The DFCC Group reported an excellent half year performance for 2017, with DFCC Bank leading the charge on the back of its strategic growth drive as a rapidly emerging full service commercial bank.
The DFCC Group comprises DFCC Bank PLC (DFCC) and its subsidiaries, Lanka Industrial Estates Limited (LINDEL), DFCC Consulting (Pvt) Limited (DCPL) and Synapsys Limited (SL), a joint venture company, Acuity Partners (Pvt) Limited (APL) and Associate Company, National Asset Management Limited (NAMAL).
DFCC Group recorded profit before tax of LKR 3,616 million in the first six months of 2017, a 68% growth over LKR 2,151 million in the comparable period in 2016. The Group recorded a consolidated profit after tax (PAT) of LKR 2,944 million up 71% over the LKR 1,721 million recorded in the comparable period. PAT for the quarter ended 30th June 2017 was LKR 1,571 million which reflects a growth of 14.4% over LKR 1,373 million reported in the first quarter of 2017.
DFCC Bank completed yet another successful first half year by reporting profit before tax of LKR 3,446 million a 74% growth and profit after tax of LKR 2,815 million a 76% growth over the period ended 30 June 2016 despite increased taxes and narrowing margins due to fluctuating interest rates which prevailed during the period.
The Chief Executive Officer of DFCC Bank, Arjun Fernando noted that this strong bottom line growth was achieved despite a challenging operating milieu. “The external environment was fairly challenging due to rising taxes and pressure on margins in the face of interest rate volatility experienced during the year. However, our sustained momentum in Q2 2017 confirms that our growth strategy is on track. We took the challenging market conditions into consideration in planning our strategy and we have deployed an array of financially prudent measures, customised financial solutions, digitalisation initiatives, branch expansion and other deposit mobilisation schemes along with staff engagement programmes to fuel our progress.”
“DFCC Bank is always striving to ensure that our customers get the very best in service by working together as a team to listen and respond to their changing needs. Our people continue to be our biggest strength, and the Bank has embarked on many customer engagement initiatives. We will continue to deliver services in the most cost effective and efficient way to provide the best possible value for our customers” he further stated.
Strengthening access to customers, the Bank opened nine full service state of the art branches in strategic locations this year, spreading DFCC’s footprint to Kahawatte, Kochchikade, Giriulla, Wennappuwa, Hikkaduwa, Nawalapitiya, Dankotuwa, Ambalanthota and Wattegama.
The Bank also increased its focus on digital transformation technology to accelerate shift away from traditional banking during the year. The Bank’s revolutionary Vardhana Virtual Wallet gained further momentum attracting a large number of users including DFCC customers, non-customers and merchants whilst also achieving a high transactional value. The Wallet is revolutionising payments and offering unparalleled convenience to customers due to its easy to use functionalities. The merchant base has rapidly expanded into large scale supermarkets, fast food chains, retail clothing chains, online stores, salons, cinemas and other merchant categories will be introduced in the near future.
This expansion has significantly extended DFCC Bank’s market coverage and ability to reach a larger and more diverse customer base. The fruition of this expansion initiative is already being reflected in the rise in deposits and lending. It is also noteworthy that despite the increase of 28% in operating cost due to ongoing expansion activities that include new branches, business promotions and IT related expenses, DFCC Bank has continued to maintain one of the lowest cost to income ratios in the industry at 47.1%, (post exceptional gain adjustment).
The Bank’s Loans portfolio grew by LKR 31,694 million to LKR 198,438 million compared to LKR 166,744 million as at 30 June 2017, reflecting a growth of 19% year on year. The year to date growth in loan portfolio was LKR 12,652 million (7%). The Bank’s deposit base increased to LKR 168,357 up 40% from LKR 120,089 million in June 2016. The growth in customer deposits during the first half year 2017 was LKR 27,843 million (20%) which was well above the growth in loan portfolio during the same period. The Bank’s CASA ratio, which represents low cost deposits over the total deposits of the Bank, has declined to 15.9% from 20.2% in December 2016. This was mainly due to the increase in fixed deposits by LKR 29,806 million during the period which was used to fund the lending growth of the Bank. The DFCC bank continues to enjoy medium to long term low cost borrowing lines that helped to reduce the funding cost. When these term borrowings are added to deposits, the ratio improves to 26.1% as at 30th June 2017.
Total assets of the Bank grew by 14,814 million (5%) during the first half 2017. The total assets growth compared to June 2016 was LKR 42,829 Million (16%).
The Bank has also retained a strong focus on lending quality. However, despite the increase seen in the Non-Performing Advances (NPA) ratio as at 30th June 2017 of 3.02% when compared to 2.97% in December 2016, this is an improvement from the March 2017 NPA ratio of 3.34%. The Bank has streamlined its recovery process and strengthened loan appraisals to help contain the accumulation of NPAs.
While pursuing rapid growth, the DFCC Group has continued to observe strict regulatory compliance and has maintained minimum capital ratios well above statutory requirements, while also enhancing shareholder wealth through dividend payments.
As at 30 June 2017, the Group Tier 1 capital adequacy ratio was 13.39% and the total capital adequacy ratio was 15.64%. The Bank’s Tier 1 and total capital adequacy ratios were 12.41% and 15.24% respectively as at 30 June 2017. The Bank is also well within the minimum capital requirement for Basel III reporting which will be effective from July 2017.
The Banking landscape is fast changing bringing about many challenges as well as opportunities. DFCC Bank’s philosophy is to provide the best service through a number of delivery channels making the products and services accessible to customers wherever they are. In line with this, DFCC Bank plans to invest significantly to increase the Bank’s digital footprint.
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DFCC Bank in strong half year performance
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Business Role Model honors for Cotton Collection’s Niloufer Anverally
Niloufer Esufally Anverally, Founder/Managing Director of fashion retail icon Cotton Collection, was honored as Business Role Model of the Year 2017 at the recent ‘Top 50’ Professional & Career Women Awards 2017.
Organised by Women In Management (WIM), partnered by IFC, a member of the World Bank Group, these Awards were held on the 14th of July at Hotel Taj Samudra. The award ceremony itself proved to be a celebration of 50 remarkable women from across Sri Lanka and the Maldives, showcasing achievements in their respective disciplines, while also empowering others at the beginning of their journey.
A mother, wife, sister, daughter, dreamer, perfectionist and above all a passionate motivational force for local women, Ms. Anverally is creator of the Sri Lanka’s landmark fashion retail chain, Cotton Collection.
An Economics Major fresh out of the University of Mumbai in 1990, Ms. Anverally ventured into entrepreneurship, which was the last career choice anyone expected of her. However, it was a journey that she was destined to take. Today, 26 years later, she is the proud custodian of Cotton Collection and Leather Collection, overseeing five branches and over 150 staff. The retail chain is also fortunate to be going from strength to strength, a result of a steady growth path carefully guided by Ms. Anverally.
“70% of my staff and 50% of my senior management are female, which I feel is a strong indicator that Cotton Collection and Leather Collection are advocates of women’s empowerment across the board,” noted Ms. Anverally,
She made the 50 Most Powerful Women in Sri Lanka list by Echelon and was awarded the Outstanding Business Entrepreneur of the year Award in 2014. The same years saw her being recognized as a forerunner in Businesspeople of the Year Awards by the LMD magazine.
