The document contains several news items related to the financial and economic situation in Sri Lanka in December 2012.
[1] It discusses the 21 point plan enumerated by the Central Bank Governor for bankers to follow, focusing on issues like risk management, corporate governance, succession planning and supporting economic growth.
[2] Other articles provide updates on the banking sector like relaxations in foreign exchange rules, Fitch's outlook for Sri Lankan banks in 2013, and the selection of Commercial Bank's annual report as the best in banking sector.
[3] The economic news items report Sri Lanka's GDP growth, inflation rates, and updates on sectors like tourism and external trade.
SBI Corporate Bond Fund: An Income Mutual Fund Scheme - Aug 16SBI Mutual Fund
SBI Corporate Bond Fund with moderate risk invests predominantly in corporate debt securities and aims to generate regular income over medium term. Mutual Fund investors can invest in this mutual fund via SIP or lump sum. Know more about this debt fund on SBI Mutual Fund website page https://www.sbimf.com/Products/DebtSchemes/SBI_Corporate_Bond_Fund.aspx
SBI Corporate Bond Fund: An Income Mutual Fund Scheme - Aug 16SBI Mutual Fund
SBI Corporate Bond Fund with moderate risk invests predominantly in corporate debt securities and aims to generate regular income over medium term. Mutual Fund investors can invest in this mutual fund via SIP or lump sum. Know more about this debt fund on SBI Mutual Fund website page https://www.sbimf.com/Products/DebtSchemes/SBI_Corporate_Bond_Fund.aspx
"Bad bank" is the only efficient strategy to restructure a bankBranko Greganovic
Setting up a separate "bad bank" processes and management structure is the only efficient strategy to restructure a bank because banks do not possess understanding, processes and structures required to manage NPL portfolios. A "bad bank" structure could be set up as a par of existing balance sheet, as a separate balance sheet in the same banking group or by selling the portfolio to a third party specialized in distressed asset management.
Non Performing Assets in Banks - Causes and Management - with a check list for Bank Branch Managers/Lending/Credit Managers/Audit Managers/Special Accounts Department Managers
Presentation on “Bad Loans in Indian Economy” was conducted by Eldhose Markose, Febin Bastin, Gayathri Babu, Gayathri Devi and Gopalakrishnan.K.A of DCSMAT MBA 16 on 16th March 2017 at DCSMAT Auditorium under the guidance and invigilation of Dr.Deepthi Sankar
The presentation included the real causes of Bad Loans, bad loan growth levels both in private and public sector banks and concluded with the drastic impact of Bad loans on Indian economy.
The presentation envisaged the real causes of BAD LOANS, bad loan growth levels both
in private and public sector banks and concluded with the drastic impact of BAD
loans in Indian economy
"Bad bank" is the only efficient strategy to restructure a bankBranko Greganovic
Setting up a separate "bad bank" processes and management structure is the only efficient strategy to restructure a bank because banks do not possess understanding, processes and structures required to manage NPL portfolios. A "bad bank" structure could be set up as a par of existing balance sheet, as a separate balance sheet in the same banking group or by selling the portfolio to a third party specialized in distressed asset management.
Non Performing Assets in Banks - Causes and Management - with a check list for Bank Branch Managers/Lending/Credit Managers/Audit Managers/Special Accounts Department Managers
Presentation on “Bad Loans in Indian Economy” was conducted by Eldhose Markose, Febin Bastin, Gayathri Babu, Gayathri Devi and Gopalakrishnan.K.A of DCSMAT MBA 16 on 16th March 2017 at DCSMAT Auditorium under the guidance and invigilation of Dr.Deepthi Sankar
The presentation included the real causes of Bad Loans, bad loan growth levels both in private and public sector banks and concluded with the drastic impact of Bad loans on Indian economy.
