Deriving Value

Internal Capital Formation

The value created by CDB for itself through activities, relationships and linkages lead to the formation of capital that is internal to CDB. While what is most visible and quantifiable is financial capital, internal capital also includes several intangibles that, as discussed previously, constitute institutional capital.

Financial Capital

The review period observes the business recording a strong growth in most of its key performance indicators with significant improvements in core profitability. CDB prepared and presented the Financial Statements in accordance with Sri Lanka Financial Reporting Standards (SLFRS) with a focus on maintaining financial ethics, principles, accountability and transparency.

Analysis of Results

Industry Comparison

CDB has remarkably improved its financial position with high-end indicators marking a stronghold across the industry.

Key Financial Indicator	CDB	CDB	Industry
	2013/14	2012/13	as at 31.03.2013
	%	%	%
Return on Equity (ROE)	17.16	18.57	8.2
Return on Assets (ROA)	2.51	3.04	2.1
Net Interest Margin	8.05	8.28	6.6
Gross NPL Ratio	5.19	2.32	6.7
Net NPL Ratio	2.73	1.27	2.5
Tier I Capital Ratio (Minimum 5%)	12.61	14.32	13
Tier I & II Capital Ratio (Minimum 10%)	16.00	14.32	15
Capital Funds to Total Deposits	17.36	15.65	23

Profitability Position

For the financial year ended 2013/14, the profitability indicators showed significant improvement satisfying and posting a net profit before tax of Rs. 730 Mn compared to Rs. 624 Mn recorded in the preceding year by reflecting a year on year growth of 17%. At the same time the business concluded 2013/14 financial period with a satisfactory profit after tax amounting to Rs. 561 Mn compared to Rs. 489 Mn in the last financial year with an incline of 15%. As we pursed growth in turnover mainly targeting our primary lines of business, we kept focus on keeping overall average cost of funding at optimal levels and tackled overhead cost escalation through concise means of cost management to finally reach current levels of profitability.

	For the Year Ended		YoY Growth
Profit	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn	%
Before Tax	730	624	106	17
After Tax	561	489	72	15

	Financial Year 2013/14 - Quarterly Profits
Profit	1Q Rs. Mn	2Q Rs. Mn	3Q Rs. Mn	4Q Rs. Mn
Before Tax	169	185	186	190
After Tax	135	135	158	133

Revenue Growth

Intense rivalry made the sector faced with numerous challenges in growing up their revenue lines where we succeeded in reaching a top growth line of Rs. 6,125 Mn during the year which is 42% compared to last financial year revenue of Rs. 4,311 Mn. Management was able to maintain a strong momentum in total revenue growth by keeping to a pace envisaged in the strategic plan. In boosting revenue, core contributor of interest income contributed 96% while fee and commission income and other operating income components contributed 3% and 1% respectively.

	For the Year Ended		YoY Growth
Composition	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn	%
Interest Income	5,896	4,087	1,809	44
Fee and Commission Income	159	119	40	34
Other Operating Income	70	104	(35)	(33)
Revenue	6,125	4,311	1,814	42

Interest Income and Interest Expenses

Interest Income

With the loan portfolio sustaining a resilient growth in the face of subdued market conditions and intense competition interest income yield inclined 44% to Rs. 5,896 Mn. Acquisition of new clientele, increase in volume of business with existing customer base and expansion of products and services complemented business generated through personal financial services provided the impetus for such growth in loan book. CDB’s interest income composite by Government Securities and placements with banks which is Rs. 355 Mn during the financial year and Rs. 5,541 Mn through the loans and advances to customers as financial leases, hire purchases and loans. Interest income from finance leasing business recorded at Rs. 3,413 Mn, 39% increase which represents the higher portion while Hire purchase and Loans and advances recorded Rs. 1,055 Mn and Rs. 1,073 Mn, an increase of 52% respectively during the period under review. The growth in loan book aided by the increased levels of new lending business volumes generated in the period under review contributed towards higher interest income.

Interest Expenses

Interest expense was Rs. 3,553 Mn, compared to preceding year figure of Rs. 2,387 Mn. The main contributor for interest expenses is deposits which recorded 84%, while debentures had 2% and corporate and other borrowings had 14%. Interest rates showed a downward trend especially during the last two quarters as policy rates were being revised to encourage the private sector credit growth.

Deposit interest cost remained the main component of interest expense totalling to Rs. 3,001 Mn for the year, up by 42% from the preceding year. Similarly, corporate and other borrowing costs of the business too showed an increase surging by 98% to Rs. 552 Mn compared to last year figure of Rs. 279 Mn.

