100 years in COMMERCIAL BANKING
Commercial Bank was established in 1920 as the UK based Eastern Bank in Chatham Street, during the British colonial period when trade, commerce and enterprises thrived. Eastern Bank had a number of institutional shareholders including the Sasoon family from Baghdad.
With the country’s independence in 1948, trade continued to flourish and the share capital of the Eastern Bank Ltd was acquired by the Chartered Bank in 1957. A decade later, in 1969, Commercial Bank of Ceylon was incorporated by converting the Eastern Bank branch in Colombo with the Chartered Bank which merged with Standard Bank and became Standard Chartered Bank holding 40% of its equity.
Towards the end of the decade business expanded with two associate companies, Commercial Insurance Services (Pvt.) Ltd and Commercial Leasing Ltd. Commercial Stock Brokers (Pvt. Ltd), another associate company was added in 1991, with the Bank owning 40% equity. The following year, Commercial Fund Management (Pvt.) Ltd. was formed to operate unit trusts with 50% equity participation from the Bank. In 1996, the Bank increased its shareholding in Commercial Development Company Ltd. (an independent entity, dealing in property development) to 94.55% by means of a share swap.
Commercial Bank became the first Sri Lankan bank to be ranked among the ‘Top 1,000 Banks in the World’ by the Banker Magazine – UK, consecutively starting from 2011.
Subsequently the Islamic Banking Unit and Elite Branch was set up for high net worth customers.
BMD spoke to Mr. S Renganathan, Managing Director/CEO of Commercial Bank on its success story.
Q: After 100 years in business what can be identified as the essence of Commercial Bank, the key to its success?
Since inception in 1969, Commercial Bank of Ceylon has taken the pioneering and bold initiative to look beyond the commercial capital of Colombo for its business opportunities. The bank opened its first outstation branches in Matale and Galewala in 1972. Branch expansion continued with another branch opened in Matara in 1973. In the same year, the bank took over three branches of the Mercantile Bank, in Kandy, Galle and Jaffna. With six branches in the outstations and the head office in Chatham Street Colombo 1, in 1975, the bank decided to open two more branches in Colombo- in Kotahena and Wellawatte.
The Bank’s aggressive branch expansions led to a 100 branches by 2001, which doubled to 200 branches by 2011. Currently the bank has 268 branches in its network.
With a strong retail base and expertise in trade finance acquired through acquisition and its strong presence in the capital city, the Bank’s decision to expand network was to reach out and engage in another level of relationship to discover the potential of the Small and Medium Enterprise (SME) sector.
This move eventually led to Commercial Bank being strong in the banking domains of Corporate, Trade Finance and SMEs. Building personal/ retail relationships has been one of the Bank’s key strengths.
Taking a cue from this, the Bank’s interpersonal relationship also grew strong and over time the Bank built a unique team culture leading to its current identity and concept of ONEBANK, ONE FAMILY.
For our service approach to delight all customers with a keen and committed passion, all staff are trained in intensive customer care training programs conducted both locally and at international centres.
Q: What were some of the most noteworthy milestones for Commercial Bank in its 100 years of operation?
We have a whole history of firsts, but I think overall a most noteworthy fact is that we were pioneers in introducing new products and services to banking and we continue to take a lead in this area. For example, we introduced the uni-banking system to the industry in 1993 and products like “Isuru” a long term children’s savings scheme and holiday banking where the bank is open 365 days of the year (some identified branches) . In another “first” the Bank’ opened the very first supermarket banking unit in the country at ‘Mini- Com’ at Cargills Food City in Staple Street in 1999 and thereafter moved to Keells Supermarkets and other leading supermarkets like Laugfs, Arpico, etc.
Among other firsts was the ABC Banking (Automated Banking Center) or the fully automated banking centres in 2011.The Bank realized the urgent need for automated banking with the experience in their Ward Place branch. The branch catered to many professionals including doctors who could not take time off from their work to attend to their banking work during the day time enabling them to carry out their banking transactions at ABC, 24×7.
Another unique feature is that we are the only private bank with an overseas network. In 2003 The Bank’s took over operations of Credit Agricole Indoseuz,Bangladesh. In 2016 we opened a Tier 1 Bank in Maldives with a business partner. In 2015 we opened operations in Myanmar by opening a representative office and in 2018 we commenced a specialized Micro Finance operation in Myanmar, under the name CBC Micro Finance Ltd.