The presentation envisaged the real causes of BAD LOANS, bad loan growth levels both
in private and public sector banks and concluded with the drastic impact of BAD
loans in Indian economy
What are the Stimulating Factors Affecting NPL in Banking Sector of Banglades...ijtsrd
A well organized, well structured and developed financial sector ensures efficient allocation of financial resources and perks up the competitiveness of the private sector, thereby promoting investment and growth in the real sector. The thrust of the development is to improve the regulatory and governance environment and to enhance the ability of bank owners, management and regulators, and the markets themselves to provide for better governance and regulation to achieve the objectives. In this perspective, improvement of the situation of non performing loan is important. A high volume of non performing loan can never be a boon for the economy. Credit to economy is the main source for financial support of business. On the other side, banks have limited investment tools for their deposits. This study present results from an econometric analysis, favorably Random Effect Model, using pooled panel data collected from the central bank of Bangladesh categorizing four sectors of banking based on the pattern of ownership. Based on the analysis of the bank specific microeconomic factors, which are selected on the availability from reliable sources, used as the regressors, it is observed that the liquidity and the management soundness is more significantly affect the Non performing loan NPL in Bangladesh. Therefore, the recommendation is placed towards formulation policy instruments in favor of solvency rather liquidity. In addition to that, the improvement of managerial efficiency must be sought as well. Ratna Biswas | Mohammed Nazrul Islam | Chanu Gopal Ghosh ""What are the Stimulating Factors Affecting NPL in Banking Sector of Bangladesh? Evidence from Econometric Exercises"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020, URL: https://www.ijtsrd.com/papers/ijtsrd29861.pdf
Paper Url : https://www.ijtsrd.com/economics/financial-economics/29861/what-are-the-stimulating-factors-affecting-npl-in-banking-sector-of-bangladesh-evidence-from-econometric-exercises/ratna-biswas
Banking sector is going to be the most watched sector in the coming quarters. There are reasons for this, RBI has reduced the CRR rate and repo rates. The debt/GDP ratio of the Government is scary at 80% essentially meaning that the Government cannot borrow much without jeopardizing stability of banking sector. Given project is an attempt to identify and analyse the vision and mission of HDFC bank, as well as comparing the position and strategies of the bank with its major competitor.
Project:
Provides all the crucial information on HDFC Bank Limited required for business and competitor intelligence needs.
Contains a study of the major internal and external factors affecting HDFC Bank Limited in the form of a SWOT analysis as well as a breakdown and examination of strategies of HDFC Bank Limited.
Major factors contributing the success of HDFC.
Industrial analysis of HDFC through Porter’s five forces model as well as comparing that with its competitor ICICI.
Analysis done on BCG matrix
With this project we have tried to understand the different business process identified by the bank, as well as analyzing its strength and weakness as compared to other banks. Our project is mainly concentrated on the comparative analysis of HDFC and competitor ICICI. The source of information is secondary that is through internet and different newspapers and sites of HDFC and ICICI as well as some of the journals.
Foreign Exchange Activities of Southeast Bank Ltd.Faheem Hasan
This is the presentation slide of my internship report that I have completed for the partial requirement of my MBA degree. This slide is thoroughly monitored and supervised by Md. Mahmudul Huq sir. I have created this slide based on my internship at Southeast Bank Ltd (14th February - 12th May 2022). This slide is based on foreign exchange, foreign trade, imports, exports, analyses, remittances, etc. Please feel free to share this as much as possible.
2. CONTENTS
FINANCIAL SECTOR NEWS ECONOMIC & BUSINESS NEWS
Commercial Bank’s 2011 Annual Report Selected as the Best Sri Lanka Prosperity Index
‘Banking Sector’ Annual Report
Central Bank Governor, Enumerates 21 Point Plan for Bankers
Sri Lanka’s 3Q GDP Grows by 4.8%
Further Relaxations in Foreign Exchange CBSL Cuts Policy Rate by 25 Basis Points
Sri Lankan Banks : Fitch 2013 Outlook Sri Lanka Welcomes One Millionth Tourist
Bank Rating Outlooks 2013: China, India, Malaysia & Vietnam External Sector Performance - November 2012
Inflation - December 2012
Asia-Pacific Sovereign Credit Overview - Fitch Ratings
< Research & Development Unit >
4. Commercial Bank’s 2011 Annual Report Selected as the Best
‘Banking Sector’ Annual Report
Commercial Bank 2011 Annual Report won the following awards
at the "Excellence in Annual Reports Awards - 2012"
competition organized by The Institute of Chartered Accountants
of Sri Lanka.