An ardent advocate of equal opportunity and workplace diversity, Ms. Anverally continues to empower women who are part of her staff and supply chain.
“I am grateful to Women In Management and IFC for the ‘Business Role Model of the Year’ recognition, since it will help me promote entrepreneurship among Sri Lanka’s women to an even greater degree. I am also proud to say that 90% of my suppliers are women entrepreneurs who started their journey with me, as I started mine 26 years ago. Today, they are strong, independent women who are inspirational leaders guiding a host of women through their own journey as entrepreneurs” said Mrs. Anverally.
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Sri Lanka’s Vehicle Population topped 6.8 million in 2016
Sri Lanka has reached a 6.8 million motor vehicle population in 2016, an 8 per cent increase from 6.3 million registered in 2015 according to the latest edition of an annual report on the country’s vehicle market compiled by the Ceylon Chamber of Commerce.
During 2016, the country’s expenditure on motor vehicle imports declined by 32 per cent to Rs.194 billion compared to 2015 where Sri Lanka spent the highest ever expenditure for motor vehicle imports of Rs.288 billion. This sharp drop was mainly driven by motor cars.
The report further reports that, with this significant decline of motor vehicle imports, vehicle registrations declined by 26 per cent compared to 2015. More than half (54%) of the current vehicle population consists of Motor Bicycles followed by Three-Wheelers (16%) and Motor Cars (11%).
The report, prepared by the Economic Intelligence Unit of the Ceylon Chamber of Commerce, provides a detailed statistical analysis and industry overview of Sri Lanka’s Vehicle Market, featuring the latest information on registration; vehicle population; imports of vehicles by vehicle category and an overview on the global vehicle market and Global Hybrid and Electric Vehicle market.
To purchase a copy of the report, contact Saumya Amarasiriwardane, Research Analyst, Economic Intelligence Unit of the Ceylon Chamber of Commerce on 011-55 888 83 or saumya@chamber.lk
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Virtusa defends championship title at the national level Mercantile eSports event organized by Gamer.LK
For the second consecutive year, Virtusa became the champions of the Mercantile eSports Championship – powered by Dialog Gaming, held recently at Trace-Expert City. The championship open exclusively to the teams and players from any registered business/organization, drew over 60 corporates who battled it out across two days for the coveted Mercantile eSports Championship trophy.
Competitors representing top corporate firms such as Dialog, London Stock Exchange Group Sri Lanka, Virtusa, WSO2, Sysco Labs, Pyxle, 99x Technologies and many more were geared up and ready to face off each other to bring victory to their workplace.
The Mercantile eSports Championship 2017 was powered by Dialog Gaming and was supported by the Official Energy Drink Red Bull , Official Motorbike Partner Honda, Official Radio Partner Yes FM, Travel Partner Pick Me, Digital Media Partner ReadMe, Digital Promotions Partner PromoterLK, Audio-Visual & Lighting Partner Elektro Revo and Videography Partner Visaru.
After two days of intense competition, Virtusa came out on top as champions claiming the trophy with London Stock Exchange Group Sri Lanka and Dialog securing the second and third places respectively.
For more information on the event please visit http://mercantile.gamer.lk or follow Gamer.LK on Facebook at http://facebook.com/gamerlk.
The full winners list are as follows:
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The Outlet Store rolls out summer shopping week spree
The Outlet Store, Sri Lanka’s latest addition to the fastest growing retail fashion sector which opened its doors for an exclusive family shopping experience, rolled out a fabulous shopping week spree this summer (24th July – 30th July) with discounts upto 25pct on the total bill value.
In line with its tagline ‘Get Smart for Less’, the spacious 15,000sqft departmental store features a wide range of local and international fashion and lifestyle brands at affordable prices. It offers the latest trends in wardrobe for men, women and kids and has an exhaustive collection of household and gift items, accessories, perfumes, cosmetics, watches, toys, footwear, and jewellery.
Shoppers are sure to enjoy the most fashionable and individualistic collections and merchandise that’s of the finest quality in an international shopping ambience. The Outlet Store also provides an ample parking space which can occupy around 30 vehicles, and a café is scheduled to open very soon.
‘It has only been a few weeks since we launched our store at Bambalapitiya and we’ve already experienced a significant success in all shopper segments. We are excited to roll out a shopping spree for a whole week inviting customers to come and shop till they drop by giving away massive discounts on almost all items including that of the total bill value, said Sharhan Mansoor, Managing Director- The Outlet Store Clothing Pvt Ltd.
The Outlet Store is gaining grounds as a much sought after shopping destination featuring contemporary and trending merchandise, and has an ambitious direction to open up more stores in Sri Lanka’s most preferred fashion destinations in the future. Follow the store on Facebook for updates of latest news and products at www.facebook.com/TheOutletStore.lk
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Role of Chrysotile fibre cement in Sri Lanka’s roofing industry
Shelter is one of the basic necessities discovered by humans as early as the prehistoric times. The earliest shelters were built using stones, clay and sundried bricks and later materials like timber, glass, concrete as well as steel were invented to fortify the structures. Roofing materials also have undergone major evolution from animal hide and straw to modern day clay tiles, concrete tiles and fibre cement roofing sheets.
Chrysotile Roofing
There are four main categories of roofing materials presently used in Sri Lanka, including Chrysotile cement sheets (commonly known as Asbestos sheets), clay tiles, Galvanized iron sheets and Zinc Aluminium sheets.
Chrysotile fibre cement sheets, which take up 35% of the local roofing market, have been prominently used since 1950. Sri Lanka produces only high-density fibrecement roofing and ceiling products via four manufacturers. Moreover, the industry supports over 30,000 persons through direct and indirect employment.
Redefining Asbestos: White Vs. Blue
Chrysotile fibre cement roofing is more commonly referred to as Asbestos roofing sheets. However, there are two main categories of Asbestos – the white asbestos and the blue/ brown asbestos. Sri Lanka only imports white asbestos also known as Chrysotile. Since 1970, importing of blue and brown asbestos into the country has been banned under the Consumer Protection Act and Imports Regulation Act.
According to the Fibre Cement Product Manufacturers’ Association, White Asbestos also known as Chrysotile fibre is used in over 150 countries across the world including the USA.
Pros and cons of using Chrysotile fibre cement
Unlike its counterparts, Chrysotile fibre cement sheets are cost effective and require less timber for installation, preventing needless felling of trees. Chrysotile sheets are considerably durable and last more than 50 years, requiring minimal maintenance. The high density product comprises of 8% of Chrysotile fibre tightly packed within a strong cement bond.
These sheets are also ideal for use in Sri Lanka’s tropical weather due to their high thermal performance, water tightness and non-conductive nature. Furthermore, Chrysotile is comparatively a non-combustible material adding extra safety and peace of mind to the occupants. Moreover, studies have proven that white asbestos or Chrysotile fibre easily dissolves in the lungs and releases naturally, whereas the brown/ blue asbestos or Amphibole fibres tend to show higher biopersistence, in other words these fibre are not soluble in the lungs and tend to remain in the lungs.
Chrysotile – a target of criticism
The annual consumption of Chrysotile fibre stands at 2 to 3 million tons in the world, out of which Sri Lanka claims 50,000 tons. Currently the material is imported from Russia and Brazil, and the manufacturing process has continued for more than six decades. Despite the constant dialogues on potential health hazards said to have been caused by asbestos, no research so far has been able to prove the fact beyond doubt.
