Nation Lanka to infuse Rs. 700 mn. fresh capital through deal with foreign party

Private placement with Luxembourg incorporated company

Nation Lanka Finance PLC, previously a member of the Ceylinco group under new management since 2011, is seeking to infuse Rs.700 million fresh capital into the company through a private share placement with a Luxembourg company, shareholders have been told.

The company has said in a circular that the new management has redeemed more than 95% of debt instruments of approximately Rs.1 4 billion owed to creditors under the previous Ceylinco regime.

"Nation Lanka is one of the very few companies from the previous Ceylinco regime to settle such liabilities," the circular said. "The company has also been able to record a consolidated net profit of Rs.38 million for the nine months ending December 31, 2013 after an absence of over five years."

The Luxembourg company, GEM Global Yield Fund LLC SCS has been described as "strategic investor" incorporated under the laws of Luxembourg.

The circular says that the total consideration of Rs.700 million will be infused to Nation Lanka in several tranches over a maximum period of 30 months from the date of signing the agreement with the investor on February 4, 2014.

The price per share and the number of shares to be issued for the consideration of Rs.700 million would be determined by a formula agreed upon by the company and investor who will also get up to a maximum of 67.5 million warrants at an exercise price of Rs.9.99 per warrant aggregated to the value of Rs.674.325 million.

The warrants are convertible to ordinary shares within four years of the date of signing the agreement (Feb. 4, 2014).

Nation Lanka has told its shareholders that the placement formula takes into consideration average volumes and price of the company’s shares traded on the CSE.

For each tranche, the company will issue a "placement notice" to the investor stating the amount of shares offered (placement amount) and the price per share (placement price) for that particular tranche of funds.

The circular has given an example of how the formula works taking a hypothetical placement notice issued on Feb. 5, 2014.

This explains that –

- 15 Trading days immediately preceding the date of the relevant placement notice is from 10th January 2014 to 03rd February 2014,

- The actual arithmetical average of Daily Trading Volume during the hese 15 trading days is approximately 1.4 million shares,

- Placement amount (offered quantity in each tranche) is 14 million shares (10 times of the arithmetical average of the daily trading volume during the 15 trading days immediately preceding the date of the relevant placement notice),

- Minimum quantity the investor would subscribe is 7 million shares (50%) with the option to elect to subscribe for 28 million shares (200%) at the investor’s discretion,

- The actual weighted average closing price during the 15 trading days immediately preceding the date of the relevant placement notice is Rs.8.85/- per share,

- Nation Lanka would set the placement price at Rs.9/-0 per share,

- The investor subscribes at Rs.8.10/- per share (90% of the placement price),

- Accordingly, under tranche 01 and this example, the investor would send Nation Lanka a minimum of LKR 56.7 million with the option to go up to LKR 226.8 million.

An extraordinary general meeting of the company has been summoned on March 25, to obtain shareholder approval for the private placement of shares and the issue of unlisted private warrants.

Nation Lanka’s Board of Directors comprises: Messrs. Jayantha Dharmadasa, Asanga Seneviratne, J. Rudra, Harshith Dharmadasa, R. Ramanan, Kirthie Karunaratne and Sunil Kandegedara.
www.island.lk

Carson’s group net profits down sharply to Dec. 2013

Carson Cumberbatch PLC had seen a sharp drop in group net profits during the nine months ended December 31, 2013 with earnings down 59% to Rs.2 billion from Rs.4.9 billion a year earlier although at company level both revenue and profits were up – revenue up 8% to Rs.695.1 million and the net profit up 18% to Rs.496.9 million.

Segmentally, the Carsons group’s portfolio and asset management business had boosted pre-tax profits 267% to Rs.1.08 billion during the nine months under review while its beverage business saw the pre-tax profit up 18% to Rs.1.4 billion.

Investment holdings were down 5% to Rs.197 million, oil palm plantations down 87% to Rs.948 million and leisure down 63% to Rs.36 million.

In the 9-month review of operations, Carsons said that the sharp drop in its group net profit was predominantly the result of increase in foreign exchange losses and drop in fair value gain of biological assets (oil palm plantations) year-on-year.

"Reported foreign exchange losses which was at Rs.4.6 billion for the period, surged 385% relative to that of the previous financial year, triggered by translation losses on US dollar denominated long term loans of the plantation sector," the review explained.

