For the second consecutive year, Sampath Bank was feted as the ‘Best Bank of Sri Lanka’ at the prestigious Euromoney Awards for Excellence 2014, awarded by the UK-based, Euromoney financial magazine. The award was presented in recognition for Sampath Bank’s commitment to its product offering and outstanding customer serviceto meet the growing demand for financial services in Sri Lanka.In addition, more recently, the bank was also awarded the titles of ‘Best Commercial Bank & Best Retail Bank in Sri Lanka for 2014’ by the World Finance Magazine.
The Sunday Leader spoke to Sampath Bank’s Managing Director, Aravinda Perera, to talk about the awards, what it took the bank to achieve them, 2014 in general and plans beyond. We discussed the bank’s impressive credit growth – which has been the best in the industry – in the past threeyears, its branch expansion drive, the influence of gold price declines on the market, evolving banking as a service and the significance of the Consolidation of Finance Companies taking place at a no-crisis time.
Speaking about the mechanics of the Euromoney Award – applications, disclosure, selections and considerations, Mr. Perera, said: “The Euromoney Award is certainly prestigious, mainly due to its well-established and recognized award process, which takes several aspects of an applicant bank’s performance, core operations, forecasts and corporate activities. According to our understanding based on discussions between the bank and the organizers, Euromoney conducts three levels of assessment. The first: based on our application/submission; the second: a performance review by independent analysts, and third: an examination of media and press in the market to assess what’s been said about the bank, and its competitors.”
“Of course this might not be the complete process, but we were also told that aside from existing achievements and performance statistics, the reviewing committee also took in to consideration the potential of the bank – our growth rates and percentages, and our plans for the future. It’s a comprehensive and tedious process, which makes us all the more proud to have won the award.”
When asked about the contribution of itscustomerstowards achieving the bank’s goals, Mr. Perera, said: “Our industry exists primarily for service – to serve customers in the best way possible, and in the process develop a long-term, beneficial partnership. What keeps us striving to innovate and improve is the commitment our customers have shown us and the confidence they have placed in us to fulfill their financial needs. This belief in adding value through our business, is lived by each of our over 3,900 members to contribute to making a difference to our customers.”
Mr. Perera goes on to speak about the guidance and involvement of Chairman, Mr. DhammikaPerera and the Board, in keeping the bank focused on its mission. “The credit for an award like this belongs to everyone involved in powering Sampath Bank, whether it is the Board, the management, employees who have been with us since our inception or even new employees who continue our service-centric tradition at the counters everyday.”
Growth of customer base
Commenting on the growth of the customer base, Mr. Perera said:“For the past three years before 2014, we have had the best credit growth in the country. To make this growth sustainable, a credit growth must be met with higher deposits, which we have seen happen, and is a very positive sign. This year, however, we have seen a slowdown in credit growth; a problem compounded by lower gold prices having an effect on our sizeable pawning portfolio. This led to a decrease in portfolio’s volume and together with a churn in lending, has proved to be a new challenge for us, but we are hopeful things will turn around in the next six months.”
Gold prices
Discussing the many implications for banks and consumers alike due to the drop in gold prices, Mr. Perera, elaborated: “We have to look at the problem on a macro level, beyond the different negativities businesses experience due to it. The drop came at a time when the agricultural sector was also facing difficult conditions and we had to implement several reactionary measures, which we hoped would ease the situation for our customers. Sampath Bank introduced concessions, extended due dates as along as possible and droppedinterest rates from 24% to 15%.”
“During this time, the question did arise as to whether pawning must be considered a banking product, but I believe as long as it is a financial service, it should be. I think it’s an important part of our portfolio, and enables customers to get a fair transaction due to low annual interest rates over other alternatives that offer 10% per month interest rates as a norm. But having signed up for the Central Bank’s Guarantee Scheme, I’m confident, circumstances will improve.”
Branches
Commenting on the correlation between the growth of the customer base and their branch expansion drive, he said: “Five years ago, we had only 100 branches. Today, we have 217 and by the end of this year, we could open another five branches. So the growth of the customer base is basically accomplishedthrough branch expansion. While maintaining this as a primary approach to growth, we also launched new avenues to fulfill the requirements of the new generation of consumers who are more interested in technologically advanced solutions. To achieve this we have introduced new products such as Mobile Cash, Internet Banking and are expanding our services range on Payment Gateway.”