Overall Category - Bronze Award (Joint)
Banking Sector - Gold Award
Corporate Governance Category - Silver Award
< Research & Development Unit >
5. Central Bank Governor, Enumerates 21 Point Plan for Bankers
Central Bank Governor, Ajith Nivard Cabraal
enumerated a “To Do List” for the Bankers to follow
diligently from 2013 onwards at the Bank Directors’
Symposium held on 12th December 2012.
1. Keep abreast of macro-economic factors, both national and international.
2. Ensure that all regulatory directions of the Central Bank are followed diligently.
3. Keep a close eye on the Bank’s capital adequacy - present and future.
4. Pay close attention to corporate governance - in particular, Board practices, top management
services, and regulatory responses.
5. Train staff continuously, so that they are prepared for the new developments in banking in the
evolving economy.
6. Upgrade Information Systems for the new levels of business. Cont.
< Research & Development Unit >
6. Central Bank Governor, Enumerates 21 Point Plan for Bankers (cont…)
7. Improve Risk Management Systems and pay close attention to local and international
trends, rather than individual “one-off” events.
8. Develop a corporate planning culture and practice it diligently.
9. Be conscious of “conglomerate” risk, if the Bank is a part of a group, or has associates.
10. Keep a close tab on the Bank’s international links and business partners with regular “know
your customer” updates.
11. Attempt to improve the Bank’s rating, with at least one upgrade each year.
12. Consider new opportunities, eg. investment banking, private banking services, fee based
services, etc., and try to introduce new services on a staggered basis.
13. Plan for management “succession” as a routine exercise, not as an exceptional effort.
14. Constantly search for productivity improvements, and tighten the interest spreads to improve
profitability.
Cont.
15. Encourage funding lines for the “5 Hubs + Tourism” initiatives of the country.
< Research & Development Unit >
7. Central Bank Governor, Enumerates 21 Point Plan for Bankers (cont…)
16. Maintain SME focus and use the Budget 2013 initiatives for SMEs’ effectively.
17. Support foreign remittance business, both from the sender and receiver angles.
18. Support lagging provinces’ growth, particularly Northern, Eastern and Uva Provinces.
19. Source foreign capital for Tier 1 and Tier 2 of the Bank, by using the balance sheet strengths
effectively.
20. Promote foreign capital inflows among the Bank’s clients, and help to bridge the savings gap
that is existing in the country, while using the new Exchange Control relaxations introduced by
Budget 2013, to the best effect.
21. Support local entrepreneurship and create new business leaders for the future.
Source: Central Bank of Sri Lanka
< Research & Development Unit >
8. Further Relaxations in Foreign Exchange
As per the Budget 2013 no approval is required from the
Exchange Control Department for:
I. Sri Lankan residents and Sri Lankan expatriates to transfer their foreign savings into Sri Lanka,
of which the rupee equivalent of USD 5 million will qualify for a 3 year tax holiday period.
II. Providers of goods and services to non residents to accept foreign currency if such receipts are:
III. Deposited in “Foreign Exchange Earners’ Accounts” in currencies of their choice in commercial
banks within 7 working days of the transaction, or
IV. Converted into Sri Lankan rupees
V. Corporate entities to borrow up to USD 10 million per year over the next 3 years, 2013 to 2015.
VI. Licensed commercial banks to borrow up to USD 50 million per year over the next 3 years, 2013 to
2015.
< Research & Development Unit >
9. Sri Lankan Banks : Fitch 2013 Outlook
According to Fitch, the Outlook on the National
Long-Term Ratings of most Sri Lankan banks is
Stable.
Fitch believes that domestic prospects should
still be sufficient to support a reasonable
performance and profile as the level of
penetration still remains low – although risk
management capacity and strength of franchises
is likely to be put to the test.
Cont.