Studies have clearly proven that Amphibole fibres which include Amosite (brown asbestos),Crocidolite (blue asbestos), Tremolite, Actinolite, and Anthophyllite have higher potential in causing health hazards due to their insoluble quality in lungs.
Furthermore, the confusion of naming two distinctively characterised fibre groups – the Chrysotile and Amphibole groups have also contributed to the negative image built around the particular roofing product which in turn may cause a negative impact on the future of the roofing industry.
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Australian purchases in the stock market hits an all-time high
Foreign inflows to the stock market originating from Australia indicate a figure of Rs. 626.4 million year-to-date, which is an all-time record for foreign purchases from Australia in a calendar year. The Colombo Stock Exchange (CSE) in association with the Securities and Exchange Commission of Sri Lanka (SEC) hosted a series of Invest Sri Lanka Investor Forums to promote Sri Lankan capital market investment in Australia during March 2017. Rs. 593.4 million, which attributes to 95% of the purchases this year, have been recorded since the Invest Sri Lanka forums.
Record inflows from Australia also place the country as the 10th ranked contributor in terms of overall net foreign flow in 2017, a noteworthy development considering the fact that an actual outflow of funds to Australia amounting to Rs. 80.2 million was recorded in 2016.
A strong community of individuals with a Sri Lankan origin eager to look at new Sri Lankan investment opportunities and the celebration of 70 years of diplomatic ties between Sri Lanka and Australia presented the CSE with a unique opportunity to promote the capital market in Australia this year.
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Amana Bank almost triples 1H Profits. Q2 profits soar by 376%
Amãna Bank ended an exceptional first half as the Bank’s Profit After Tax for the period almost tripled to Rs 151.7 million from Rs 56.1 million achieved in the corresponding period of 2016. Profit Before Tax also reflected a similar YoY growth of 170% to reach Rs 210.8 million. Profit After Tax for the second quarter alone surged by 376% (YoY) to achieve Rs 85.1 million from Rs 17.8 million recorded in Q2 2016.
Driven by its retail and SME banking activities, the Bank’s top line performance showcased a remarkable YoY growth of 39% in Financing Income to achieve Rs 2.52 billion in the first half while Net Financing Income for the same period grew YoY by 38% to reach Rs 1.19 billion. The Bank recorded a 14% growth in Net Fee and Commission Income to reach Rs 112.1 million. Net Operating Income of the Bank reached Rs 1.37 billion reflecting a healthy growth of 21.3% from 1H 2016. The increase in Total Operating Expenses was maintained within 3.5% when compared with 1H 2016. The Bank’s financing margin ended higher at 3.9% compared to 3.6% in 2016.
During the first half the Bank’s Total Assets grew by 4.3% to close at Rs 56.64 billion while its Deposits and Advance portfolios closed at Rs 49.15 billion and Rs 40.02 respectively. With effective credit risk management policies and procedures in place, the Bank continued to maintain a healthy Gross Non-Performing Advances Ratio of 1.47%, well below the industry average.
Having recorded its first year of core business profit in 2015, the Bank was successful in achieving a positive position in its reserves for the first time to close at a net reserve position of Rs 75.9 million. As a result the Bank’s Net Asset Value per share grew during the 6 months from Rs 4.63 to close at Rs 4.75.
Commenting on the Bank’s performance Chief Executive Officer Mohamed Azmeer said “I am extremely pleased with the performance achieved by the Bank during the first half of 2017, thereby continuing to maintain the growing trend of income and profitability. The remarkable growth in income and profits were achieved amidst the capital raising activities, which we successfully concluded in our recently oversubscribed rights issue. With fresh capital infused which thereby supports our future expansion, I am optimistic that this performance trend will grow during the second half of the year as we make strong progress to achieve the goals outlined in our 5 year strategic plan”.
The Bank recently succeeded in raising Rs 4.75 billion through its Right Issue which will result in the Bank’s Stated Capital growing to Rs 10.6 billion.
Amãna Bank is the country’s first Licensed Commercial Bank to operate in complete harmony with the globally growing non-interest based banking model. With the mission of Enabling Growth and Enriching Lives, the Bank reaches out to its customers through a growing network of 28 branches and 3800+ ATM access points and has introduced a bouquet of customer conveniences such as Internet & Mobile Banking, Debit Card with SMS alerts, Saturday Banking, Extended Banking Hours, 24×7 Cash Deposit Machines and Banking Units Exclusively for Ladies.
Fitch Ratings, in October 2016, affirmed the Bank’s National Long Term Rating of BB(lka) with a Stable Outlook. The Bank was recognized as the Best ‘Up-and-Comer’ Islamic Bank of the World by ‘Global Finance Magazine’ at the 18th Annual World’s Best Banks Award Ceremony held in Washington DC, USA. The Bank was also bestowed the coveted title ‘Islamic Finance Entity of the Year 2016’ at the inaugural Islamic Finance Forum of South Asia Awards Ceremony
Photo caption: Mohamed Azmeer – CEO Amana Bank
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Dipped Products posts Rs.7.5 billion turnover
Dipped Products Group posted Rs. 7.5 billion turnover during the quarter ended 30th June 2017, 37 percent increase from a year ago. Group Profit before Tax (PBT) for quarter improved to Rs. 93 million.
The Hand Protection segment contributed Rs. 4 billion to the revenue, 23 percent higher than the previous year. The sector was able to grow its sales across global markets consistently by developing high quality products catering to customer specific needs. Furthermore the newly commenced Universal glove operations improved its Capacity utilization as a result of customer orders picking up during the quarter. However due to steep increase in latex prices the contribution to PBT from the segment dropped to Rs. 24 million.
The Plantation segment reported Rs. 3.5 billion in revenue and a PBT of Rs. 69 million. Plantation segment performance was affected by adverse weather conditions and restrictions on weedicides.
Established in 1976, Dipped Products is one of the leading non-medical rubber glove manufacturers in the world, and accounts for a 5 percent share of the global market. The company’s products now reach 68 countries.
The Board of Directors of Dipped Products PLC comprises Messrs. Mohan Pandithage (Chairman), Dr. K.I.M. Ranasoma (Managing Director), F. Mohideen, S.C. Ganegoda, Dhammika Perera, M. Bottino, S. Rajapakse, N.A.R.R.S Nanayakkara, S.P. Peiris, K.D.G. Gunaratne, H.S.R. Kariyawasan and S.M. Shaikh.
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Adverse weather affects Hayleys Fabric Q1 performance
A pioneer in the knitted fabric industry saw its performance taking an unexpected turn due to the recent floods that occurred in the month of May. The Hayleys Fabric production facility was forced to shut down in the last week of May due to the flooding of Kalu Ganga.The impact of floods rolled over to June as most of employee houses were under water for several days and this resulted in heavy absenteeism and a loss in production volumes by almost half during the first week in June. It is reported that this had been the worst flood in over 30 years in this area.
The month of April generally makes a loss due to the factory closure for 10 days for the Sri Lankan New Year and annual preventive maintenance. The order book was full and the Company was confident in turning around in the months of May and June after covering up losses in April. Unfortunately, May and June cumulatively saw a total loss of 150 tons of sales which resulted in the 1st quarter ending with a net loss (before tax) of USD 162,648/- and a turnover of USD 13 Million. The Company’s own brand ‘INNO’ has made the Company attract higher value products and the order book continues to be full and the Company is confident of recovering its losses during the 2nd Quarter.