"Of the Rs.4.6 billion foreign exchange loss, Rs.0.5 billion was realized, resulting in a significant unrealized loss of Rs.4.17 billion which is a non-cash change since the underlying US dollar borrowings are naturally hedged against dollar earnings of the sector."

It explained that the other significant contributory non-cash item affecting the consolidated results - fair value gain of biological assets - had decreased by Rs.1.55 billion due to commodity price drop, plantation profile etc against the comparative period the previous year.

However, when comparing the adjusted group profitability for the first nine months of 2013 and the comparative period the previous year, the nine months had "proved to be a positive one for Carson Cumberbatch PLC with the adjusted profit before-tax improving by 9.75% year-on-year to settle at Rs.5.4 billion.’’

The period under review had seen investment holdings continuing to lose – a loss of Rs.197 million against a loss of Rs.209 million a year earlier, oils and fats posting a loss of Rs.167 million against a loss of Rs.1.46 billion a year earlier while real estate saw profitability double to Rs.64 million and leisure saw the pre-tax profit down 63% to Rs.36 million.

Discussing segmental performance, the review said that its portfolio and asset management business had been affected by the announcement of a possible cutback in quantitative easing by the Federal Reserve signaling a sell off across global markets.

Although the ASPI had touched a high of 6,488 points during May last year, it had thereafter headed down though during the latter part of the year the market resurged with foreign buying coming in on selected stocks.

"Further, the continuous drop in yields in the alternate asset class on the fixed income side also attracted funds to equities at lower forward valuations," the review said.

The portfolio and asset management segment comprising Ceylon Guardian Investment Trust PLC and its subsidiaries reported a consolidated profit after-tax of Rs.1.02 billion for the nine months under review against a profit of Rs.274.2 million posted a year earlier.

The increase in profits was triggered by realized gains made during the period in view of market movements.

Oil palm crop production for the nine months was lower than the previous year due to biological factors and the drought which prevailed for the most part. However better crops were expected in the second half partly offsetting the crop deficit.

Carsons expected consumption of palm oil based products as likely to increase, thereby improving prospects for oil palm plantations. However, the possibility, of lower commodity price prices resulting from a stronger dollar remains a concern.

Favourable industry conditions and substantial re-engineering efforts undertaken in the oils and fats segments had enabled the losses to be slashed from Rs.1.42 billion to Rs.171.8 million during the period under review.

In the beverage segment, the pre-tax profit improved to Rs.1.4 billion from Rs.1.2 billion a year earlier while the leisure segment benefited from increased tourist arrivals although most of the star rated hotels continued to experience stagnant occupancy levels.

This was mainly due to the emergence of unclassified accommodation offering more competitive prices than the star rated hotels.

Carsons has a stated capital of Rs.1.1 billion, a capital reserve of Rs.287.6 million and revenue reserves of Rs.7.83 billion. Total assets ran at Rs.10.9 billion and total liabilities at Rs.1.68 billion.

Bukit Darah PLC with 45.68% is the biggest shareholder of Carsons followed by Tower Investments (Pvt) Ltd. (10.66%), Fulcrum (Pvt) Ltd (9.79%) and Lake View Investments (Pvt) Ltd (8.79%). The EPF owns 2.61% of the company where the controlling interest is held by the Selvanathan family.

The Carsons share traded at a high of Rs.459 and a low of Rs.340 during the nine months under review with net assets per share standing at Rs.47 for the company and Rs.153.52 for the group.

The directors of the company are: Messrs. Tilak de Zoysa (Chairman), H. Selvanathan(Deputy Chairman), M. Selvanathan, I. Paulraj, D.C.R. Gunawardena, S.K. Shah, P.C.P. Tissera, V.P. Malalasekera, M. Moonesinghe, E. Mohideen and R.Theagarajah.
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Gold price decline has hurt South Asian Banks: HNB Chairperson

Voting rights of Harry companies owning 18.24% restricted to 10%

The price of gold had declined 28% in 2013 ending a 12-year bullish market for the precious metal adversely affecting gold backed pawning portfolios of banks in South Asia, HNB Chairperson Ranee Jayamaha has said in the bank’s annual report.

"Although many Sri Lankan banks managed to scale down the portfolio through promoting redemption, losses incurred on the auctioning process remained a significant challenge to banks with large pawning portfolios," she said.

