BOC Chairman looking at assets to raise revenue

The Bank of Ceylon (BOC) will look at its huge asset base and come up with a plan to generates revenue for the government. Dubbing the BOC as a ‘sleeping giant’ in terms of its asset base, the state bank’s new chairman Gamini Wickramasinghe said this week, “We have so much of ‘idle’ assets. We are sitting on Rs.400 billion worth of assets. No other bank comes close to us, but we are not doing sufficiently enough to reflect this asset base and I want to see that this asset base generates revenue for the government.”

He made these comments in a wide-ranging interview with The Sunday Times FT Discussing offshore banking – an option the bank is considering to raise funds to pay off Sri Lanka’s huge oil bill --, he said that simplicity, privacy, confidentiality and in certain circumstances taxation saving advantages came first. The majority of banks specialising in the provision of offshore bank accounts provide a greater degree of service to their customers as well as offering a greater degree of flexibility from an account structure and it can be this flexibility that most benefits a business bank account holder.

He said that a significant advantage of an offshore bank account is the fact that such structures are usually far more flexible and accessible, pay better interest rates, often have lower charges and can offer those who regularly travel for work or pleasure the flexibility they need from a bank account through which they can transact in multiple currencies and to which they can have access from anywhere in the world.

Explaining further, Wickramasinghe noted, “Sri Lanka gives more interest for foreign currency accounts than many countries. For an example, we give more interest for US Dollars than in the USA. We want to bring in more awareness about this specifically to harness the local diaspora and promote accounts such as non resident foreign currency accounts (NRFCs).”

He said that his objective is to project BOC as an international bank. “We want to have more vibrant international operations,” he said.
He was confident the BOC will make a ‘good’ profit this year, but was concerned about the ‘adverse economic activity’ in the country. “We will make a good profit, but the quantum of profit such as last year will be difficult, but I am here to make magic,” he said.

He further said that the country will come through from the current adverse situation. “We cannot afford to let it run like this, but there is only so much that we can plan and execute, because there are things that are beyond our control,” he said.

He said the BOC is also actively pursuing to reduce non performing assets (NPAs). “We are harnessing our 8,000 workforce to do so. It is not only a matter of recovering the loans, but also the interest,” he said, explaining that such recoveries will immediately reflect on the bottom line of the bank.

Wickramasinghe, who is also the Chairman of SEC said that he is uniquely placed, because he is in ‘both sides’ – developing capital markets, which is essentially making people invest and now at BOC, whose motto is to build a nation of savers. “I want to introduce a ‘mix’ where perhaps we can invest savings in the capital markets and distribute part as profits to the government and part as interest to the savers,” he explained.

Wickramasinghe said that he plans to stick to the same corporate plan, but will be making some relevant changes for the next six months such as enhancing the requirements for savings products.

“We need more deposits to offset some of the high interest costs, “ he said , adding that the bank is currently borrowing at high interest rates at inter bank level. “We want deposits to reduce it,” he further said.