Pan Asia Bank feted as 'Fastest Growing Commercial Bank'

Pan Asia Bank, has been recognised again as the 'Fastest Growing Commercial Bank in Sri Lanka 2015 by Global Banking and Finance Review for the second consecutive year.

London based Global Banking and Finance Review annually recognizes outstanding achievements in the financial services industry.

In addition, Pan Asia Bank's innovative leasing product "Budget Leasing" which enables customers to reach for a vehicle of higher value while paying an affordable rental, was awarded the 'Most Innovative Banking Product in Sri Lanka-2015.

Pan Asia Bank Director and CEO Dimantha Seneviratne said the bank doubled its asset portfolio, branch network and staff strength while tripling the gross income.

"Growth achieved in 2015 was significant especially in loans and receivables which had more than 30% growth (up to Q3) which was well above the industry average recorded for the same period".

"Another noteworthy achievement was our ability to contain NPLs while maintaining an impressive growth momentum. Apart from the advance growth, our balance sheet grew by over 29% crossing Rs 100 billion mark. Financial performance also improved recording over 180% growth in Net Profit After Tax up to Q3 2015; hence we are now on a strong footing to continue our robust growth momentum," Seneviratne said.
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Monetary Board raises SRR ratio in com banks from January 16

Gross official reserves, which stood at US dollars 6.5 billion at end October 2015, are estimated to have increased to around US dollars 7.3 billion by end November 2015, according to the Central Bank.

Reflecting domestic and global developments, the Sri Lanka rupee has depreciated by 8.8 percent against the US dollar in 2015.

Notwithstanding these developments, the Monetary Board is of the view that external sector policies already implemented need to be further supported by some monetary policy tightening.

The year-on-year growth of broad money (M2b) continued to expand at a high rate of 17.0 percent in October 2015 compared to 16.0 percent recorded in the previous month, driven by the expansion of credit extended to both private and public sectors by the banking system.

Amongst contributory factors, credit granted to the private sector by commercial banks increased by 26.3 percent, year-on-year, compared to 22.2 percent in the previous month.

Meanwhile, headline inflation, as measured by the Colombo Consumers’ Price Index (CCPI, 2006/2007=100), increased to 3.1 percent, on a year-on-year basis, in November 2015 from 1.7 percent in October 2015.

On an annual average basis, headline inflation increased to 0.9 percent in November 2015 compared to 0.7 percent in the previous month.

On the external front, the decline in expenditure on imports in October 2015 was greater than the decline in earnings from exports, narrowing the deficit in the trade account by 6.8 per cent, on a year-on-year basis, to US dollars 791 million.

However, on a cumulative basis, the trade deficit during the first ten months of the year widened by 2.5 percent to US dollars 6,936 million reflecting the continued increase in non-oil imports.

Meanwhile, earnings from tourism during the first eleven months of 2015 are estimated to have grown by 18.1 percent, while workers’ remittances grew marginally by 0.8 percent in the first eleven months of the year. Accordingly, the Monetary Board decided, at its meeting held on December 30, 2015, to raise the Statutory Reserve Ratio (SRR) applicable to all rupee deposit liabilities of commercial banks by 1.50 percentage points to 7.50 percent to be effective from the reserve week commencing January 16, 2016.

Furthermore, the Monetary Board decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at their current levels of 6.00 percent and 7.50 percent respectively.
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Fitch Rates ComBank debentures at 'AA-(lka)'

Fitch Ratings Lanka has assigned Commercial Bank of Ceylon's proposed Basel II-compliant subordinated debentures of up to Rs 7 b a final National Long-Term Rating of 'AA-(lka)'.

The final rating is the same as the expected rating assigned on December 22, 2015, and follows the receipt of documents conforming to information already received

The proposed issuance, which will have tenors of five and 10 years and carry fixed coupons, will be listed on the Colombo Stock Exchange.

CB expects to use the proceeds to strengthen its Tier 2 capital base and reduce asset-and-liability maturity mismatches.

The rating on the proposed debentures will move in tandem with CB's National Long-Term Rating.
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Sri Lankan shares recover from 18-month low on bargain hunting

Reuters: Sri Lankan share index recovered on Wednesday after hitting over 18-month lows in the previous session, as investors picked up battered banking and telecommunications shares, brokers said.

The bourse had lost 5.22 percent so far this year through Tuesday's close on concerns over investors shifting to risk-free assets such as government securities due to rising yields amid global worries.

The main stock index ended up 0.31 percent, or 20.02 points, at 6,554.37, edging up from the lowest close since July 7, 2014 hit on Tuesday. The index had fallen in the last seven consecutive sessions.

"We were expecting this after massive fall as investors picked up some battered big cap shares. But the market might further come down especially with continued foreign selling due to global concerns," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

The index however was still in an oversold territory with the 14-day relative strength index at 20.874 points on Wednesday, edging up from Tuesday's 17.311 points, Reuters data showed. A level between 30 and 70 indicates the market is neutral.

The turnover was at 926.04 million rupees ($6.44 million).

