Q: How has innovation enabled the banking sector to achieve investment goals recently?
A: Innovation has transformed the banking sector through developments such as banking from home, contactless payments, the ability to connect corporates’ ERP systems to banking systems and the use of robotic process automation (RPA) in internal processes.

These measures have led to banks securing stronger and longer relationships with customers, while deploying their funds in more quality and diversified loan books that are resilient to shocks.

Innovation has also reshaped investments for banks with a greater skew towards digital and technological upgrades, and in upskilling teams.

Q: What factors facilitated National Development Bank’s (NDB) performance amid the pandemic?
A: We recorded considerable balance sheet and profitability growth in financial year 2020/21, and have continued the momentum this year, thereby securing sustained returns for investors.

Our focus on the safety and wellbeing of staff has enabled us to offer great client service during these challenging times to ensure they stay afloat.

We worked with industry players and other financial ecosystem stakeholders to reorient the sector to meet ongoing challenges, and ensure that it remains robust to drive an economic revival.

The bank’s digital drive in both customer solutions and internal process automations is also progressing at a rapid pace.

Support for SMEs, innovators and exporters through Jayagamu Sri Lanka, women empowerment initiatives such as Sri Lanka Vanithabhimana, and numerous corporate sustainability initiatives – viz. the Let’s Grow reforestation project and NDB Cares in response to the pandemic – are some of our other notable schemes.

A clear strategic focus, and the team’s dedication and passion – together with agility in responding to evolving dynamics – have enabled NDB to stay on course.

Q: How can domestic and foreign investors be enticed to invest in Sri Lanka?
A: Policy stability and expediting the implementation of policy measures aimed at improving Sri Lanka’s ease of doing business are key.

This encapsulates all aspects of a business from the ease of setting up to trading across borders – and it should be a national priority if we are to attract investments away from countries such as Thailand and Vietnam.

Thailand and Vietnam rank 20th and 70th respectively in the ‘ease of doing business’ index compared to No. 99 for Sri Lanka. Last year, Vietnam’s foreign direct investments (FDIs) contracted by two percent versus 43 percent for Sri Lanka, according to a UN report.

The Port City (a.k.a. Colombo International Financial City or CIFC) development, technology and digitalisation in all sectors are also imperative to remain competitive in a global market.

NDB completed a rights issue and private placement that netted Rs. 9.5 billion, and on-boarded Norway-based Norfund for its first equity investment in the country. This is an impactful investment at a critical juncture as the company also offers expertise and best practices in technology, governance and so on.

We also secured a credit line of US$ 75 million from the US International Development Finance Corporation (DFC).

All this reflects Sri Lanka’s strength and potential in raising quality equity and debt capital.

Q: And how important is sustainability in capital markets?
A: With topics such as climate change, social justice and equality taking centre stage across the globe, capital markets cannot function without being conscious of them.

Capital markets have a tremendous responsibility towards sustainability in their role as promoters of economic growth.

NDB’s experience as a corporate committed to environmental, social and corporate governance (ESG) is that collaborations between sustainability conscious investors and investees lead to meaningful economic development and social empowerment.

Q: What is your take of the diversity of investors in Sri Lanka?
A: I believe the capital markets are dominated by institutional investors, reducing the depth of the market and resulting in the frequent volatility we have witnessed. This crowds out smaller retail investors, which is detrimental to capital market development.

There is a role to be played by state owned pension funds, private provident funds, insurance, mutual funds, family offices and so on in Sri Lanka to increase the float in the market – especially on debt instruments.

In terms of size, Sri Lanka can do better. Our market capitalisation as a share of GDP stands at around 18 percent whereas in India, it is about 75 percent, 57 percent in Vietnam and 104 percent in Thailand.

The direction to move from presently individual-based investment would be towards larger pools of investments with risk diversification such as those offered by NDB Wealth Management, which is one way of encouraging the retail sector to participate in capital markets.

We also appreciate the level of professionalism, technical expertise, and active interaction of investors and other stakeholders in Sri Lanka’s capital markets.

Q: And how would you describe the competition?
A: Competition is a defining factor in the banking sector with a large number of institutions offering homogeneous products.

Therefore, being customer centric, pursuing extensive diversification of customer segments and catering to them with precise solutions, enabled by continuous product innovation, are essentials.

Customer service excellence fortifies customer satisfaction. Innovative digitalised solutions creating an enhanced customer experience have also kept the bank in good stead.

Dimantha Seneviratne
Director
Group Chief Executive Officer
Telephone 2448448  |  Email contact@ndbbank.com  |  Website www.ndbbank.com