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Friday February 23rd, 2024

Sugath Gunasekera on leading Sri Lanka’s biggest bank

Sugath Gunasekera, General Manger of Bank of Ceylon An interesting fact: BOC’s General Manager, D.P.K. Gunasekera is popularly known as Sugath Gunasekera, a name he earned as a youngster that stuck with him through all these years until it almost eclipsed his given name

Four decades ago, Sugath Gunasekera joined the Bank of Ceylon as a teller, counting customers’ monies when they made deposits and withdrawals over the counter in the bank’s Vavuniya branch. A rural kid, he was happy to do just that until he crossed paths with the bank’s former General Manager, B.A.C. Fernando, who convinced and inspired a young Gunasekera to dream big, work hard, and apply himself diligently in higher education. Today, as the General Manager of the country’s largest bank, he is inspiring the bank to think unconventionally during the greatest crisis of our generation, Covid-19.

BOC is the country’s largest bank, and as such, the most strategically important one. As its General Manager, how do you define your purpose, and what is your vision for the bank?

For over eight decades, BOC has been the backbone of the economy as the largest, and therefore most strategically important, bank in Sri Lanka. As responsible custodians of the bank, the management team and I, as General Manager, are duty-bound to sustain and steer the bank to a position of greater strength to drive social wellbeing and economic growth.

We are not just a behemoth of a financial institution with a proven track record. With an enviable islandwide branch network and offices in the Maldives, India, Seychelles, and London, the bank has more than Rs3 trillion in assets, public deposits worth over Rs2.5 trillion and a loan book exceeding Rs2 trillion. BOC is also the only bank to surpass the Rs50 billion mark in brand valuation. Yet, we remain firmly grounded and in touch with the aspirations of a nation.

We have time-and-time-again demonstrated our indefatigable commitment to Sri Lanka, especially during a crisis such as the Covid-19 pandemic. BOC recorded the highest disbursement under the Central Bank’s Saubhagya Working Capital Loan scheme of 18,589 facilities, worth Rs39.1 billion, while credit moratorium facilities totalled over Rs589.4 billion. We also created our own moratorium scheme of Rs3.6 billion which covered over 3,400 businesses. Despite serving the nation during the unfolding crisis, we are also mindful of maintaining stability which helped us achieve the highest reported banking industry profit (before tax) of Rs23.6 billion in 2020.

My vision for the bank is to see it grow in strength as a key financier to the government, businesses ranging from start-ups to well-established corporates, rural communities, and individuals from every walk of life. We will ensure that we maintain the integrity of the banking sector and take the lead in reviving the economy through SME and local entrepreneurship development. In 2020, amidst the Covid-19 pandemic, the bank disbursed loans worth almost Rs130 billion among SMEs and micro-businesses.

We will also give our unstinted support towards developing the infrastructure of this country and building the economy of the future by focusing on a broad range of sectors from petroleum to housing and urban development, agriculture, construction, tourism, apparel, transport, education, health, hospitals, pharmaceuticals, aquaculture and fishing, real estate, exports, local manufacturing and information technology and many more.

How has BOC responded to the Covid19 pandemic and unfolding economic predicament?

We deployed a special credit recovery unit to approach collections more constructively: what I mean by this is that we departed from the usual practices around lending and recovery that are governed by stringent regulations and rules.

The economic fallout from the Covid-19 pandemic, and the Easter bombings in 2019, is unprecedented in both scale and level of uncertainty. Many businesses faced closure as they fought for survival, barely able to meet their obligations to employees and suppliers. I already mentioned the credit moratoriums and concessionary loan schemes we deployed as a lifeline to struggling businesses as a means to revive the economy – Bank of Ceylon not only made the highest disbursement under the Central Bank’s Saubhagya Working Capital Loan scheme but we deployed our own funds to a moratorium scheme. However, we took an unconventional leap of faith to add real value to our clients in their hour of need.

