Passionately optimistic for 2021: SDB bank

THILAK PIYADIGAMA, CEO AT SDB BANK

SDB bank has emerged stronger from the COVID-19 crisis and is positioned to drive an economic revival

SDB bank not only achieved an impressive year-on-year growth of 600% in the third quarter of 2020, but also set the standard for Sri Lanka by successfully concluding a Rs1.5 billion rights issue digitally amid the ongoing COVID-19 pandemic.

“From our point of view, it was a highly successful capital raising exercise. We wanted to raise Rs1.5 billion with the rights issue, but it was oversubscribed with Rs1.7 billion. When you look back, there were many banks and organisations which offered rights issues but were not fully subscribed,” SDB bank’s CEO, Thilak Piyadigama, said.

“We not only raised capital in one of the most difficult times but also became the trendsetter of doing something digitally. Given all that, together we are happy and proud to say that we successfully completed rights issue under these times.” Excerpts of the interview follows:

Tell us about SDB bank’s successful rights issue and what makes it so special, given the economic environment we are in now?

The rights issue was important because we needed to raise capital for asset growth. We were a bit concerned when we decided to do this earlier in the year because investor sentiment was quite lukewarm then, but then the pandemic reached Sri Lanka and the country was in lockdown for about 52 days.

The need of the hour was to raise capital, so we decided to go ahead with the rights issue but simple things like delivering documents to shareholders, which is a legal requirement, could not be carried out. We talked with investors via online platforms and convinced many of them to take up the rights issue. We also took steps to digitalise the entire process including all the documentation with the help of Colombo Stock Exchange.

SDB bank was privileged to become the country’s first listed enterprise to offer a digital rights issue, and it was truly special that the offer was a resounding success: the Rs1.5 billion rights issue was oversubscribed by Rs200 million.

How has SDB bank responded to the COVID-19 pandemic and ensuing economic challenges?

Our priority was to serve our customers throughout the lockdown, so we had to keep the bank’s 94 branches across Sri Lanka open and functional without taking any health risks and ensure the wellbeing of our 1,500-strong staff. We took some extraordinary measures to make sure our clients continued to enjoy our banking products and services uninterrupted.

We consulted with health officials, and followed all health and safety, and social distancing instructions. We upgraded our service delivery infrastructure to digital platforms and encouraged customers to use them which immensely benefited them in their hour of need.

As a bank focused on uplifting the SME and cooperative sector, SDB bank is positioned to uncover growth opportunities for businesses in this segment

SDB bank continues to play its part in reviving the economy in the wake of COVID-19. The credit moratorium announced by the Central Bank was extended by us to over 32,000 customers which amounted to about Rs25 billion of our loan book. We also incurred a cost of approximately Rs500 million on account of the moratorium which we consider an important and significant contribution to the economy.

The bank’s earnings for the September 2020 quarter grew an impressive 600%, how was this possible?

The most important factor behind this performance is our Team. There was a strategic plan for the year which was being rolled out even before the pandemic hit us. When COVID-19 struck, our people accepted the challenge, stepped up and delivered. The bank was already experimenting with ‘Work from Home’ so the transition into remote working during the lockdown was a smooth one. Our digital platforms also helped us stay connected with clients and remain attuned to their financial needs. All this helped us to achieve growth.

We expect this momentum will continue for the rest of the year and 2021 too. We have placed ourselves in a strong position for that with a threeyear strategic plan which we will continue to act. Our digital products and services will be continuously upgraded, and we are committed to making the necessary investments.

As a bank focused on uplifting the SME and cooperative sector, SDB bank is positioned to uncover growth opportunities for businesses in this segment: for instance, the government has placed great emphasis on the agriculture sector, earmarking it for growth with several budget proposals. There is a lot to be optimistic about, but it is not going to be a walk in the park. I would like to say that we are passionately optimistic about 2021.

How is SDB bank contributing to the revival of the economy?

Our focus on the SME and cooperative sector is where we are making the biggest contribution. SMEs contribute 52% to Sri Lanka’s GDP and 80% of SDB bank’s business comes from rural areas where we concentrate our operations. We have already established the infrastructure for banking and financial services in the rural economy placing us in a position to uplift the country’s fortunes from the bottom up and while fostering inclusivity.

In terms of reviving the economy, we at SDB bank reduced lending interest rates even before the Central Bank eased monetary policy rates and we assisted customers who could not qualify for the Central Bank’s credit moratorium scheme. I believe the bank exceeded everyone’s expectations during the pandemic and we are strongly placed to drive the economic revival and bring about prosperity for all.