< Research & Development Unit >
10. Sri Lankan Banks : Fitch 2013 Outlook (Cont…)
Economic Growth to Decelerate: Fitch forecasts Sri Lanka’s real GDP to fall to about 6.0%- 6.5% over 2012-2013, from
8.3% in 2011.
Loan Expansion to Moderate: Fitch expects the increase in lending to remain close to the 23% upper limit of the credit ceiling
in 2012.
Potential Rise in NPLs: The uptick in NPLs up to end-Q312 may continue, reflecting the impact of higher input costs, drought
and fragile external demand. NPL ratios could come under some pressure, but are unlikely to deteriorate to the peak
experienced in 2009.
Constrained Earnings: Fitch expects profitability to moderate due to dampened net interest margins amidst intense
competition for deposits and a potential rise in credit costs, as loan-loss reserves remain modest.
Higher Loans/Deposits Ratios: Loans/deposits ratios, which averaged 88% at 9M12, may continue to rise, as loan expansion
could still outpace that of deposits. Fitch believes that reliance on non-deposit sources may continue, including funding
obtained offshore, although deposits are likely to remain the main source of funding.
Stronger Capitalisation Needed: Greater capital buffers are needed to counterbalance structural balance sheet issues and to
absorb unexpected losses. Core capital formation is likely to be reliant on profit retention unless domestic equity markets
rebound. Source: 2013 Outlook: Asia-Pacific Banks - Fitch Ratings
Cont.
< Research & Development Unit >
11. Sri Lankan Banks : Fitch 2013 Outlook (Cont…)
< Research & Development Unit >
12. Bank Rating Outlooks 2013: China, India, Malaysia & Vietnam
Source: 2013 Outlook: Asia-Pacific Banks - Fitch Ratings
< Research & Development Unit >
14. Sri Lanka Prosperity Index
The SLPI is a multi-dimensional indicator reflecting the economic and social developments in
the country and the provinces on an annual basis.
2009 2010 Growth 2011
2010/09 Growth
Province
Index Rank Index Rank Index Rank 2011/10
Western 72.2 1 73.5 1 1.9 76.1 1 3.5
Central 54.5 3 56.7 3 4.1 58.3 3 2.9
Southern 56.8 2 57.8 2 1.8 60.0 2 3.7
Northern 48.9 9 51.8 9 5.8 55.6 6 7.5
Eastern 50.0 8 53.3 6 6.7 54.6 8 2.5
North Western 53.3 4 55.1 4 3.4 57.1 4 3.7
North Central 50.9 7 53.0 7 4.3 54.9 7 3.5
Uva 50.9 6 52.6 8 3.4 54.5 9 3.6
Sabaragamuwa 51.8 5 53.9 5 4.1 55.8 5 3.6
Sri Lanka 56.5 58.2 3.1 60.6 4.1
Source :Central Bank of Sri Lanka
< Research & Development Unit >
15. Sri Lanka’s 3Q GDP Grows by 4.8%
The Central Bank has revised Sri Lanka’s 2012 economic growth
target to 6.5% from an earlier 6.8% due to its tight monetary and
Third Quarter (3Q) fiscal policies, according to the bank’s Deputy Governor.
Sector 2011 (%) 2012 (%) Data released on 19.12.12 showed economic growth slowed to
Share Growth Share Growth nearly a three-year low of 4.8% in the 3Q, from 6.4% y-o-y growth
in the 2Q.
Agri, Forestry & Fishing 11.8 6.5 11.2 -0.5
Sri Lanka implemented sweeping policy measures to avert a
Industry 29.1 10.8 29.8 7.3 balance-of-payments crisis in 2012 by raising key policy rates twice
Services 59.1 7.8 59.0 4.6 since February and floating the rupee currency. The Central Bank
also kept a lid on credit growth while the government raised fuel
GDP 100.0 8.5 100.0 4.8
and electricity prices as part of an effort to contain the fiscal
deficit.
“As a result of those tightening measures and as well as some of
the supply side factors such as drought, the third quarter has been
the most affected quarter,” according to Mr. Nandalal
Weerasinghe, Deputy Central Bank Governor .“As a result, for the
whole year, CBSL have revised down the growth to 6.5% from the
earlier 6.8%. The global economy is also recovering, which means
our external sector could rebound.”
