPA) technology and Customer Relationship Management (CRM) solutions, ensuring seamless experiences and operational efficiency.
We also prioritise data analytics and personalization, utilising AI to understand customer behaviour, offer personalised banking experiences, and detect fraud proactively.
Our commitment to cyber security is paramount, and we implement robust measures to protect customer data and financial transactions. We invest in advanced technologies, conduct regular security audits, and provide employee training to safeguard against cyber threats.
In line with our economic development initiatives, such as ComLEAP for SME support and investment in digital infrastructure projects, we strive to foster entrepreneurship and contribute to economic growth locally and globally. Through our focus on digital transformation, we aim to create an inclusive digital economy, nurture IT talent, and promote digital literacy for sustainable growth and development. By implementing these strategies; the Commercial Bank of Ceylon is at the forefront of enhancing banking services, promoting financial inclusion, and driving economic development in the digital age.
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?
As a bank committed to maintaining financial stability and regulatory compliance, we employ strategies for provisioning Stage III non-performing loans in line with regulatory guidelines, ensuring prudent risk management and safeguarding depositors’ funds.
Our risk management framework enables us to identify potential risks of loans becoming non-performing at an early stage. Loans and advances meeting specific criteria are classified as Stage III in accordance with IFRS 09 /SLFRS 09 and CBSL guidelines. This classification is crucial for timely provisioning and risk mitigation.
We have developed models to determine adequate loan loss provisions for Stage III loans, considering factors such as historical loss experiences, collateral values, economic conditions, and industry trends. During volatile periods, we exercise expert credit judgments to make prudent provisions beyond model requirements, by way of management overlays enhancing our provision cover for Stage III loans and advances.
Our objective is to mitigate the impact of non-performing loans on our financial stability, safeguarding depositors’ funds and contributing to the stability of the overall financial system. Additionally, periodic stress tests assess potential impacts on loan portfolios, aiding in determining adequate provisioning levels to withstand adverse scenarios.
Our policies and procedure manuals facilitate compliance, while internal audit and risk management teams, along with external auditors, conduct independent verifications to assess the effectiveness of our provisioning process and compliance with regulatory standards.
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?
As a Bank deeply committed to sustainability and responsible banking practices, we have integrated sustainability principles into our operations, investment decisions, and corporate strategy through a structured approach guided by our Executive Sustainability Committee.
The committee is tasked with strategic formulation and guidance, ensuring that sustainability remains central to our corporate agenda. The insights and directions developed by this committee are then translated into actionable plans by our Sustainability Working Committee, which includes specialist units such as Sustainability, Risk, SME banking, Services, Corporate Banking, Digital Banking, Marketing and Personal Banking.
These plans are meticulously aligned with our overall objectives and operational capabilities, and specific Key Performance Indicators (KPIs) are provided to ensure the integration of sustainability into every product and service. The Sustainability Working Committee and Executive Sustainability Committee review these KPIs quarterly, ensuring a systematic approach towards sustainability across the organisation.
Our business units and future force members, comprising over 300 members from various branches and departments, play a crucial role in the implementation phase, embedding sustainability strategies into their daily operations to promote long-term economic resilience and responsible banking practices.
To further underscore our commitment to sustainability, we have established a Social and Environment Management System (SEMS), implemented a green banking policy, and introduced various other policies aimed at harmonising sustainability with our operational framework.
We take pride in being the first carbon-neutral bank in Sri Lanka, demonstrating our dedication to minimising our operational footprint and leading the way in sustainable banking practices. Further demonstrating our commitment to sustainability, the Bank recently unveiled an evolved logo with a green element.
Through these initiatives, we strive to not only meet regulatory requirements but also exceed industry standards, fostering a culture of sustainability and responsible banking that benefits our stakeholders, our communities, and the environment for generations to come.
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 borders?
As the largest private bank in the country, Commercial Bank recognises its pivotal role 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.
At Commercial Bank, we are deeply committed to promoting innovation in every aspect of our business, particularly in enhancing customer service and strengthening relationships. We invest significantly in broadening our presence in the SME sector, with a focus on providing dedicated resources, novel products and services, and technological capabilities to support businesses, especially during challenging times.
Our efforts have been recognised by the Ministry of Finance, consecutively naming us as the highest lender to the SME sector for 3 consecutive years, showcasing our unwavering commitment to the national economy. We adopt a structured approach in developing Micro, SMEs (MSMEs) to the corporate level, offering both financial and non-financial services.
Through collaborative assistance with external organisations, we engage with the MSME sector to create new market opportunities and provide capacity development support. In line with our commitment to supporting SMEs, we have launched an ‘Exporter Grooming Programme’ aimed at grooming identified SMEs to become direct exporters.
We collaborate closely with government and other organisations to advance this initiative, fostering economic growth through export promotion. Moreover, we have introduced the comprehensive digital business ecosystem ‘Commercial Bank LEAP GlobalLinker’, providing the business community with a platform to interact and engage with like-minded counterparts globally. This ecosystem offers a wide range of services, including networking, building partnerships, and ensuring reliability in business relationships. Through this platform, local SMEs have direct access to over 370,000 global businesses representing 152+ countries, facilitating international trade and collaboration. Commercial Bank remains dedicated to driving innovation, fostering entrepreneurship, and supporting SMEs to stimulate economic growth and create employment opportunities.
Our holistic approach encompasses financial support, capacity development, export promotion, and digital innovation, empowering businesses to thrive locally and globally.
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?
Over the last few years, Commercial Bank has undertaken key initiatives to enhance its performance and competitiveness in the global market, solidifying its position as a leader in the banking industry.
Notably, our expansion beyond Sri Lanka’s borders began with the acquisition of the Bangladesh operations of Crédit Agricole Indosuez in 2003, marking our entry into international markets.
Since then, we have successfully expanded our overseas presence, establishing subsidiaries in the Maldives and Myanmar. Our international operations have flourished, contributing significantly to our overall success, with overseas assets making a substantial contribution to pre-tax profits.
Through targeted investments and strategic partnerships, we have strengthened our foothold in key markets, leveraging local expertise and market insights to capitalise on emerging opportunities. Our international expansion strategy not only diversifies our revenue streams but also enhances our resilience to regional market fluctuations, positioning us for sustained growth and profitability in the long term.
As an established regional bank, we are actively seeking opportunities for inorganic growth and regional expansion, while also aiming for organic growth in Sri Lanka, Bangladesh, the Maldives, and Myanmar.
Looking ahead, we remain committed to driving innovation, fostering entrepreneurship, and expanding our operations beyond borders. With a focus on strategic investments, market insights, and sustainable growth strategies, we expect to further strengthen our position as a leading regional bank, delivering value to our customers, stakeholders, and communities in the years to come.