The report reveals that the voting rights of three Harry Jayawardena controlled/influenced companies, Milford Exports, Stassen Exports and Distilleries, together owning 18.24% of HNB’s voting shares has been limited to 10% with effect from Mar. 15, 2012, ``as the voting rights of such percentage is deemed invalid from that date.’’

However, it has not been stated that the concerned parties have been required to dispose these shares.

HNB had closed 2013 boosting income both at bank and group levels but seen profit after-tax decline 7% to Rs.7.01 billion for the bank and 3.6% to Rs.7.81 billion for the goup, the results revealed.

Jayamaha said that the bank’s asset base had crossed the Rs.500 billion mark and the non-performing loan ratio of the bank marginally reduced to 3.64% from 3.66% the previous year.

She said she was delighted to propose a final dividend of Rs.7 per share for both voting and non-voting shares on top of an interim dividend of Rs.1.50 per share paid last December giving shareholder a total dividend of Rs.8.50 per share for the year under review.

She welcomed Mr. Jonathan Alles as HNB’s new Managing Director/CEO effective July 2013 succeeding Mr. Rajendra Theagarajah following the latter’s retirement.

Alles joined HNB in 2010 as its Chief Operating Officer and was appointed Deputy CEO in September 2011, thereafter assuming the position of MD/CEO.

"The Board is confident that Jonathan’s leadership qualities, combined with his strategic thinking and extensive experience locally and overseas in the financial services industry, make him the right person to drive HNB to success over the coming years," she said.

"I am confident that his approach and track record of delivering results with his innovative business drive and openness will be valued by shareholders and employees alike."

Jayamaha expected the proposed Central Bank initiative to consolidate banking and non-banking financial institutions to bring about more resilience in the financial system.

"However, the institutions/entities would be required to deal with the issue of securing necessary finances for the purpose, in addition to the operational challenges involved in the process," she said.

She expressed the view that the reduced interest margins in a low interest environment would force banking institutions to look for alternative sources of income generating activities. Given the intense competition, the success of this search would depend on the effectiveness of the business strategies adopted by banks, she said.

"While technological advances would pave the way for future business growth, challenges involved in the use of technology cannot be ignored. This calls for a collective industry-wide approach to deal with technology based risks, especially cyber crimes," she said.

She saw 2014 as "another challenging year" saying that in a low interest era, the bank needed to improve its fee generating capabilities and look for new revenue streams due to pressure on margins.

"The proposed new taxes and increased regulatory costs would bring in significant impacts on the profitability of the bank," she warned.

"We will look to technology as an enabler; since we believe that understanding our client’s needs and finding a combination of technological solutions has worked well for the bank."

The new MD/CEO, Mr. Jonathan Alles reported that high interest rates had driven depositors towards high yielding fixed deposits and subordinated debt issues offering tax waivers and liquidity. Notwithstanding this the bank had been able to grow its savings base by 14% through focused marketing communication and a series of regional activities in the savings space.

"We were successful in containing our NPA ratio to 3.64% against an industry average of 5.6% from continuous and concerted efforts through aggressive recoveries, active monitoring and prudent lending," he said.

Alles also said that HNB had identified their top 100 personnel "who will be coached and given the necessary exposure to develop as the future leaders of the bank."

He also reported that during the year under review they had raised USD 49 million on very attractive terms from China Development Bank towards longer term project financing.

The state sector and the Distilleries/Stassen group are major shareholders of HNB where SLIC the top voting shareholder with 14.92% of the voting capital followed by the EPF (9.97%), Milford Export Ceylon Ltd (8.09%), Mr. S.E. Captain (7.42%) and Stassen Exports (7.01%).

The report also says that an unnamed entity has been removed from the register of shareholders with effete from August 19, 2010 on a direction by the Central Bank but has not explained the reason for such removal nor disclosed what will follow. In previous instances the sale of such unregistered shares has been permitted.

The directors of the HNB are: Dr. Ranee Jayamaha (Chairperson), Mr. Jonathan Alles (MD/CEO), Ms. M.A.R.C. Cooray (Senior Director), Dr. W.W. Gamage, Dr. L.R. Karunaratne, Mr. L.U.D. Fernando, Mr. Sujeewa Mudalige, Ms. D.S.C. Jayawardena and Mr. Rusi S. Captain.
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Commercial Bank steps up investment banking activities

The Commercial Bank of Ceylon has decided to increase its involvement in the sphere of investment banking, through its operational unit specialised in such activities, titled Commercial Bank Investment Banking.