He stated the country would see a USD 100 mn balance of
payments surplus this year compared to a deficit of USD 1,061 mn
in 2011, and the current account deficit would be reduced to 5% of
the GDP this year compared to 8% in 2011.
Source: Reuters
Source: Census & Statistics Department < Research & Development Unit >
16. CBSL Cuts Policy Rate by 25 Basis Points
The Monetary Board of Central Previous Rate Rate w.e.f.
Bank of Sri Lanka has decided to (since 05.04.12) 12.12.12
reduce the policy rates by 25 basis
Repo 7.75 7.50
points each while allowing the
ceiling on rupee credit extended by RRepo 9.75 9.50
banks to expire at end 2012.
The Monetary Board was also of the view that the credit ceiling imposed for 2012 has
served its purpose and such a policy measure may not be required in the near future.
< Research & Development Unit >
17. Sri Lanka Welcomes One Millionth Tourist
Sri Lanka's tourist arrivals According to the tourism
rose 20.1% to 109,202 in promotion office, Sri
November 2012 from a Lanka is targeting 1.2 mn
year earlier with arrivals
tourist arrivals for 2013
between Jan-Nov up 16%
to 883,353. after welcoming a million
tourists in 2012 more
than it target of 950,000.
Tourism earnings for the
Jan-Nov period recorded
an increase of 23% to
USD 905.3 Mn compared
to USD 735.7 Mn in the
corresponding period of
2011.
< Research & Development Unit >
18. External Sector Performance Inflation
November 2012 December 2012
Jan. – Nov. 11’ Jan. – Nov. 12’ Growth % CCPI (%)
Category
US$ mn US$ mn Jan. – Nov. Month
Year on Year Annual Avg.
Exports 9,625.4 8,991.4 -6.6
Agricultural Products 2,316.6 2,114.1 -8.7 Nov 2012 9.5 7.2
Tea 1,357.9 1,273.6 -6.2
Dec 2012 9.2 7.6
Industrial Products 7,271.8 6,727.5 -7.5
Textiles and garments 3,809.1 3,633.3 -4.6
Rubber products 804.3 782.7 -2.7
Mineral Products 31.0 52.0 68.1
Imports 18,393.0 17,574.3 -4.5
Consumer Goods 3,328.3 2,755.0 -17.2
Intermediate Goods 11,114.9 10,701.6 -3.7
Petroleum 4,306.1 4,672.5 8.5
Textile and textile articles 2,118.8 2,072.6 -2.2
Investment Goods 3,904.4 4,090.9 4.8
Balance of Trade -8,767.6 -8,582.9 -2.1
Source: Central Bank of Sri Lanka
< Research & Development Unit >
19. Asia-Pacific Sovereign Credit Overview - Fitch Ratings
Sri Lanka
Foreign Currency (FC) and Local Currency
(LC) ratings affirmed at ‘BB-’ with a Stable
Outlook, May 2012
− Fiscal consolidation
Fitch expects emerging Asia’s macroeconomic performance as a − Strong growth, lower inflation
region to outperform global peers. Public finances remain weak
− Currency caused sharp Gross Govt. Debt
Emerging Asia is projected to remain the fastest-growing global (GGD) rise in 2012
region, with growth of 6%-6.5% a year until 2014. Policy tightening has eased BoP pressures,
Even excluding still fast-growing China (constituting 48% of but needs to be monitored
emerging Asia’s overall GDP), the rest of the region is expected to Key rating drivers
grow 5 % in 2012, picking up to 5.5% in 2013 and 6% in 2014, − Political stability
outpacing global emerging markets as a whole. − Policy consistency to deliver sustainable BoP
− Sustained strong growth; improvement to
Inflation for the whole region is expected to average 3.7% a year in investment climate
2012-2014, close to the 2001-2011 average of 3.6% and below the − Credible fiscal consolidation to put public debt on
average for all emerging markets of 4.8% a year. a more sustainable path
Cont.
