performance by division
Personal Banking
Personal Loans
The Bank placed greater emphasis on promoting personal loans to professionals, executives and other high-net-worth customers in 2011. The quick, hassle-free process of extending loans with a widely promoted ‘Top-up Facility’ proved very attractive to existing borrowers. In spite of increasing trend on interest rates towards the latter part of the year, the Bank’s personal loans portfolio rose to Rs. 20.037 Bn. by the end of 2011, reflecting 24,468 new disbursements amounting to Rs. 11.7 Bn. and this was a 17.3% increase over 2010.Future Outlook
The Bank’s aim in 2012 is to offer ‘Personal Loans from Commercial Bank’ the highest top-of-mind recall in the market. In this respect, the Bank will pursue in identifying potential borrowers from the existing database of the Bank as well to promote the product among professionals in 2012. Plans are afoot to centralise the loan origination and approval process in 2012.Domestic Factoring
The extension of domestic factoring - in which financing is backed by customers’ outstanding receivables - to the Bank’s branch customers was one of the most significant achievements in 2011 within the Personal Banking business. Total domestic factoring volumes hit an unprecedented Rs. 6.82 Bn. This represents an approximate 60% growth over 2010. Total factoring arrangements outstanding reached Rs. 819.5 Mn. by end December 2011, nearly 100% growth over 2010.Future Outlook
Once directed exclusively at customers with cash flow difficulties, factoring is now viewed as a standard means of offering competitively priced finance to unpaid invoices. According to statistics gathered by Factors Chain International in 2010, global factoring turnover amounted to EUR 1,648,229 Mn. The Bank expects factoring and other asset-backed financing techniques to continue gaining momentum in all emerging markets, including Sri Lanka. Plans are in place to identify potential customers in the branch network and to reduce the present minimum facility limit.Home Loans
The Bank’s housing loans portfolio is designed to meet diverse community needs as well as current socioeconomic realities: Thus, Bank will continue to focus its home financing initiatives on middle- and high-income households with special emphasis on low-income consumers.Lower interest rates helped the housing loans portfolio record significant growth from the latter part of 2010 through to the third quarter of 2011 contrary to the growth experienced by the Bank from 2007 to early part of 2010 - although rising rates began slowing the growth momentum towards the end of the year. Other factors that contributed to overall growth in 2011 include the opening of a Home Loans business unit, a hotline, improved operational efficiencies and new programmes such as foreign currency home loans for Sri Lankans working abroad and privilege home loans.
The Bank introduced ‘Fixed and Flexi’ rate based housing loans which assist the borrowers to manage cash flows in the event of adverse movements of interest rates in the market.
Home Loans
| As at December 31 | 2010 | 2011 |
| Outstanding (Rs. Bn.) | 15.84 | 20.47 |
| Growth (%) | 20.12 | 29.23 |
Future Outlook
Plans for the coming year include packaging home loans with an offset facility for high-net-worth individuals and offering current customers the option to switch (for a fee) from a floating rate to a fixed rate loan, or vice versa. The Bank will also work more closely with mortgage agents and high-end property developers to attract more home loans customers, and more online application forms will be introduced to help accelerate loan approvals.Payment Cards
Commercial Bank is the only institution in Sri Lanka with the ability to issue locally personalised chip-based debit and credit cards. All card products issued by the Bank’s state-of-the-art Card Centre are now chip-enabled. The island-wide branch network also represents a major advantage in marketing of cards.The Bank aggressively marketed its debit card programme, boosting the popularity of this convenient payment mechanism. The turnover volumes of debit cards grew an impressive 60% over 2010 totals, resulting in substantial interchange income. Efforts to improve payment card acceptance outside the Western Province were augmented with local seasonal promotions in the Eastern Province.
A buoyant economy and the drop in credit card interest rates to 24% greatly increased the demand for credit cards and the advances grew by 27% during the year 2011.
Future Outlook
The Bank will enhance transaction volumes by enabling debit cards for e-Commerce. Plans for the year ahead also include launching a credit card catering to the premier market segment. Plans are afoot to further expand credit card and acquiring market to consolidate its leadership in the debit card spend market.E-Banking
In 2011, the online banking customer base grew by 27% over the previous year, with total income growing by 23%. Many new services and features were introduced, such as instant fund transfers to registered third party beneficiaries, 24/7 via online banking new menu driven, trilingual mobile banking platform that enables clients to use their mobiles to obtain account balances, make credit card inquiries, obtain statements, pay utility bills and transfer funds and to settle postpaid phone bills or top up their prepaid mobile phones.Future Outlook
Future plans for e Banking include developing Decision Support and Management Information Systems, introducing a new iBanking solution with self-registration and multi level authorisation capabilities, launching a new mobile version of Internet banking, mobile to mobile fund transfers and eWallets and mWallets and linking ComBank Online with our Payment Gateway.Paymaster
ComBank Paymaster is an online total payment solution that allows large corporate clients to execute their day to-day-payments in cash, drafts or to bank accounts conveniently. This product performed well in 2011, growing its customer base by 15% over the previous year’s total and achieving 19% income growth. In December, Commercial Bank became the first Sri Lankan bank to support clients with online EPF payments of their employees. These payments can be effected via Paymaster service year round, irrespective of their locations, even when payment counters at EPF and ETF departments are closed.The following table summarises the performance of the e-Banking division for the year under review:
| Product | Growth in Customer Base% | Growth in Income% |
| ComBank Online | 27 | 23 |
| SMS/MBanking | 30 | 30 |
| ComBank Paymaster | 15 | 19 |