So, what we did was we set up a separate credit recoveries unit that focused on helping businesses restructure their loans and business models. We intend to help these businesses remain operational, generate employment and survive the ongoing economic crisis unscathed and emerge much stronger on the other side. This was a progressive and yet prudent move, I believe, because the banking industry can only grow and thrive by creating the conditions for people and businesses to grow and thrive.

As the banking leader in the country, it was necessary to demonstrate to our clients that we could always be there for them. This unit has restructured loans worth Rs30 billion in just three months since commencing operation in January 2021. Companies applying for business revival assistance need to submit a viable business plan that we can develop together.

What are the factors shaping the economy of Sri Lanka, and how is BOC influencing that future?

I see three main areas of influence for the Bank of Ceylon. The first is in driving infrastructure development and facilitating government economic policy. The second is enabling businesses, from startups to large established ones, to grow beyond our shores. The third is enabling a digital transformation for a more efficient economy and greater financial inclusion.

During the pandemic, the Bank of Ceylon played a critical role in supporting the government’s development activities. In addition to continued lending to the government, state-owned enterprises, and large-scale infrastructure projects, we also ensured that state sector employees got their salaries and subsidy schemes targeted at key economic sectors received adequate funding.

Our lending to large scale infrastructure projects topped Rs157.9 billion in 2020. These projects – from the Colombo Port City to various others including housing, education, food, roads, and energy – aim to develop a bedrock of quality, reliable, sustainable, and resilient infrastructure, including regional and transborder facilities. They have the potential to transform this country, support economic development and human wellbeing, with a focus on affordable and equitable access for every Sri Lankan.

In 2020, we also funded several private sector investments in manufacturing, construction, pharmaceuticals, sustainable energy, and export industries, including South Asia’s largest tyre manufacturing facility, the Altair Residential Project, Colombo City Centre Partners, and the Kelani River right bank water project.

Our focus on developing a robust private sector that can propel Sri Lanka towards economic prosperity is sharper now more than ever. We possess the largest network of corresponding banks, and our trade finance services ensured continuous and undisrupted payment and settlement during the Covid-19 pandemic. Our trade finance team plays a facilitating role in providing cost-effective LC confirmations for customers, partnering foreign banks for discounting LC bills at attractive rates, and providing advisory services for trade customers.

We established the Export Circle at the bank to provide a one-stop-shop solution for export-oriented businesses with all their financial and non-financial needs. Apart from the Covid-19 related schemes, we deployed solutions to several key sectors, including a smart-supermarket loan scheme for retail traders, a supply chain re-energised loan scheme for tea factory owners, a smallholder tea and rubber revitalisation scheme, and a liquidity facility for the construction sector.

At BOC, we have taken a keen interest in financial inclusiveness and uplifting the lives of all Sri Lankans, and thereby tilting the economic trajectory of this country upwards.

Digital technology is a means to achieving that, and as such we have invested over Rs5.9 billion over the last three years to develop the bank’s digital infrastructure.

Given our unparalleled customer reach, we are cognizant of the role we can play in driving digital literacy across customer segments and sought increased digital adoption during 2020 amidst the pandemic. Key milestones that year included the launch of Sri Lanka’s first dynamic QR for bill payments, value additions to Smart Pass Book and SmartPay and the launch of self-registration for online banking. It is noteworthy that our ATM, CDM, CRM network performed exceptionally well during the year, enabling customers to avail themselves of essential banking.

Through the decades, we have served our customers via multiple channels and a diverse range of products and services. We have a network of over 646 branches and nearly 1,400 ATM/CDM/CRM units. Apart from constantly improving customer reach, our teams across BOC work tirelessly to provide the best service possible even during tough times like the Covid-19 pandemic where we took measures to safeguard customers and our staff. This approach enabled the majority of customers to connect with the brand and seamlessly carry out their banking needs safely and securely.

Leaders need to keep an eye on the future while managing everyday challenges. How do you balance these competing demands as a CEO?

The key to balancing these is to have a balanced team of executives to assist you whilst having a comprehensive plan to back you up. Everyday issues tend to take your mind off the future or long term issues. First, I think you need to have a comprehensive corporate plan.