At the outset, Commercial Bank Investment Banking focused on innovative financial instrument structures such as Securitisations, Project Loans and Syndicated Term Loans. The main emphasis was on structuring and in investing in these deals. Commercial Bank Investment Banking also engages in structuring, management and underwriting of Initial Public Offerings (IPOs), functioning as Bankers to the Issue for IPOs, and structuring and management of private placements of shares and debentures.

The new revenue generating products established by Commercial Bank Investment Banking include Margin Trading, which involves providing finance for the purchase of listed shares by customers, as well as Custodian and Escrow Services, which revolves around the Bank facilitating customer transactions by acting as an independent facilitator.

General corporate advisory services are also provided by Commercial Bank Investment Banking in areas such as Mergers and Acquisitions, Corporate Restructurings and Management Buyouts.

In this interview, Commercial Bank’s Assistant General Manager – Corporate & Investment Banking, Naveen Sooriyarachchi elaborates on the services offered by Commercial Bank Investment Banking.

Excerpts:

What is the involvement of Commercial Bank in investment banking?
Commercial Bank is presently the largest privately owned bank in the country and also has the highest market capitalisation among listed banks in Sri Lanka. The main strengths of the Bank which were originally in corporate and trade finance have now been augmented by a significant retail business which contributes a substantial share of revenue and profits, as well as by a large presence in Bangladesh.

The main reason for the Bank entering the Corporate Finance space initially, and in a more gradual and focused manner the Investment Banking space, has been to expand the range of products and services offered over and above standard commercial banking solutions to encompass a broad diversity of financial products. We are currently focused on strengthening our position in investment banking.

What does Commercial Bank Investment Banking do?
The initial focus was on structuring and managing the Bank’s investments and lending activities in areas such as securitised investments, syndicated term loans and project loans. The focus of all this activity was debt of one type or another.

The Unit acquired equity-related investment banking expertise by involvement in some equity-raising assignments, initially with the joint structuring and management of the Ceylon Hospitals Limited IPO in 2003. Thereafter, multiple equity and debt structuring and management assignments were executed. The staff strength also increased as more products such as Margin Trading were added to the product portfolio.

Commercial Bank Investment Banking retains its traditional strengths of debt structuring and investment, as seen in high volume debenture investments in the past year. However, this is complemented with a range of equity based products, such as management of private placements and IPOs, as well as other products and services such as Margin Trading and Custodian services.

How would you rate yourselves against the competition?
Well, we are not the largest. I think when we look at the publicly available figures Commercial Bank Investment Banking would probably be in the middle at the moment. Of course the hope is that we will grow in size and scope, while providing customer convenience and satisfaction.

What is your main strength as an investment banking operation?
The main strength is probably the ability to integrate both our commercial banking and investment banking services in offering solutions to our customers. One example is in functioning as Bankers to the Issue for listed securities offerings such as IPOs, in which our extensive branch network and customer relationships strongly complement the services we can offer on the structuring and management side. Another example is when Commercial Bank Investment Banking structures a debenture or securitization, it also has the capacity to take up a substantial portion of the issue. This will provide considerable comfort to the issuers and a great deal of confidence to the other investors.

What other areas do you think you will get into in future?
The potential exists to either buy or build up fund management and stock broking businesses, within the overall scope of the investment banking operation, subject to regulatory approvals and the viability of the individual businesses. So this sort of inorganic growth is an area we might consider in the future.

To sum up, what is your vision for Commercial Bank Investment Banking?
To be a relatively large investment bank while providing innovative and efficient solutions for our customers and contributing to national economic growth by facilitating equity and debt fund raising assignments enabling companies to successfully execute their new ventures, projects and operations.
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Sampath Group records Rs 4.79 Bn pre-tax profit for the year ended 31st December 2013, despite many challenges

Sampath Bank Group
The Sampath Group comprises of Sampath Bank Plc and four subsidiaries providing diverse financial services. The Bank is the main entity of the group contributing 94% to the Group’s pre-tax profit and Sri Lanka’s third largest non-government Bank, with an asset base of Rs 382 Bn and a network of 212 branches throughout the country.