Passionately optimistic for 2021: SDB Bank

THILAK PIYADIGAMA, CEO AT SDB BANK

SDB bank has emerged stronger from the COVID-19 crisis and is positioned to drive an economic revival.

SDB bank not only achieved an impressive year-on-year growth of 600% in the third quarter of 2020, but also set the standard for Sri Lanka by successfully concluding a Rs1.5 billion rights issue digitally amid the ongoing COVID-19 pandemic.

“From our point of view, it was a highly successful capital raising exercise. We wanted to raise Rs1.5 billion with the rights issue, but it was oversubscribed with Rs1.7 billion. When you look back, there were many banks and organisations which offered rights issues but were not fully subscribed,” SDB bank’s CEO, Thilak Piyadigama, said. “We not only raised capital in one of the most difficult times but also became the trendsetter of doing something digitally. Given all that, together we are happy and proud to say that we successfully completed rights issue under these times.” Excerpts of the interview follows:

Tell us about SDB bank’s successful rights issue and what makes it so special, given the economic environment we are in now?

The rights issue was important because we needed to raise capital for asset growth. We were a bit concerned when we decided to do this earlier in the year because investor sentiment was quite lukewarm then, but then the pandemic reached Sri Lanka and the country was in lockdown for about 52 days.

The need of the hour was to raise capital, so we decided to go ahead with the rights issue but simple things like delivering documents to shareholders, which is a legal requirement, could not be carried out. We talked with investors via online platforms and convinced many of them to take up the rights issue. We also took steps to digitalise the entire process including all the documentation with the help of Colombo Stock Exchange. SDB bank was privileged to become the country’s first listed enterprise to offer a digital rights issue, and it was truly special that the offer was a resounding success: the Rs1.5 billion rights issue was oversubscribed by Rs200 million.

How has SDB bank responded to the COVID-19 pandemic and ensuing economic challenges?

Our priority was to serve our customers throughout the lockdown, so we had to keep the bank’s 94 branches across Sri Lanka open and functional without taking any health risks and ensure the wellbeing of our 1,500-strong staff. We took some extraordinary measures to make sure our clients continued to enjoy our banking products and services uninterrupted. We consulted with health officials, and followed all health and safety, and social distancing instructions. We upgraded our service delivery infrastructure to digital platforms and encouraged customers to use them which immensely benefited them in their hour of need.

SDB bank continues to play its part in reviving the economy in the wake of COVID-19. The credit moratorium announced by the Central Bank was extended by us to over 32,000 customers which amounted to about Rs25 billion of our loan book. We also incurred a cost of approximately Rs500 million on account of the moratorium which we consider an important and significant contribution to the economy.

The bank’s earnings for the September 2020 quarter grew an impressive 600%, how was this possible?

The most important factor behind this performance is our Team. There was a strategic plan for the year which was being rolled out even before the pandemic hit us. When COVID-19 struck, our people accepted the challenge, stepped up and delivered. The bank was already experimenting with ‘Work from Home’ so the transition into remote working during the lockdown was a smooth one. Our digital platforms also helped us stay connected with clients and remain attuned to their financial needs. All this helped us to achieve growth.

We expect this momentum will continue for the rest of the year and 2021 too. We have placed ourselves in a strong position for that with a threeyear strategic plan which we will continue to act. Our digital products and services will be continuously upgraded, and we are committed to making the necessary investments. As a bank focused on uplifting the SME and cooperative sector, SDB bank is positioned to uncover growth opportunities for businesses in this segment: for instance, the government has placed great emphasis on the agriculture sector, earmarking it for growth with several budget proposals. There is a lot to be optimistic about, but it is not going to be a walk in the park. I would like to say that we are passionately optimistic about 2021.

How is SDB bank contributing to the revival of the economy?

Our focus on the SME and cooperative sector is where we are making the biggest contribution. SMEs contribute 52% to Sri Lanka’s GDP and 80% of SDB bank’s business comes from rural areas where we concentrate our operations. We have already established the infrastructure for banking and financial services in the rural economy placing us in a position to uplift the country’s fortunes from the bottom up and while fostering inclusivity. In terms of reviving the economy, we at SDB bank reduced lending interest rates even before the Central Bank eased monetary policy rates and we assisted customers who could not qualify for the Central Bank’s credit moratorium scheme. I believe the bank exceeded everyone’s expectations during the pandemic and we are strongly placed to drive the economic revival and bring about prosperity for all.

 

As a bank focused on uplifting the SME and cooperative sector, SDB bank is positioned to uncover growth opportunities for businesses in this segment