Keeping an eye on the future means you need to stop, take your mind off the everyday stuff, and then quietly and comprehensively look at the future. We do this during the annual planning process, which is very comprehensive. Each division headed by key management personnel are required to come up with their views and the views they come up with are discussed at length. The finale is a meeting where views and plans for the future are finalized and formally documented as the Corporate Plan.

You might want to know why we do it this way. The future encompasses many aspects and if we do not go at it methodically and thoroughly there is a good chance that we may lose sight of some critical aspect. Once we follow this process we have the confidence that we have taken account of all aspects critical to our future. Once these plans are in place we know we have something that takes care of the future. This frees our minds to concentrate on the everyday challenges knowing that we have a plan that keeps us on the right track. The performance reviews which take place periodically helps us to see if we are on track. A CEO also needs to have a good team backing him up. We have a very good team at Bank of Ceylon who brings a lot of knowledge and experience.

What was the one leadership lesson you had to learn the hard way?

We learn many concepts in banking and in business dealings in general. We have heard of them either through business studies or through reading or because they are in common use. We get to use them without much deep thought but there are moments where you gain a deeper insight into what they really mean and what they are all about.

In banking, we have this approach called relationship banking. This is different from doing business from transaction to transaction. In relationship banking, we focus on mutual long term benefits for both our customers and the bank. Over time, we get to know their way of doing business, the quality of management, and above all, the integrity and dependability of those who lead those businesses. The bank is there even when they go through difficult times.

Let me tell you about one experience I had. One of our corporate clients was facing liquidity problems and approached the bank for more funds. Usually, when a borrower is unable to service a loan, banks tend to be extra cautious and prudent. So when the struggling corporation asked for support, many in the bank felt the request should be turned down. However, I knew the integrity of the leadership and their business acumen was unblemished, and that the business was riding a bad patch with the potential to come out stronger if they got the support they needed. I persuaded our team to grant the requested credit facility. The business in question had a difficult recovery but eventually pulled through and my decision to support it was vindicated. I had demonstrated what it means to be a relationship banker and the need to take hard decisions, to trust one’s judgment and to convince the team of what you believed in. This experience left the team with a deeper understanding of an aspect of leadership in banking and also of relationships in business.

Who has had the biggest influence on your career?

Many have influenced me at various times in my life. With regard to my career, I can say with certainty that it was a former General Manager of Bank of Ceylon Mr B.A.C. Fernando.

I joined the Bank of Ceylon as a Cashier/ Clerk. I was more than happy to have a stable job in an organization that could provide the basis for a successful career. After we had settled down and we got to know the organisation a bit better, we began to harbour hopes of rising up the ranks. I came from a rural background and I didn’t really think that I could do that.

All that changed when I came to know Mr Fernando, who was attached to the Bank of Ceylon Training Centre at the time. He too had joined the bank as a cashier/clerk and had risen up the ranks through disciplined hard work. I soon came to know that many people with career aspirations regarded him as a role model. Mr Fernando had diligently pursued his studies, acquiring a university degree and professional qualifications in banking. He had great foresight. Mr Fernando was one of the first people to realise the importance of postgraduate studies in management and was among the first people in the bank to acquire an MBA. At that time, the MBA was a new and relatively little known qualification. Now it is among the most popular, at least in the banking field. He demonstrated how this newly gained insight could be translated into performance.

In our visits to the Training Centre, Mr Fernando imbued us with self-belief and courage that we who had come from humble backgrounds too could dream of reaching great heights. He himself was the role model and example. Not only did he encourage us, he also showed us the way. He demonstrated the need for disciplined hard work and the need to acquire qualifications, job skills, experience and exposure. He told us how he always devoted a little time to developing himself no matter how busy he was. He advised us on how to present ourselves.

It was the example he set that gave me the courage to dream of reaching the pinnacle of my career. I believe that without Mr Fernando, I would have been happy with a lot less and would not have aspired to come this far. He was without doubt the biggest influence in my career.