Hayleys Fabric PLC is a subsidiary of Hayleys PLC and the Board of Directors comprises Messrs. Mohan Pandithage, Dhammika Perera, Rohan Goonetilleke, Sarath Ganegoda, Haresh Somashantha, Nandajith Somaratne, Ananda Jayatilleka and Dr. Sunill Nawaratne.
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Seylan Group shows strong 1H performance with 32% growth
~ Bank maintains moderate growth of PAT despite prudential impairment provision for legacy NPAs
Seylan Bank and its Group reported a strong growth momentum with its performance for the six months ended 30 June 2017. Seylan group recorded a net profit after tax of Rs. 2,310 Million for the period which is an increase of 32% compared to the prior year corresponding period.
Seylan Bank closed the first 6 months ending 30th June 2017 with a post-tax profit of Rs.1,805 Million a growth of 2.87% compared to Rs.1,755 Million over 1H 2016. The Bank was able to record a moderate growth in core banking activities for the first six months despite challenging business environment and prudential impairment provisions on legacy NPAs.
The Bank will reach year on year growth of Profit After Tax over 21% if not for the impairment made on legacy NPAs that was made due to the delay experienced in settlement of dues by the Compensation Tribunal and another payment to be received as a secured creditor with the liquidation of entity concerned .
Net interest income increased from Rs. 6,147 Million to Rs. 7,265 Million, an 18.19% increase for the 6 months ended 30th June 2017 resulting from selective growth in advances and effective pricing strategy. Nevertheless Interest expenses increased at a faster pace of 53.26% during the period under review, thereby compressing margins. Net fees and commission income grew across a spectrum of fee based products and services by 23.83% for the period under review to Rs.1,773 Million in 1H 2017.
Other operating income comprising net gains from trading, gains on financial instruments, gains on foreign exchange and other income increased by 46.08% from Rs. 611 Million in 2016 to Rs.892 Million during 1H 2017 mainly as a result of mark-to-market gains on Government Securities, due to the favorable movements in interest rates. Decrease in foreign trade transactions resulted in Bank recording a substantial decrease in net exchange income of 20%.
Total expenses increased from Rs.4,676 Million to Rs.5,421 Million during 1H 2017, mainly due to increase in investments made in employees, technology, upgrading and refurbishment of branches etc.
The Bank reported a net credit growth of 2.97%, with net advances growing from Rs. 236 Bn in Dec 2016 to Rs. 243Bn during 1H2017. During 1H 2017 the overall deposit base grew from Rs. 273 Bn in December 2016 to Rs. 280 Bn and the CASA ratio stood at 31.59%.
Overall, as a result of the performance during the six months, Bank’s Earnings Per Share (EPS) stood at Rs 5.16. The Bank recorded a Return (Net profit before tax) on Average Asset (ROAA) of 1.37% and Return on Equity (ROE) of 12.55%. The Bank’s Net Asset Value per share as at 30th June 2017 was Rs 85.40 (Group Rs 89.87).
Seylan Bank has achieved a historic milestone by successfully securing a long term funding facility of $ 75 million through Development Finance Institutions (DFIs). These funds were raised in order to enhance Small and Medium Enterprises lending in the Bank which is one of the key area of focus in the Bank’s 2017-2020 strategic plan.
The Bank’s core capital and total capital adequacy ratio remained strong at 10.42% and 12.67% respectively as at 30th June 2017, as against the statutory minimum. In October 2016 Fitch reviewed the Bank’s rating and reaffirmed the Bank’s rating at ‘A-lka’ with a ‘stable ‘outlook in January 2017.
As at 30th June 2017, the Bank network comprised of 166 Banking Centres, 6 CDMs and 203 ATMs. Seylan Bank also continued its CSR initiatives focusing on education and accelerated its libraries project for under privilege schools.
During the period of six months ended in 2017, 11 more school libraries were opened taking the overall number of libraries opened under the project to 131. Apart from the opening new libraries the Bank is investing in refurbishing and upgrading the existing libraries.
The Bank has developed a new strategic plan that will take the Bank forward to 2020 with aim to expand branch network and growth in CASA, adoption of digital channels, boosting the bancassurance sales, redesign SME operational model etc and is in the process of rolling out the plan. These will be the key areas of focus for Seylan Bank as we look towards concluding yet another rewarding year.
Photo caption: Chairman of Seylan Bank Mr. Ravi Dias (left) and Director/CEO Mr. Kapila Ariyaratne
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STAX sees huge opportunities for Sri Lankan companies in Africa
As a company engaged in facilitating market entry for corporates as well as global investors, global strategy consulting firm STAX Inc is seeing renewed interest in African countries as of late. Stax recently assisted a Sri Lankan FMCG market leader to tap into the burgeoning consumer market in East Africa by helping it to find suitable in-country partners.
As a whole, Africa has become more peaceful and stable over the last decade. The World Health Organisation reports that deaths through conflict in Africa declined by 95% between 2000 and 2012. This improved peace and stability is starting to reap economic benefits for the African nations.
In the 1990s growth in Sub-Saharan Africa averaged roughly 2.0% a year, a slow rate by the standards of other developing economies. Between 2000 and 2007, Sub-Saharan Africa nearly tripled its growth rate to 6.0% a year. Over the last decade African economies have added nearly $1T, and the combined GDP of African countries today stand around $2.2T.
The combined population of Africa is 1.2B today, and accounts for more than 15% of world’s population. Africa’s working age population as a share of the total population is set to continue to rise from its current 56%, all the way through to the next century.
The link between a country’s level of urbanisation and economic growth is well established. Two decades ago less than 30% of Africa’s population lived in urban areas. This has increased to 40% today, and by 2025 the majority of Africans will live in cities, with the urban population accounting for 52% of the total population.
“As Sri Lanka’s post-war economic resurgence transitions into long-term stability, local companies are increasingly looking at larger regional markets for future growth. Neighbouring South Asian nations (Bangladesh, Pakistan etc.), emerging Mekong valley economies (Cambodia, Myanmar etc.) and African nations are popular destinations among Sri Lankan companies”, said Rasitha Wickramasinghe, Business Development Lead of STAX Inc.
“Mini-hydro power companies such as VS Hydro and Hemas Power, a subsidiary of Hemas Holdings plc, were among the early entrants of Sri Lankan companies into Africa as opportunities in the local market started to saturate. They were followed by construction, ICT, logistics and automotive companies”, he added.
In the ICT sector, hSenid, the largest Human Capital Management (HCM) solution in Sri Lanka, entered the African market more than 10 years ago when it successfully bid for a RFP in Tanzania with a local partner. According to Founder Chairman Dinesh Saparmadu, “Africa is a high growth market for us with clients in banking, insurance, telecom and NGO sectors. Today we have more than 60 corporate clients across 17 African countries for our HCM and mobile solutions”. In order to cater for growing demand, hSenid opened an office in Nairobi, Kenya and from there rest of the African continent is serviced via direct and partner channels.
St. Theresa Industries (STI), a company that specialises in the manufacturing of power distribution and transmission materials, is another company that has expanded into Africa over the last four years. In 2013, STI set up a factory with a local partner in Kenya to take advantage of the huge market potential due to limited rural electrification and distribution network.