“These products or value additions are being put in place now to accommodate the consumer of the future who will prefer banking from their mobile devices rather than journeying to a bank branch for certain services. The volume of such transactions through these channels is steadily rising. Recognizing this shift in consumer preference, Sampath Bank was the first bank in Sri Lanka to introduce mobile banking to the market. However, even though online banking is growing, we know conventional accessibility and knowing where we are present, is still important to our customers, which is why we are unwavering on branch expansion.”
More stand-alone ATMs
Sampath Bank was the first in Sri Lanka to introduce networked banking and ATMs through its Uni-Banking system in 1988. This paved the way for more people to stay connected to their accounts, and the bank has continued to expand this service. “This year, we are going to install 50 stand-alone ATMs. For instance, there could be two branches a few kilometers apart but in between, there will be an ATM available. One could open the account at one of the branches but all dealings would be done through the convenient and close-by ATM.”
Credit cards
“Sampath Bank was the first to introduce MasterCard Credit Cards to Sri Lanka in 1989 and since then, we’ve steadily grown our credit card-user base. It’s a modern convenience invented by the finance world, and we want to enable as many Sri Lankans as possible to leverage on this. Anyone who doesn’t maintain an account with Sampath Bank is still eligible for a credit card from us, and we make every effort to create awareness and reach among the communities outside Colombo. A memorable activity we executed to do this was the ‘Town on Sale’, which was conducted in Galle, where we negotiated with 20 renowned retailers in Galle to provide special discounts to Sampath cardholders.
Future prospects
During H1 2014, Sampath Bank has reported a growth of 67.5% on PAT, which is a sign of recovery from the 2012-13 gold price-drop period. In closing, Mr. Perera, said: The upturn was expected and as a bank that absorbed most of the hits that came with the gold crisis, without allowing it to affect our consumers, we are elated the market conditions are improving. This allows us to invest more on infrastructure, development and technology that will better help us serve our customers.”
“Banks aren’t just currency storage establishments anymore. We have progressed to offer customers a multitude more in terms of services including even the payment of utility bills and online transaction facilitation. In the face of changing consumer trends, socioeconomic conditions and technological revolutions, what we at Sampath Bank, no matter what position we’re in, keep reminding ourselves and the others around is that we are have been here everyday for 27 years, to serve our customers. Their expectations and futures are always factors in our business decisions and investment choices. So while a lot changes and a lot evolves, this commitment to the people we serve will always stay the same.
www.thesundayleader.lk
The Sunday Leader spoke to Sampath Bank’s Managing Director, Aravinda Perera, to talk about the awards, what it took the bank to achieve them, 2014 in general and plans beyond. We discussed the bank’s impressive credit growth – which has been the best in the industry – in the past threeyears, its branch expansion drive, the influence of gold price declines on the market, evolving banking as a service and the significance of the Consolidation of Finance Companies taking place at a no-crisis time.
Speaking about the mechanics of the Euromoney Award – applications, disclosure, selections and considerations, Mr. Perera, said: “The Euromoney Award is certainly prestigious, mainly due to its well-established and recognized award process, which takes several aspects of an applicant bank’s performance, core operations, forecasts and corporate activities. According to our understanding based on discussions between the bank and the organizers, Euromoney conducts three levels of assessment. The first: based on our application/submission; the second: a performance review by independent analysts, and third: an examination of media and press in the market to assess what’s been said about the bank, and its competitors.”
“Of course this might not be the complete process, but we were also told that aside from existing achievements and performance statistics, the reviewing committee also took in to consideration the potential of the bank – our growth rates and percentages, and our plans for the future. It’s a comprehensive and tedious process, which makes us all the more proud to have won the award.”
When asked about the contribution of itscustomerstowards achieving the bank’s goals, Mr. Perera, said: “Our industry exists primarily for service – to serve customers in the best way possible, and in the process develop a long-term, beneficial partnership. What keeps us striving to innovate and improve is the commitment our customers have shown us and the confidence they have placed in us to fulfill their financial needs. This belief in adding value through our business, is lived by each of our over 3,900 members to contribute to making a difference to our customers.”
Mr. Perera goes on to speak about the guidance and involvement of Chairman, Mr. DhammikaPerera and the Board, in keeping the bank focused on its mission. “The credit for an award like this belongs to everyone involved in powering Sampath Bank, whether it is the Board, the management, employees who have been with us since our inception or even new employees who continue our service-centric tradition at the counters everyday.”