Foreign investors were net sellers of 312.1 million rupees worth of equities on Wednesday extending the year to date net foreign outflow to 2.26 billion rupees, compared with 4.43 billion rupees of outflow in 2015.

Analysts said local investors are worried of more monetary tightening after the central bank raised commercial banks' statutory reserve ratio by 150 basis points with effect from Jan. 16.

Following the central bank's move, the yield on 91-day t-bill rose 19 basis points to an over three-month high of 6.78 percent at a weekly auction on Tuesday.

Shares in conglomerate John Keells Holdings Plc rose 1.02 percent, while Dialog Axiata Plc jumped 2.00 percent and Sri Lanka Telecom Plc advanced 1.83 percent, pushing the overall index up. 

($1 = 143.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lankan shares fall for seventh session on margin calls

Reuters: Sri Lankan share index fell for a seventh straight session on Tuesday due to panic selling, led by margin calls after the market fell over 3.5 percent in the past six sessions, brokers said.

Fears over investors shifting to risk-free assets such as government securities due to rising yields in government securities also dented sentiment.

The main stock index ended 1.74 percent or 115.97 points down at 6,534.35, the lowest close since July 7, 2014. The index fell as much as 1.85 percent, posting its biggest fall since Aug. 24, 2015.

"Market came down due to margin calls and panic selling," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

The bourse dipped further into an over sold territory on Tuesday with the 14-day relative strength index at 17.311 points versus Monday's 22.844, Reuters data showed. A level between 30 and 70 indicates the market is neutral.

The turnover was at 997.2 million rupees ($6.94 million).

Foreign investors were net sellers of 271.4 million rupees worth of equities on Tuesday extending the year to date net foreign outflow to 1.95 billion rupees, compared with 4.43 billion rupees of outflow in 2015.

Local investors are worried of more monetary tightening after the central bank raised commercial banks' statutory reserve ratio by 150 basis points with effect from Jan. 16.

Following the central bank's move, the yield on 91-day t-bill rose 19 basis points to an over three-month high of 6.78 percent at a weekly auction on Tuesday.

Shares in Nestle Lanka Plc fell 2.09 percent, Lion Brewery Plc lost 9.61 percent and conglomerate John Keells Holdings Plc closed 1.83 percent lower, dragging the overall index.

Commercial Bank of Ceylon Plc, the country's biggest listed lender, fell 1.89 percent. 

($1 = 143.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Entrust officials swindle Rs 6 bn

There is market speculation that over Rs. 6 billion of funds at the Entrust Securities PLC has been unaccounted for.

Sources say that this amount has been increasing and no action had been taken on it.

Questions are being asked as to why no action was taken previously by authorities even after the then Chairman, Chanuka Ratwatte resigned from the company last October.

After studying the issue, the Central Bank requested a restructuring proposal from the company in November and when this was not forthcoming, it was taken over. Subsequently the management was given over to National Savings Bank to manage.

"We are taking over the company to protect the government securities market," said Governor Arjuna Mahendran at a recent media conference.

This is the first time that a Primary Dealer is being acquired by the government.

Formerly known as Ceylinco Shriram, this company crashed in 2009 during the Ceylinco group financial controversy. Subsequently Chanuka Ratwatte, a former Securities Exchange Commission Director along with a consortium took over the management. Later Entrust Securities created history in the local debt market by being the first regulated Non Banking entity under the Public Debt Department of CBSL that got listed in the Colombo bourse.

A source from the Central Bank said that they have handed over the investigations to the Criminal Investigations Department and justice will be done to those affected.

"This is a primary dealer and we want to find out who used this money and for what,"a senior official said.

Many dealers have praised the Central Bank in the manner in which this transformation was done with out creating panic in the market and trading going on uninterrupted.
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Lanka will add 45,000 hotel rooms by Q1, 2017 - Minister

Sri Lanka will add 45,000 luxury hotel rooms by the end first quarter of next year said the Minister of Tourism John Amaratunge. “Many hotels are being built. By the first quarter of next year 45,000 hotel rooms will be built in the country,” the Minister told BBC.

Minister Amaratunge said that tourist arrivals, especially from Western Europe, China, Middle East and India, had seen a significant increase.

He said that the tourist arrivals have been steadily increasing since the end of the war and recent data from the Tourist Board has shown that Sri Lanka’s tourist arrivals topped 1.8 million in 2015 rising 17.8% compared to 2014.

The Minister has clarified that the arrival numbers do not include the expatriate Sri Lankans, who hold foreign passports. This year’s budget has allocated Rs. 4 billion to promote tourism, said the Minister adding that the government plans to launch a number of programs with the allocation.

Sri Lanka hopes to attract 2.2 million arrivals for 2016 and revenue in the excess of US $ 3.6 million.

Sri Lanka was ranked second among the top 16 places recommended by lifestyle magazine, Conde Nast Traveler while a special edition of the lonely plant magazine 2016 recognizes Sri Lanka as the top 10 destinations to visit in 2016.
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