Director of STI Madusanka Fernando said, “We were able to take advantage of the 2030 vision of the Kenyan government which promotes local manufacturing by providing exclusive rights to government contracts. To date, we have been successful in securing over USD 15 million worth of contracts from the public and private sector and are already looking to increase our footprint to Tanzania and Rwanda by the end of this year”.
During 2017, apparel manufacturers Hela clothing and Hirdaramani group also established their manufacturing presence in Africa.
“As African economies continue to grow, more opportunities will open up in in areas such as tourism, hospitality education and green energy. Service industries such as retail, banking and healthcare can also expand into to Africa to take advantage of the growth in the services sector”, Wickramasinghe concluded.
STAX Inc, Sri Lanka’s largest strategy consultancy, has its headquarters in Boston, and branch offices across Chicago, New York, Colombo and Singapore. In Sri Lanka, STAX advises four of the Top 10 conglomerates, blue chip industry leaders and large family businesses on areas such as strategy planning, market assessment, data analytics and investor facilitation.
Photo caption: High growth African economies based on average GDP growth rate between 2010 -2016 (STAX analysis)
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Veteran stories from 150 years of Pure Ceylon Tea: Jayantissa Ratwatte
Having travelled the plantations extensively with some of his kinsmen who were already in the tea industry as a school boy during the 1950s, Jayantissa Ratwatte was a frequent visitor to the island’s hill country tea plantations and so the transition from books to tea was quite an organic one. Continuing a tradition that started with the late Kenneth Ratwatte, a well-respected pioneer in the country’s nascent plantation sector, and today extends to his son, Kenneth Ratwatte who is also in the tea trade, Jayantissa commenced his preeminent career in 1961 as a trainee at Whittalls Estates & Agencies Ltd.; over the next four decades Jayantissa has stood at the forefront of the plantation industry and together with many other industry leaders, served a vital role steering and shaping it through turbulent periods of nationalization in 1974, and subsequent privatization in 1992.
“Even at the time that I was starting out in 1961, I well remember people claiming that the exit of British planters would spell doom for the industry and I would get a barrage of questions about whether I was sure that this was the industry that I wanted for myself, but I was always confident right from the beginning, and that was due to the fact that I could see the latent potential in a yet underutilized national resource.
Uncertainty around nationalization
“In my early days in the Industry, a good number of the British planters were already anxious with political trends in the country and many had moved to Kenya and other tea growing nations. There was a new generation of Sri Lankan planters who were joining the industry. I’m pleased to say that despite the naysayers, we were able to not only maintain, but also improve on agricultural, manufacturing and productivity standards.
“This was due in no small part to a much deeper understanding of local conditions which Sri Lankans had as compared with British Planters, and also as a result of their ability to more freely interact with plantation sector workers.”
He noted that where British planters were not very conversant in the vernacular, and were generally averse to interacting directly with estate employees, Sri Lankan planters were able to step and take a more open approach to dealing with employees and the wider estate community.
“The British left an industry that was organized in an extremely hierarchical manner, so it had to be a gradual process of easing out of that culture and into one in which we could start to win the confidence of our employees. That being said, it was no easy task to attempt to manage thousands of people, so naturally, we had to maintain certain standards and protocols.”
“This was a period of learning where the boundaries were at times tested and the workers may have felt that they we were less rigid than the British and they would try to take advantage of that. Overall we were able to manage these issues while also trying to drive meaningful improvements to quality of life in estate communities,” Ratwatte explained.
From the start of the 1970s, the debate around the nationalization of the holdings of privately owned companies had commenced in Sri Lanka, ramping up with the passing of the Land Reform Act in 1972 which prohibited individual ownership of land in excess of 50 acres.
In the years leading up to nationalization, Ratwatte rose through the ranks quickly reaching the position of Superintendent of Hellbodde Estate in the Pusselawa/Ramboda District, where he worked for almost a decade before being appointed to Board 2 of the Janatha Estates Development Board (JEDB). By 1987, Ratwatte was serving as Chairman of Board 1 of the JEDB, overseeing tea, rubber and coconut plantations across Hatton, Dickoya, and Avissawella.
“There were several initiatives at the outset of nationalization like the MTIP & TRAD Projects that provided substantial investments into capital development including replanting, factory development, diversification, housing, water, sanitation, and transport, and these resulted in considerable improvements all round.
“As time progressed, politics infiltrated the sector and crucial positions were filled by political appointees and this set an extremely negative precedent. The working culture shifted drastically from one of productivity to a notably lethargic performance. By the mid 1980s the industry turned out to be a drain on the Treasury which, had to spend Rs. 400 million per month simply to sustain it.”
In anticipation of privatization in 1992, Ratwatte was hired by John Keells Holdings Ltd in 1991, with the expectation that he would lead the formation of its plantation company.
“After the Management Company was set up and our first crop of senior executives appointed – all of whom were renowned planters in their own right – our first challenge was to set about changing the mindset of the employees and resultant stagnation that had permeated the entire industry,” Ratwatte explained.
In the first decade post privatization, most RPCs performed reasonably well as both markets and climatic conditions remained fair, despite regular wage increases and consequential ‘gratuity top up’, payment of lease rentals and other expenses.
Since then the industry has been beset with extremes in weather, volatile markets, high costs, low productivity an aging tea stock, unreasonable wage increases.
Vision for the future
“This is an industry that is tailor made for resourceful investors who have the right influence in world markets. It is unquestionable that it must be sustained and that it does have the potential to be a viable business. Today, I believe the industry and the Government are at a crossroads beyond which significant investments will need to be made to ensure the long-term survival and prosperity of Sri Lankan tea.”
In particular, Ratwatte criticized the lack of engagement from the Tea Research Institute, noting that moving forward, steps had to be taken to reinvigorate the organization so that it could start making vital contributions in replanting, including the development of high yielding clones such as those which had been established in countries like Kenya, and introduction of new technology in tea processing.
“Harvesting techniques must be updated. Gone are the days where we can continue to have a 100% handpicked tea. That is simply too expensive and we must look to examples of mechanized harvesting.”
Similarly, he stated that factory processes would also have to be updated while estate workers would also have to be further incentivized to remain and work in the plantations, ideally by providing options to supplement their income – including dairy and vegetable farming and even tourism.
“Finally I believe that our industry itself will require significant restructuring. At present we have far too many layers between production and retail. This process must be simplified and this is only possible through partnerships with major tea players like Liptons and Unilever, May Tea, Starbucks, Finlays UK, and similarly large multinational brands.”
“They have to be allowed to enter the Sri Lankan Tea Industry ideally in association with those local companies that have been successful with RPCs, and other leaders in the trade. They need to be incentivized and given latitude to restructure and make what changes they deem fit to make the industry more profitable and sustainable. At that point, our production will be linked to guaranteed markets. Suffice to say such investors will require guarantees from the State for security of their investments. That is the only way that I can see in which we can achieve the levels of investment necessary to turn this industry around,” he asserted.
Ratwatte also expressed support for a change in the model of production at the estate level, either through the formation of legally binding “co-operative partnerships” of workers who are provided a right of ownership specifically over the crop, where land is retained with the state and RPCs through their manufacturing facilities.