< Research & Development Unit >
20. Asia-Pacific Sovereign Credit Overview - Fitch Ratings (Cont…)
Long-Term Foreign Currency IDR - BBB- Long-Term Foreign Currency IDR - A+
India China
The outlooks for long term Foreign Currency (FC) & Local
Negative outlook for Local Currency issuer default ratings
Currency (LC) issuer default ratings were revised to Negative
from Stable on 15 June 2012, which reflects risks that India’s given in April 2011 were affirmed in April 2012.
long-term growth prospects may deteriorate further and that the No “hard landing” in short term
fiscal consolidation process has slowed.
But rebalancing economy towards consumption poses
The economic outlook remains weak as real GDP continues to medium-term challenge
slow and inflation stays elevated.
What could trigger a LC downgrade?
India’s external financial position remains a rating strength, as
foreign-exchange reserves stood at USD295bn at end-October − Debt “migration” on to sovereign balance sheet from broader
2012, equal to six months of current external payments. This economy
provides India a key buffer during periods of higher global risk − Risks to financial stability
aversion
− More detail on policy in these areas may follow leadership
Reform measures (e.g. fuel price hikes, government divestment transition completion in March 2013 and affect outlook
and opening up of FDI) are encouraging but unlikely to generate resolution
an immediate growth dividend; some proposals still require
Ratings supported by sovereign balance sheet/FX reserves
legislative approval
Upsides: An acceleration in economic reforms and an improving
investment climate.
Downsides: A significant loosening in fiscal policy, particularly
ahead of the 2014 general elections
Cont.
< Research & Development Unit >
21. Asia-Pacific Sovereign Credit Overview - Fitch Ratings (Cont…)
Status Trend
Long-
Sovereign Term Public Macro Structural External Public Macro Structural External
Outlook
FC IDR* finances economics issues finances finances economics issues finances
Emerging Asia
Korea AA - Stable Neutral Neutral Weakness Neutral Positive Stable Stable Positive
Taiwan A+ Stable Neutral Strength Neutral Strength Stable Stable Stable Stable
China A+ Stable Neutral Strength Weakness Strength Negative Negative Negative Stable
Malaysia A- Stable Weakness Neutral Weakness Strength Negative Stable Stable Negative
Thailand BBB Stable Neutral Neutral Weakness Strength Stable Stable Stable Stable
Indonesia BBB - Stable Neutral Neutral Weakness Weakness Stable Stable Stable Stable
India BBB - Negative Weakness Neutral Weakness Strength Negative Negative Negative Negative
Philippines BB+ Stable Neutral Strength Weakness Strength Stable Stable Stable Stable
Sri Lanka BB- Stable Weakness Neutral Neutral Weakness Positive Stable Stable Negative
Mongolia B+ Stable Neutral Weakness Neutral Neutral Stable Stable Stable Stable
Vietnam B+ Stable Neutral Neutral Neutral Neutral Stable Positive Stable Positive
Developed Asia
Australia AAA Stable Strength Strength Neutral Weakness Stable Stable Stable Stable
Singapore AAA Stable Strength Neutral Neutral Strength Stable Stable Stable Stable
Hong Kong AA+ Stable Strength Strength Neutral Strength Stable Stable Stable Stable
New Zealand AA Stable Neutral Neutral Neutral Weakness Stable Stable Stable Stable
Japan A+ Negative Weakness Weakness Strength Strength Negative Stable Stable Stable
* Foreign Currency, Issuer Default Rating Source: Asia-Pacific Sovereign Credit Overview - Fitch
Ratings
< Research & Development Unit >
22. We wish all our Valued Readers a Very Happy Year
The views expressed in Economic Capsule are not necessarily those of the Management of Commercial Bank of Ceylon PLC
The information contained in this presentation has been drawn from sources that we believe to be reliable. However, while we have taken reasonable care to maintain accuracy/completeness of the
information, it should be noted that Commercial Bank of Ceylon PLC and/or its employees should not be held responsible, for providing the information or for losses or damages, financial or otherwise,
suffered in consequence of using such information for whatever purpose.
Research & Development Unit