Q: What has been the Bank’s contribution to sustainability through digitalization the biggest revolution of this century?
Commercial Bank’s state-of-the-art core banking systems and ATM systems are from leading software vendors, Fiserv and Euronet respectively. The Bank has a large ATM/CRM network in Sri Lanka with ATM machines, cash deposit machines and cash recycler machines installed across the country which also facilitate services such as utility bill payments, fund transfers between accounts and many other functions in addition to cash withdrawals. The Bank uses CS Eximbills, a system that contributed towards winning the ‘Best Sri Lankan Bank for Trade Finance’ Award.
The online banking system launched in 2000 was upgraded in 2012 to encompass the latest in user-friendliness, functionality and security. The introduction of mobile banking and cash & cheque deposit KOISKS have not only acted as ‘queue busters’ but has also been a part of the bank’s growing technological footprint in the country.
Being the only Sri Lankan bank with the prestigious ISO/IEC 27001:2005 certification for information security, it demonstrates the Bank’s commitment to protect customer privacy.
Commercial Bank has been working with the International Finance Corporation (IFC) to identify and support green finance initiatives, both externally and internally. We are pioneers and leaders in paperless banking, introducing many such initiatives internally as well as externally
The paperless transition is manifold and comes in many different stages. From cash deposit machines (CDM) our bank progressed to cash recycler Machines (CRM).
We are always conscious of our customer requirements and have divided our organization’s customer structure into three: Retail, Corporate and SME to have a comprehensive understanding of our customer needs and concerns. We have shifted our customer transactions also to an online platform for faster delivery and offer our retail banking customers the option of banking online to avoid coming to bank branches for transactions. The latest digital product introduced by the Bank is “Flash”. It goes beyond a typical mobile wallet to facilitate your financial well being with several unique features.
In expanding our SME operation, our officers visit potential customers in their home or business premises and understand their business and talk to them about finance opportunities changing the traditional practice and structure, of SME customers queuing up in banks to obtain loans for their businesses. Our relationship management has been extended to SME customers as well , where data is provided to the branch managers about our existing customers and their financial position and the concept is to go to our customers’ doorstep instead of them coming to the bank.
Sustainability
At Commercial Bank the standard focus on People, Planet and Profit has progressed beyond, with our vision of sustainability in all three of these focus areas both internally and externally. We have appointed dedicated officers to manage internal as well as external processes and ensure our best commitment to sustainability and the environment.
Q: What are the bank’s chief CSR initiatives?
The Corporate Social Responsibility Trust of the Commercial Bank of Ceylon PLC is an initiative aimed at uplifting the lives of communities across the country. The Bank has contributed up to 1% of its annual profit to the Trust established in 2004, with Education as its prime objective. Health and the welfare of our war heroes and safeguarding our cultural heritage share equal space in the bank’s CSR agenda. The Bank has concentrated on investing in IT Labs in schools and other important institutes. The Bank mainly focused on awarding scholarships to undergraduates, donating equipment to hospitals and facilitating the welfare of war heroes and other community projects. Another initiative the Bank is actively driving is to provide vocational training to schoolchildren to enhance their employability. The Bank has joined hands with both government and private sector organizations to ensure that children who do not gain access to local universities have gainful employment.
The Bank has commenced a nationwide programme to establish 100 STEM schools in 2020 to commemorate its 100th year celebrations. STEM stands for Science, Technology, Engineering and Mathematics, subjects which are crucial for the future generation to ensure good employability, however the Bank has identified that most schools need an extra support to teach these subjects in a manner that engage and interest students. These STEM labs will assist teachers with online and offline content developed for the Bank by a competent panel of professors. It will allow teachers to use videos, presentations and charts that goes beyond a traditional classroom lesson
Q: What is the Bank’s direction for the future?
We are highly focused now on giving our customers what they need at the time they need it, or in other words at the correct time. Commercial Bank today is among the strongest private banks in the country, setting benchmarks for the banking industry. Our strong capital base and our liquidity ratios are above the Central Bank of Sri Lanka’s (CBSL) statutory requirement.
Trust and integrity have been key components when meeting the expectations of every stakeholder. As a result, Commercial Bank has molded an exceptionally talented team of employees and lent them a hand to reach their fullest potential. We will continue to understand the needs of customers and provide customized and innovative products and services with special focus on their convenience and become a true partner in their financial journey. bmd