Alternatively, he stated that a feasible revenue sharing model that did not enable any further dilution of the ownership of plantation land could also hold the potential to drastically improve the outlook of Sri Lanka’s tea sector.
The vital need for informed decision making
“Particularly over the recent past it has greatly saddened me to see the kinds of uniformed, misleading, and oftentimes illogical criticisms that are being levelled at the industry, particularly at the grower’s level.”
“What is required is a unified vision for how we must proceed. The changes I’m talking about and the investments required can only be achieved through bold and drastic restructuring that is firmly focused on sustainability and long-term profitability,” Ratwatte concluded.
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Mastercard invites cardholders to explore the world with Emirates
Mastercard announced its partnership with Emirates to offer additional savings on economy and business class tickets. Cardholders can avail a discount of up to 8% on return economy fares and up to 10% on return business class fares when purchasing tickets on emirates.com/lk using their Mastercard credit and debit cards. This offer is applicable to passengers originating from Colombo for bookings made from 17th July to 18th August, 2017 on flights from now until 30th November, 2017.
“We are delighted to partner with Mastercard on this promotion that offers added value to our passengers. We believe that this will give Mastercard cardholders yet another reason to traverse the world with Emirates,” said Devika Ellepola, Emirates’ Regional Sales Manager.
“With the steady rise in the number of Sri Lankans traveling abroad for business and leisure, we are excited to partner with Emirates and offer discounts on their Mastercard cards. We look forward to seeing cardholders avail the savings on offer and explore the world with their Mastercard cards,” said R. B. Santosh Kumar, country manager – Sri Lanka and Maldives, Mastercard.
About Mastercard: Mastercard (NYSE: MA), www.Mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardAP and @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
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Sri Lanka’s One Verge Holdings renews partnership with India’s Apalya Technologies
~ Apalya is one of most wide-spread Video Streaming & OTT specialists in the region
One of Sri Lanka’s second generation digital companies – One Verge Holdings (Pvt) Ltd recently renewed its’ partnership with pioneers of mobile video streaming and Over-The-Top media specialists, Apalya Technologies (Pvt) Ltd that has presence in over 11 countries across South & South-East Asia, Middle East & Africa.
One Verge is a streaming specialist with half a decade of experience in the mobile streaming industry and its partnership has been the catalyst in the market leading mobile streaming services such as Dialog Mobile TV, Mobitel MplexTV, Etisalat Mobile TV & Airtel Mobile TV catering to over three million smart phone users from all major telecom operators in Sri Lanka.
Apalya is a multinational streaming giant, a pioneering player in the OTT streaming industry in Asia, Middle East & Africa. With over a 100 million subscribers across more than 30 video and OTT platforms in 11 countries, Apalya enables telcos, media owners and distributors launch and manage their mobile vide and OTT businesses using their proprietary, state of the art video OTT platform that brings bleeding edge technology and best-in-class user experience within reach. Boasting partners from Vodafone Global, Sun TV Network, Ooredoo, Etisalat and several others, Apalya brings trusted credentials to their decade long business.
One Verge is also a launch pad for multinational IT companies to expand their businesses to Sri Lanka, having close ties with all of the operators and key stakeholders in the market.
“One Verge Apalya partnership further ensures many cutting-edge innovations for the Sri Lankan market and is already in the process of enabling an unparalleled music streaming experience to Sri Lanka pretty soon,” said Dilash Weerasooriya – the young and dynamic Founder CEO of One Verge Holdings Pvt Ltd. One Verge has started as a technology knowledge process outsourcing (Tech-KPO) company that has been pioneering the mobile TV streaming business in Sri Lanka, now venturing in to truism, ecommerce, content aggregation and advertising.
“Over the last three years of its fast-paced existence, One Verge, has built strong relationships with almost every mobile operator in the Sri Lankan Telecom space including Dialog, Mobitel, Etisalat, Airtel & Hutch. Having multinational ties, One Verge enables its employees to be part of thriving team of tech professionals through its partnerships spreading over 10 countries.
Apart from IT, One Verge has been active in tourism for almost a decade and in the process of launch of its tourism brand – Lango Leisure.
“In the next few years we would position ourselves as the country’s premier content aggregator. If you are a media owner, telecom operator, cable & satellite service provider or even a broadband ISP and want to deepen your relationship with your customer through offering an OTT entertainment service, we are the one stop plug and play solution you should be considering,” he added hinting about a futuristic vision.
Speaking of its partnership with One Verge, Apalya’s Chief Operating Officer Venugopal Iyengar, had this to say:-
“It has been a great journey with Dilash and One Verge team so far, one which has helped Apalya become the platform of choice for all the Sri Lankan telecom companies to run their mobile TV and video services on. Digitalization and multi-screen access of content (video and audio) is now a given and Apalya is committed to enable telcos and media owners to successfully drive this transition. We look to the renewed partnership with One Verge to reach out to media owners and content creators while reinforcing our strong telco relationships.”
Apalya’s Founder Chief Executive Officer Vamshi Reddy moved from Fortune 500 IT firm in the San Francisco Bay area to come back to India and establish Apalya. He has been the key driver to shape Apalya’s vision and growth over the last 10 years.
Venugopal Iyengar with his rich experience of two decades in broadcast media and digital distribution across global brands like Disney and Viacom and Indian TV brands like Sun TV Network and Zee Entertainment, acts as the bridge between consumers, content, customers and technology helping Apalya spot the opportunity and position itself for delivering it most effectively.
Apalya started with a vision to deliver content across digital devices back in 2005. The reach of TV content was limited to television back then and smart phones were still a rarity. Sensing this opportunity to bring together the content owners, mobile telcos and end users, Apalya started with Mobile TV and has grown to serve every major telco in South Asia and Middle East. Since 2015, its focus has been on building and deploying its proprietary OTT platform, myplex.
Photo caption: Apalya Technologies’ Chief Operating Officer Venugopal Iyengar shakes hands with Dilash Weerasooriya – dynamic Founder CEO of One Verge Holdings Pvt Ltd, whilst Apalya’s Head of Sales Sarath Kumar, Head of Technology Arun Kumar along with One Verge Key Account Manager Kavindya De Silva look on
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HNB takes top honours at CMA Integrated Reporting Awards 2017
Sri Lanka’s best performing private sector commercial bank, HNB, won significant recognition at the recently concluded Excellence in Integrated Reporting Awards 2017, winning an award for the Ten Best Integrated Reports.
Organised by the Institute of Certified Management Accountants of Sri Lanka (CMA), the awards featured participation from a wide variety of listed and unlisted companies including State-owned enterprises and small and medium enterprises (SME).
“Particularly in light of an increasing shift towards integrated reporting at an international level, HNB’s award stands as further validation of the bank’s commitment to maintaining a high level of stakeholder engagement and ensuring strong governance standards through accurate, timely and holistic reporting of our performance.
“Moving forward we will continue to strive for the highest standards in integrated reporting and I wish to extend my sincere gratitude to our team of employees for their vital efforts in collating and preparing this year’s report to such a high standard and look forward to producing informative and timely financial reports in future,” HNB Chief Financial Officer, Anusha Gallage said.
This year’s CMA Integrated Reporting Awards 2017, is the latest in a series of accolades received by HNB over the recent past, including the award for Best Retail Bank in Sri Lanka which was presented to HNB for the 9th time at the prestigious Asian Banker Excellence in Retail Financial Services Awards in Japan.