Our Performance
2013 has been another challenging year for the banking sector, with a moderate growth due to many challenges posed by the external market forces, which included excess liquidity, lower credit demand and worldwide decrease in gold prices etc. Despite the strong growth recorded in key core banking income areas such as net interest income and commission income, profit growth was adversely affected by high FX revaluation gains in 2012 and significant impairment provisioning made against pawning advances in 2013, consequent to the drop in gold prices.

Sampath Bank Group has recorded a profit before tax of Rs. 4.79 Bn for year ended 31st December 2013 with the Bank recording a profit before tax of Rs.4.5 Bn. The post –tax profit of the Group and the Bank for the same period amounted to Rs 3.64 Bn and Rs 3.43 Bn respectively.

Net Interest Income (NII)
NII, which is the main source of income from the fund based operations and representing over 70% of the total operating income, rose from Rs 11,612.5 Mn in 2012 to Rs 14,365.8 Mn in 2013, recording a significant growth of 23.7%. This significant growth in NII was largely due to the high growth rates recorded by the Bank in key business volumes, namely 24.9% in customer advances, 23.5% in total assets and 24.1% in deposits during the year ended 2013. It was also possible to maintain the Net Interest Margin (NIM) almost at the same level (4.16%) , as compared to 4.17% in 2012, despite falling lending & Treasury Bill rates, increase in cost of funds, mainly through diverting resources to more remunerative products and effective re-pricing of both assets and liability products.

Net Fee and Commission Income
Net Fee and Commission income totalled Rs 2.5 Bn in 2013, an increase of 18.4% over the previous year. Net Fee and Commission income represented 13.0% of the Total Operating Income in line with aggressive growth of business volumes in our card operations and trade services. We have aggressively grown our card operations and are one of the leading local Banks in this business line. We also implemented a strategy to gain market share in trade finance through provision of a superior service and extended business hours.

Other Operating Income
Other income of the bank dropped by Rs.1,433Mn to Rs 2,671Mn in 2013 compared to Rs 4,104 Mn., in 2012, This was mainly due to the drop in the revaluation gains on the FCBU reserve by Rs.994 Mn over the previous year. We continued to enhance arrangements with Correspondent Banks and Exchange Houses to attract more inward remittances channeled by migrant workers. The network covers 87 exchange houses located in 5 main countries represented by 10 Business Promotion Officers.

Operating Expenses
Operating expenses increased by 14.9% from Rs 9.2 Bn in 2012 to Rs 10.6 Bn in 2013 due to inflation, increase in staff cost and the island-wide programme to upgrade branches to a consistent standard. Careful management of expenses has enabled us to achieve a deceleration of operating expenses growth rate for the second consecutive year. Curtailing growth of operating expenses has been possible due to our low cost branch model which deploys technology effectively to centralise specialised functions.

Impairment Loss on Loan and Receivables
Total impairment losses increased dramatically from Rs 65 Mn to Rs 3,490 Mn mainly due to the impact of a sudden sharp decline in gold prices on the pawning portfolio. The impairment charge against the pawning portfolio for the year amounted to Rs 3,509 Mn. The net impairment charge from all other advances was Rs 214 Mn. Financial investments recorded a mark to market gain of Rs 276 Mn. The impairment provision on pawning has been computed taking into account the gold prices prevailing as at 31st December 2013 for the entire pawning portfolio covering both facilities in the "fallen due" category as well as "not fallen due" category.

We strategically reduced the pawning portfolio (including interest receivable) in view of the volatility in gold prices which impacted the entire financial services sector since April 2013 and have reduced the Bank’s exposure from 25.4% at the beginning of the year to 19.7% at the end of the year.

Business growth
Assets
Total assets of the Bank grew by 23.5% above the industry growth rate of 16.6% for 2013 according to a client focussed strategy driven by a dedicated team of banking professionals. We continued to maintain credit growth rates above the industry average due to our unrelenting focus on providing a superior service to all segments of our clients. The Bank managed to grow its loan book by 24.9% despite the Banking sector recording a disappointing growth rate of 8.8% due to low demand for credit as underlying economic growth decelerated.

Liabilities
The deposit growth of the Bank during the year was 24.1% as against 24.3% growth achieved in 2012. No major campaigns were carried out to attract deposits as there was excess liquidity. Sampath Bank engaged HSBC to raise a syndicated loan of USD 45 Mn which was increased to USD 100 Mn in view of the vibrant market appetite making it the first successfully concluded deal over the USD 100 Mn mark by the Bank. A further loan of USD 20 Mn was raised from Proparco, the ‘private sector’ arm of the French Development Agency (AFD), to finance renewable energy projects which the Bank believes will be a key growth sector in the country. Further, Bank raised Rs 5 Bn by issuing unsecured subordinated redeemable 5 year debentures in the local market.

