NEW PRESIDENT OPINES…
I am extremely grateful to the membership as well as the Nomination Committee for electing me as the 24th President of the Association of Professional Bankers –Sri Lanka, the premier professional body for career bankers and I am most honoured to hold the mantle of this highly esteemed and prestigious Association.
APB plays a vital role in facilitating bankers to acquire the required knowledge and skills with the objective of improving the banking system of the country and as the President of the Association, I am confronted with a number of challenges in keeping up the bankers with the trends and latest developments in the industry, which is undergoing a phase of turbulence and transformation.
Banking sector has recorded substantial growth as a result of improvements in stability of financial institutions, enhanced confidence in the financial system and strengthened regulations. Today, we are talking about a Rs. 4.2 Trillion banking industry which was only Rs. 1 Trillion 10 years ago. The assets of the industry have increased four-fold in the past decade and the Central Bank of Sri Lanka predicts in Road Map 2012 that the financial services will expand by 8.2% in 2012 due to the expanding economic activities.
According to Central Bank predictions for 2016, the banking system will continue to show a healthy growth despite the increased pressure on Net Interest Margin (NIM). It is predicted that the assets of the banking sector will double to Rs. 8 Trillion from the current level and lending to Rs. 5 Trillion from the current level of around Rs 2.5 Trillion as well as significant improvements to access to finance by 2016. However, NIM will remain a concern as it is predicted that NIM will further decline to around 3.3% in 2016 from the current level of 4.2%.
The biggest challenge faced by the industry is the declining NIM due to intensifying competition. This situation should be arrested by exploring alternative, innovative banking solutions such as, fee-based banking, merchant/investment banking, leasing and venture capital, rather than relying only on fund-based conventional banking products. On the other hand, banks can also expand the range of products, services and delivery channels to cater to the emerging needs of the economy and improve profitability by concentrating on cost efficiency and resource utilization.
Other key challenges facing the Sri Lankan banking sector include managing asset quality and accessing capital in the face of rapid expansion, enhancing risk management capabilities, implementing changes in accounting standards in line with IFRS and managing the impact of global market instability.
As banking landscape changes, we should be poised to accept and adopt change. Knowledgeable, competent and updated human resources are mandatory for the development of the industry amidst turbulent environs. Keeping this in mind, we have identified a number of initiatives to be implemented in the coming year.
Incorporation is on top of APB priority list. APB has come a long way since 1988 and it is high time the Association was incorporated by an act of parliament and we expect to realize that in 2013, the year in which the Association celebrates the 25th anniversary. Yet another priority we have identified is, while allowing Council Members to preside over committee meetings, we must encourage experienced as well as young people from the industry to take part in the APB work through committees so that eventually they will be able to join the Council and contribute more.
APB is aware of the latest developments taking place in the industry such as IFRS implementation, increased emphasis on risk and compliance and the need of adoption of the latest technology. The growth and competitiveness of the industry will depend very much on how accurately we predict the challenges and proactively overcome them and our task, in this regard, would be to equip the bankers with the requisite knowledge, competence and skills.
We being a professional association, it is also essential for us to affiliate with other professional bodies as much as possible. While focusing on these priorities, we will continue with all the programmes conducted by APB such as lectures, seminars and various training programmes. In the past, the Association was able to hold few of these programmes in outstations and we hope to expand it further.
I and the new Council shall work tirelessly towards successfully implementing the above priorities and activities and fulfilling the objectives of the Association and we earnestly request the utmost support and cooperation of the membership to take the Association forward. As the Association is on the threshold of celebrating a quarter century of existence, we shall be determined to work towards realizing APB vision of being ‘the Power of Professionalism in Banking in Sri Lanka’.
H.M. HENNAYAKE BANDARA
President - The Association of Professional Bankers,