Photo caption: Richard Howitt, Chief Executive Officer, International Integrated Reporting Council and Wasantha Deshapriya, Secretary of the Ministry of Telecommunication and Digital Infrastructure handing over the award to Anusha Gallage, Chief Financial Officer of HNB
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Growing with potential and prospect for sustainability: Sampath Bank surpassed Rs 5 Bn mark in post-tax profit
Sampath Bank further extended its growth momentum in the 2nd quarter of the year and recorded a post-tax profit of Rs 5.7 Bn for the six months ended 30th June 2017. This registered an impressive 35.1% YoY growth in comparison to the Profit After Tax (PAT) of Rs 4.2 Bn recorded for the six months ended 30th June 2016. Profit Before Tax (PBT) too grew by 36.6% YoY and reached Rs 7.8 Bn by 30th June 2017.
The Sampath Group, which comprises of Sampath Bank and four fully owned subsidiary companies, also posted a growth of 36.8% and 35.0% at PBT and PAT levels respectively.
Fund Based Income (FBI)
Net Interest Income (NII), which is the main source of income representing almost 70% of the total operating income of the Bank, recorded an increase of Rs 3.0 Bn (29.0%) during the period under review. Accordingly, the Bank recorded Rs 13.1 Bn as NII for the 1st half of 2017, as against Rs 10.2 Bn recorded for the corresponding period in 2016.
The above achievement was made possible due to the robust growth recorded in the Bank’s fund base, as indicated by 11% (annualized 22%) growth in deposits and 12% (annualized 24%) growth in advances. The timely re-pricing of asset and liability products and other fund management strategies adopted by the Bank too played a pivotal role in achieving the 29% growth in NII.
Non Fund Based Income (NFBI)
Net fee and commission income, which largely comprises of credit, trade, card and electronic channel related fees increased to Rs 3.8 Bn during the period under review, as opposed to Rs 3.0 Bn recorded during the corresponding period in 2016. This income source too has posted an impressive YoY growth of 26.3% largely due to the robust growth recorded in advances, expansion of credit card operations and the successful launching of innovative value additions through electronic channel offerings.
The Bank’s other operating income, net trading income and gains from financial investments too recorded an increase of 43% during the period under review. Increase in realized exchange income and dividend income from financial assets have contributed to the said increase in other operating income. Consequently, other operating income for the 1st half of 2017 stood at Rs 2.0 Bn, as opposed to Rs 1.4 Bn reported during the corresponding period in 2016.
Operating Expenses
Operating expenses of the Bank which stood at Rs 7.2 Bn during the 1st half of 2016, increased to Rs 7.9 Bn during the period under review, reflecting an YoY increase of 9.5%. This increase was mainly due to increase in personnel expenses triggered by annual salary increments. Other overhead expenses too increased due to general price hikes and indirect tax increases. However, the Cost to Income ratio excluding VAT & NBT on financial services improved to 41.6% in the first half of the year from 49.3% reported in the same period in 2016. This records an improvement of 770 basis points, which is a significant achievement particularly in view of Sampath Bank having one of the youngest branch networks compared to its closest competitors.
Impairment Charges on Loans and Receivables
Impairment charges amounting to Rs 1.35 Bn recorded for the first half of 2017 showed an increase of Rs 794 Mn over the comparative period’s charge of Rs 561 Mn. Impairment provision of already impaired individually significant customers was further increased during the first half of 2017 after considering the current status of the recovery process. Consequently, impairment charge on account of individually significant loans increased by 39% during the period under review. On the other hand, collective impairment charge increased by Rs 545 Mn predominantly due to the growth in the loan portfolio. Marginal increase in NPA ratio from 1.61% in December 2016 to 1.77% in June 2017 too has contributed to the above increase in collective impairment. However, the Bank’s NPA is still the lowest among industry peers and stands well below its closest competitors. This provides an indication of the quality of the loan book and the unique and efficient recovery measures implemented by the Bank.
Business Growth
Sampath Bank’s total asset base surpassed Rs 700 Bn mark in 2017. Asset base grew by 10.1% (annualized 20.2%) during the first half of 2017 to reach Rs 725.3 Bn against Rs 658.5 Bn reported as at 31st December 2016. Gross loans and receivables grew by 12% (annualized 24%) during the period and moved up to Rs 524.6 Bn (up by Rs 56 Bn) as at 30th June 2017. Total deposit base too increased by Rs 57.7 Bn, recording a growth of 11% (annualized 22%) during this period and stood at Rs 574.0 Bn as at the reporting date. However, the CASA ratio (36.3%) decreased slightly compared to 31st December 2016 (38.4%).
Performance Ratios
ROE (after tax) marginally increased from 23.47% as at 31st December 2016 to 24.29% as at 30th June 2017. ROA (before tax) too has increased to 2.27% from 2.14% as at 31st December 2016. The Basic Earnings Per Share for the first half of 2017 has improved significantly and stood at Rs 30.64 as against Rs 22.68 recorded during the corresponding period in the previous year. This was an impressive YoY growth of 35.1%. Statutory Liquid Asset Ratio (SLAR) as at 30th June 2017 stood at 22.40% which is well above the mandatory requirement of 20%.
Capital Adequacy
The Core Capital (Tier I) and Total Capital (Tier I + Tier II) Adequacy ratios which stood at 8.31% and 12.87% respectively as at 31st December 2016 have shown a marginal drop during the period, mainly due to increase in risk weighted assets triggered by growth in the advances portfolio. Decrease in capital due to payment of cash dividends for the year ended 31st December 2016 too contributed to the drop in capital adequacy ratios of the Bank. Accordingly, Core Capital and Total Capital Adequacy ratios as at 30th June 2017 stood at 8.21% and 12.17% respectively. Despite the slight drop, both ratios were maintained well above the minimum regulatory requirement of 5% and 10% for Core Capital and Total Capital respectively.
Other Information
2017 is an important year for Sampath Bank, where the Bank celebrates its 30th anniversary. Since its establishment in 1987, the Bank has progressively developed in all spheres of its operations and today, is positioned as the 3rd largest private sector commercial bank in Sri Lanka. The Bank is renowned for its innovative banking solutions and excellent customer service during the past three decades.
Once again, Sampath Bank was awarded the ‘Best Bank in Sri Lanka – 2017’, a recognition given to top performing financial institutions, by the prestigious Business Magazine “The Euromoney”. The Bank has now been endowed with this prestigious title for four years; 2017, 2016, 2014 and 2013.
Photo caption: Mr. Channa Palansuriya – Chairman Sampath Bank PLC (left) and Mr. Nanda Fernando – Managing Director, Sampath Bank PLC
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Vista Rooms on how to make boutique properties stand out in a crowded hospitality landscape
Sri Lanka is witnessing a surge in tourism that has the potential to make it one of the most popular tourist destinations in the world. The country attracted over 2 million tourists in 2016, generating revenue of over $3.5 billion, up by 14% from the previous year.
While international hotel brands are looking to capitalize on this opportunity, 60% of available rooms still comprise of home stays, apartments and villas in Sri Lanka. Large hotel chains rely on huge marketing spends and experts to maintain their brand’s presence in the market, but there are quite a few things that a property owner can do to stay relevant and maximize their potential.