Performance Ratios
The cost to income ratio increased slightly from 58.24% in 2012 to 59.14% in 2013 due to drop in income growth as a result of higher FCBU revaluation gain in 2012 over 2013. ROA and ROE declined in line with the decrease in profits due to the impairment charge on the pawning portfolio.

Statutory Liquid Asset Ratio recorded an increase from 22.4% as at 31-12-2012 to 27.6% as at 31-12-2013. The reduction of the Statutory Reserve Requirement which stood at 8.0% by 2.0% to 6.0% in July too contributed for the excess liquidity . Though this ratio was somewhat above the minimum requirement of 20%, it was lower than the industry average of 37.7% as the bank maintains a prudent trade-off between liquidity and interest earning assets.

Capital adequacy ratios
Tier 1 capital adequacy ratio recorded a decline over 2012 due to reduction in profit after tax and increase in assets. However, total capital adequacy ratio improved fro, 13.6% in 2012 to 14.2% as at 31-12-2013. This was mainly due to additional Tier II capital raised by issuing Rs 5Bn worth of Rated Unsecured Subordinated Redeemable Debentures during the year 2013.

Dividend
The Directors have recommended a final cash dividend of Rs 8.00 per share in comparison to the last year Rs 12.00 .

Infrastructure growth
We commenced the year with 209 branches and added 3 branches during the year in Karagampitiya, Thalahena and Gampaha Super. Further we also opened a pay office at the Mattala Rajapakse International Airport. All branches were upgraded to provide a pleasant environment in which to carry out banking transactions and to better reflect the brand. Additionally, 4 branches were upgraded to super branches in 2013. They are open for business from 8.00 am to 8.00 pm and are located in busy towns taking the total of super branches to 8.

Our ATM network increased with 12 new installations taking the total ATM network to 274. Three ATMs are foreign currency ATMs enabling conversion of US Dollars and Euros to Sri Lankan rupees and are conveniently located in the tourist hubs of Colombo, Kandy and Negombo. We installed 2 off-site ATMs at the Southern Expressway at the Welipenna Interchange Zone, for the convenience of the commuters. First time in Sri Lanka card less cash ATM concept was introduced and now operating in selected ATMs.

Channel Products
The Bank’s expanding range of channel products enhances value to the customer, facilitates ease of transacting with the Bank and managing their finances, which provides a competitive edge. This year a mobile app was launched for smart phones and tablets on both iOS platform and Android platforms and was made available to the customers through the Apple and the Google Play Stores. We will continue to invest in technology for branchless banking in view of the country’s high penetration rate over 100% for mobile phones and increasing internet based payments.

Our customers benefit from the ability to send and receive cash instantly, ability to withdraw around the clock, 24 hours call centre assistance, accessibility through a wide agent network, remittance notification via SMS to beneficiary and the support of an island wide network of 212 branches. They also have a choice of transaction types to suit their particular circumstances which include Pay on Identification, Sampath Bank account credits, other bank account credits, receive to mobile and withdraw from ATM and payment to wow.lk and anything.lk to purchase goods via internet. We will continue to increase accessibility and penetration into migrant worker markets and invest in product innovationS to tailor solutions for this key customer segment.

Sampath Bank continues to be the only Bank in Sri Lanka to have the world’s three leading card franchises: Visa, MasterCard and American Express®. We aim to be the leading Debit and Credit Card issuer in the country by providing superior value, security, transparency and convenience that meet the lifestyle requirements of our customers.

Future
Sampath Bank has demonstrated its ability to grow by focussing on enhancing customer experiences through improved service quality effectively combining human resources and technological innovation. We have proved resilient to external shocks through effective risk management processes and our ability to respond to changes in our operating environment. Our strategy was to support the country’s ambition to be the regional hub for Energy, Aviation, Maritime, Knowledge, Commercial and Tourism. We also continued our support to the agriculture sector, focussing particularly on the value addition to these commodities and also ensured that we maintain a minimum of 10% lending to the agriculture sector as directed by the Central Bank.