Growth of customer base
Commenting on the growth of the customer base, Mr. Perera said:“For the past three years before 2014, we have had the best credit growth in the country. To make this growth sustainable, a credit growth must be met with higher deposits, which we have seen happen, and is a very positive sign. This year, however, we have seen a slowdown in credit growth; a problem compounded by lower gold prices having an effect on our sizeable pawning portfolio. This led to a decrease in portfolio’s volume and together with a churn in lending, has proved to be a new challenge for us, but we are hopeful things will turn around in the next six months.”
Gold prices
Discussing the many implications for banks and consumers alike due to the drop in gold prices, Mr. Perera, elaborated: “We have to look at the problem on a macro level, beyond the different negativities businesses experience due to it. The drop came at a time when the agricultural sector was also facing difficult conditions and we had to implement several reactionary measures, which we hoped would ease the situation for our customers. Sampath Bank introduced concessions, extended due dates as along as possible and droppedinterest rates from 24% to 15%.”
“During this time, the question did arise as to whether pawning must be considered a banking product, but I believe as long as it is a financial service, it should be. I think it’s an important part of our portfolio, and enables customers to get a fair transaction due to low annual interest rates over other alternatives that offer 10% per month interest rates as a norm. But having signed up for the Central Bank’s Guarantee Scheme, I’m confident, circumstances will improve.”
Branches
Commenting on the correlation between the growth of the customer base and their branch expansion drive, he said: “Five years ago, we had only 100 branches. Today, we have 217 and by the end of this year, we could open another five branches. So the growth of the customer base is basically accomplishedthrough branch expansion. While maintaining this as a primary approach to growth, we also launched new avenues to fulfill the requirements of the new generation of consumers who are more interested in technologically advanced solutions. To achieve this we have introduced new products such as Mobile Cash, Internet Banking and are expanding our services range on Payment Gateway.”
“These products or value additions are being put in place now to accommodate the consumer of the future who will prefer banking from their mobile devices rather than journeying to a bank branch for certain services. The volume of such transactions through these channels is steadily rising. Recognizing this shift in consumer preference, Sampath Bank was the first bank in Sri Lanka to introduce mobile banking to the market. However, even though online banking is growing, we know conventional accessibility and knowing where we are present, is still important to our customers, which is why we are unwavering on branch expansion.”
More stand-alone ATMs
Sampath Bank was the first in Sri Lanka to introduce networked banking and ATMs through its Uni-Banking system in 1988. This paved the way for more people to stay connected to their accounts, and the bank has continued to expand this service. “This year, we are going to install 50 stand-alone ATMs. For instance, there could be two branches a few kilometers apart but in between, there will be an ATM available. One could open the account at one of the branches but all dealings would be done through the convenient and close-by ATM.”
Credit cards
“Sampath Bank was the first to introduce MasterCard Credit Cards to Sri Lanka in 1989 and since then, we’ve steadily grown our credit card-user base. It’s a modern convenience invented by the finance world, and we want to enable as many Sri Lankans as possible to leverage on this. Anyone who doesn’t maintain an account with Sampath Bank is still eligible for a credit card from us, and we make every effort to create awareness and reach among the communities outside Colombo. A memorable activity we executed to do this was the ‘Town on Sale’, which was conducted in Galle, where we negotiated with 20 renowned retailers in Galle to provide special discounts to Sampath cardholders.
Future prospects
During H1 2014, Sampath Bank has reported a growth of 67.5% on PAT, which is a sign of recovery from the 2012-13 gold price-drop period. In closing, Mr. Perera, said: The upturn was expected and as a bank that absorbed most of the hits that came with the gold crisis, without allowing it to affect our consumers, we are elated the market conditions are improving. This allows us to invest more on infrastructure, development and technology that will better help us serve our customers.”
“Banks aren’t just currency storage establishments anymore. We have progressed to offer customers a multitude more in terms of services including even the payment of utility bills and online transaction facilitation. In the face of changing consumer trends, socioeconomic conditions and technological revolutions, what we at Sampath Bank, no matter what position we’re in, keep reminding ourselves and the others around is that we are have been here everyday for 27 years, to serve our customers. Their expectations and futures are always factors in our business decisions and investment choices. So while a lot changes and a lot evolves, this commitment to the people we serve will always stay the same.
www.thesundayleader.lk
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