Vista Rooms, a firm which partners with property owners to help grow their businesses sheds some light on how a property owner can grow their monthly revenue by over 47% (see graph below).
Content & Marketing
With a majority of customers booking their travel itineraries online, good content goes a long way to establish trust. In a competitive market, posting hi-resolution photos of your property is the easiest way to stand out. Offers over social media, defining a target audience and loyalty programs work very well in increasing visibility & reputation. A good content strategy can lead to a drastic increase in room nights booked and hence, overall revenue. Like the graph below depicts, Vista Rooms was able to increase these substantially for its partners.
Price Optimization
Room rates constantly fluctuate in the hospitality industry and price optimization is often overlooked by property owners. Keeping a track of the pricing of similar properties in the vicinity, running last-minute/early bird/long-stay deals on online travel agencies (OTA) will help sell inventory faster. Room rate projections and analyzing booking data to predict demand during peak season, long weekends and public holidays can go a long way to optimize prices. As a result, more room bookings allow one the leverage to increase room rates over time.
Listing Management
The fastest and easiest way to convert more customers is by listing the property on multiple booking platforms. Being present on a single platform like Airbnb might get some initial traction, but a steady flow of bookings is possible only by listing the property on more platforms. Maintaining a good content score is essential for potential guests to discover your property. For example: A good title on Airbnb can increase your monthly views substantially. It’s important to keep your inventory up to date and the response time high on OTAs to keep your content score high.
Customer Service
Communication and service are at the core of the guest experience, and therefore, the faster you deliver, the closer you get to their on-the-go lifestyles. Keeping the turnaround time for customer inquiries to less than 1 hour goes a long way to establish trust and hence, convert faster. Vista Rooms assigns dedicated managers to each property to ensure a smooth experience right from the first inquiry to the check-out process. Build a direct connection with the guests during their stay, so that they establish an affinity to the property and book directly the next time, instead of an OTA.
Positive Reviews
Another aspect that property owners struggle with is getting more positive reviews for their properties. An industry which survives on word-of-mouth, the only way to grow on online platforms is to ensure a steady flow of reviews. Typically, 10 positive reviews are what it takes for a property to start receiving regular bookings online. Reminding guests through an e-mail, giving out incentives are a couple of ways to boost the number. Vista Rooms has played a key role with their partners to increase their review scores on OTA. For example: Villa Capers went from a 6.1 review score to 8.2, Colombo Villa from 0 to 9.2, and Sunset Fort from 5 to 8.
300 other property owners are using Vista Rooms in Sri Lanka to get a 360 degree approach to handling their properties and as a result, growing their businesses. The graph below depicts the kind of impact they’ve had on this fast-growing industry.
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Grow your balance with Amãna Bank Children’s Saving Account
Amãna Bank, pioneers of the non-interest based banking model in Sri Lanka, has once again launched an attractive program to all its Children’s Savings Account Holders and Potential Account Holders, where everyone has an opportunity to receive exciting gifts as they grow their account balances.
Customers who grow their account balances from Rs.5,000/- up to Rs.100,000/- Between 12 June to 31 August 2017 will be rewarded with a variety of edutainment toys according to the stipulated target deposit amount reached.
Upon growing the account by Rs.5,000/- the customer will be rewarded with a Digital Watch, and once they surpass the Rs.10,000/- growth target they will be gifted a Cross Word Board Game. The customer will be additionally rewarded a Green Power Board Game for growing the account by Rs. 25,000 and once the Rs. 50,000 target is achieved they will walk away with a Magnetic Dart Board. Account holders who are successful in growing their account by Rs. 100,000 will be given the grand prize of a Remote Control Helicopter.
Commenting on this promotion, the Bank’s Vice President – Retail Banking & Marketing Siddeeque Akbar said “We have launched this program to motivate our customers to grow their balances from an early age and the gifts on offer will not only be enjoyable but will also stimulate the child’s mind”
Amãna Bank Children’s Savings Account helps minors achieve their full potential by providing them with a strong financial foundation and guiding them towards financial discipline to ensure they are taught the importance of being responsible, ethical and fair. The Account is based on the principles of profit sharing and offers a higher share of the profits earned through the banks investment pool to help children achieve their dreams faster.
Amãna Bank PLC is the first Licensed Commercial Bank in Sri Lanka to operate in complete harmony with the non-interest based Islamic banking model. Fitch Ratings, in October 2016, affirmed the Bank’s National Long Term Rating of BB(lka) with a Stable Outlook. The Bank was recognized as the Best ‘Up-and-Comer’ Islamic Bank of the World by ‘Global Finance Magazine’ at the 18th Annual World’s Best Banks Award Ceremony held in Washington, DC, USA.
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ACL Cables wins Master Brand Status proving its market dominance yet again
Sri Lanka’s No. 1 cable manufacturer in Sri Lanka, ACL Cables PLC achieved the prestigious Master Brand status for 2017, conferred by Chief Marketing Officers (CMO) Asia in partnership with the World Marketing Congress.
During a glittering ceremony held recently, at Taj Samudra Hotel Colombo, presided by Education Minister Akila Viraj Kariyawasam as Chief Guest, ACL Cables was recognized for its superior brand value including its ascendency as the country’s premier cable provider.
A Master Brand status is conferred only to top tier brands in a particular category and in recognition of market dominance. Once the status is awarded on a single brand, the competing brands are excluded from the category.
While selecting the Master Brand CMO Asia carries out a detailed research evaluating all competing brands in the category considering criteria such as a brand’s leadership, brand growth, brand evolution, longevity, goodwill, customer loyalty and overall market acceptance.
Commenting on the new status, Suren Madanayake, Managing Director, ACL Cables PLC elatedly noted, “We are pleased to win the above award proving ACL Cables as the No. 1 cable brand in the market. This esteemed status would not be possible without our steadfast customers including consumers, dealers, distributors and project customers.
“ACL has continuously maintained a strong brand health creating positive brand experiences for all our customers. Quality has also become the bedrock of our brand and during new product development. Our new products such as the fire retardant and fire resistant cables, which has been tested and approved in accordance with national and international standards are examples of how we strive to maintain long term brand value,” he noted.
“The economic brands cape is going through an interesting phase with a healthy mix of popular international brands and local home grown brands emerging in every category. That is why Master Brands outlive time and are indexed only to an evolving market thus forcing a sense of re-evaluation upon them. These brands are the brands that are here to stay,” said Dr. Aalok Pandit Executive Director, CMO Asia.
“A Master Brand is a brand that has made it big. Master Brand in reality is a passion – a brand which has scaled the highest peak in the passion-scale of brands and their respective consumers. It is a passion of passions. Therefore, let’s respect the Master Brand for what it is. It is an exclusive club. Not too many members in this league. The esteemed and distinguished panel is confident that ACL Cables is a successful case in point to deserve the iconic status of a Master Brand,” he added.
ACL Cables holds a market share of 70% with an annual revenue of 14.6 Billion as a group whilst marketing a diversified range of products including, electrical wiring (for households and construction projects), and accessories. ACL Cables is the pioneer in the local cable industry manufacturing a wide range of cables locally and internationally. The company has surpassed other competitors producing many first to market cables. These include fire rated cables such as fireguard, fire zero and fire survivor, which ACL solely holds the expertise and knowledge in manufacturing, together with proven excellence, employing the highest standards and recipient of required test certifications.
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