Accolade
Sampath Bank has been selected as the "Best Bank in Sri Lanka - 2013" by the prestigious Business Magazine "The Euromoney". Euromoney is a highly reputed global financial magazine involved in selecting best performing banks worldwide .Bank also won two awards at the recently concluded "National Best Quality Software Award-2013" Silver award for "Sampath iOS Android Application" and Merit award for "E-Reconciliation System". Sampath Bank has been ranked 7th among the Business Today Magazine’s "TOP TWENTY FIVE" 2012 - 2013 companies. (Last year the Bank occupied the 12th place).

At the National HRM Conference 2013, out of three National Level awards presented for Excellence in HR, the bank has been able to clinch two awards for Best Talent Management (HRM) and People Development (Training). Further the bank has won a joint Runner Up award for "Sampath Vishwa" under ‘Private Sector Projects’ at the National Project Management Excellence Awards 2013.The bank was declared the 1st runner up at the Best Corporate Citizen Sustainability Awards 2013, and also won awards for Sector winner – Economic Sustainability, Category winner – Economic contribution and top 10 category recipient.

External rating
In the 2013 rating assessment, considering the healthy asset quality, better compliance, transparency, capital adequacy, internal control systems & processes of the Bank, RAM Ratings Lanka has reaffirmed AA (stable) rating for Sampath Bank, in their rating assessment. In the same year, the overall credit rating of the Bank’s "AA-"lka (Stable) has been reaffirmed by Fitch Rating Lanka.

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Sri Lanka hotels see "excellent" winter season

Mar 22, 2014 (LBO) - Sri Lanka's hotels have seen a good winter season with high occupancy levels, backed by stable pricing and strong arrivals from Western Europe, Russia and China, officials said.

"Occupancies have increased really," Jayantissa Kehelpannala, head of Sri Lanka's tourist hotels association said.

"Sometimes it is very difficult to even get a room. This season has been excellent."

The so-called winter season starts in the last quarter of the year and extends into the first quarter of the following year.

Last November however a state order to artificially push up pricing in the Colombo city coinciding with a Commonwealth summit meeting pushed down overall arrivals to the country.

A state dictated pricing floor on 5-star graded hotels has also drawn complaints from at least one hotel and travel agents for keeping tourists away.

In 2012 occupancy dropped in large hotels tracked by the state tourism promotion agency partly due to lower domestic tourists amid a balance of payments crisis which slowed economic activities.

The tourism promotion office then suppressed monthly occupancy numbers which have not been released for more than one year now.

Sri Lanka's hotel rates rose steeply after 2009, when a 30-year civil war ended generating a shortage of rooms amid renewed interest from travellers.

Director general of Sri Lanka's state tourism promotion office, D S Jayaweera said in the first two months of 2014 about 288,000 tourists had visited Sri Lanka, which was equal to the total annual arrivals of 2008.

Total earnings from tourism for the first two months of 2014 were estimated to 390 million US dollars, he said, compared to 390 million US dollars for the whole of 2008.

Kehelpannala said demand and supply had brought 'stability' to prices.

"I would not say prices came down," he said. "There was a stability that came into to the pricing."

In 2012 the Sri Lanka rupee fell to 130 to the US dollar from 110 to the US dollars after state intervention in energy pricing using bank credit ultimately accommodated by printed money led to a balance of payments crisis and collapse of the currency.

In such a situation, analysts say hotels could cut their dollar prices and still get equal or higher rupee revenues.

Sri Lanka is now also getting many customers from internet booking engines, which was absent before the end of the war.

Up to 25 percent off all bookings are now thought to come from internet bookings, Kehelpannala said.

"New markets have been opening up: Russia, Ukraine and the CIS countries," Kehelpannala said. "China is also seeing growth."

In the first two months of the 2014 arrivals from Russia surged 91.7 percent to 20,423 and Ukraine was up 13.7 percent to 11,327, according to official data.

Arrivals from Poland, a newly developing market was also up 56.7 percent to 4,451.

China on which state promotional efforts in particular has been focused, rose 119.2 percent to 21,098.

Arrivals from UK, the largest single generating market after India rose 9 percent to 27,212 and Germany rose 15.8 percent to 20,516 according to official data.

"The encouraging sign is that we have seen growth from the traditional markets also, like France and UK, Germany."

"I think with this kind of success that we had this winter hotels will look at putting their prices up."