Other Income

In line with ongoing market and product diversification endeavours, the fee-based operation income posted a marginal growth rate of 2%. This outcome was to a large extent because of losses incurred from pawning activities.

Net Interest Margin

Net Interest Margins (NIMs) of NBFIs depleted due to the declining nature showed with regard to policy rates. Rates had to be adjusted thus influencing NIMs of financial institutions. However CDB has adopted measures to mitigate any significant margin erosion that may occur by ensuring pricing is based on a proper trade-off between risks and returns on assets side, and looking for longer-term funding to mitigate the negative assets and liabilities maturity mismatch. This has resulted in lowering the one year cumulative maturity gap to 13% from the previous year’s 16%. CDB’s NIM decreased marginally from 8.28% in 2012/13 to 8.05% in 2013/14 especially due to the downward trend of interest rates. Even though a volatility seen in interest rates throughout the year, through implementing timely pricing strategies, CDB managed the NIM for year 2013/14.

Operating Income

The total operating income inclined by 34% from Rs. 1,925 Mn to Rs. 2,571 Mn during the financial year. Fee and commission income increased by 33% from Rs. 119 Mn to Rs. 159 Mn. Net operating income recorded Rs. 2,233 Mn after the impairment adjustment and exhibits a 24% rise.

Operating Expenses

Operating costs showed an escalation, rising by 28% from Rs. 1,172 Mn in 2012/13 to Rs. 1,502 Mn this year mainly because of increased network and access expansion together with increases in staff costs did contribute to the incline in operating expenditure. Premises equipment and establishment expenses accounts for 43%. This is mainly due to our aggressive expansion drive which saw our multi-channel distribution network augmented with 15 new outlets, 2 relocated branches, enhanced customer services and uniformity of branding tenets in branches.

Cost to Income Ratio

CDB’s cost to income ratio stands at 58.43%, an improvement from previous year’s 60.89%. This is mainly due to the increase in operating income by a higher pace than the increase in operating costs. CDB Management’s strong emphasis in controlling cost especially keeping tab of key expenses by introducing numerous control measures and initiating action to eliminate non-value adding activities has laid down strategies towards managing costs and committed to on driving the cost to income ratio below 50% in the medium term.

Loan Book

Non-Performing Advances and Impairment Charges on Loans and Advances

The Gross NPL ratio stood at 5.19%, compared to 2.32% in the previous year. The increase in the NPL indicates an increase in the non-performing portfolio from Rs. 431 Mn in 2012/13 to Rs. 1,349 Mn in 2013/14. The effect of declining gold prices also reflected negatively in increasing non-performing loans of the pawning portfolio as well. It indicated a portfolio of 645 with compared to 1,065 Mn in previous year. The Net NPL ratio is recorded at 2.73% for the financial year under review, which in the previous year stood at 1.27%. However, CDB’s recovery staff is in the process of monitoring such non-performing advances and react in reducing the ratio further. Nevertheless, it is indeed noteworthy that CDB’s NPL this year remains well below the industry average of 6.7%, which is indicative of CDB’s astute management and well defined policies.

	For the Year Ended
	2013/14	2012/13
Interest Income Composition	%	%
Gross NPL	5.19	2.32
Net NPL	2.73	1.37

The impairment charges showed a significant increase compared to last year as it increased by 163% to reach a figure of Rs. 339 Mn. Impairment charges against pawning was Rs. 51 Mn and Rs. 168 Mn was set off against other operating income as a result of fall in value of pawned articles. As a whole, industry experienced an increase in non-performing loans due to decline of gold prices as well as deteriorated economic conditions of the country.

CDB adopted timely measures to minimise the impact from NPLs through better portfolio management where Company divided its loan portfolio into several segments, based on the standardised risk characteristics attached to different products. Also, the recoveries were closely monitored and strategies were adopted to sell off yard vehicle stocks with least loss to the Company.

The introduction of Vehicle Sales Units (VSUs) has ensured the repossessed vehicles are being sold at competitive market prices. Further the registered three wheelers are being identified as a main cause in rising NPL’s, which resulted in discontinuing of the new facility granted for the segment.

Assets Composition

The total assets recorded a significant growth of 38% reaching the mark of Rs. 33,769 Mn. The non-interest-bearing assets increased from last year’s Rs. 2,377 Mn to Rs. 3,275 Mn which shows a rise of 38%. Interest-bearing assets increased from Rs. 22,077 Mn to Rs. 30,494 Mn which also exhibits an increment of 38% compared to the preceding year. The composition of the asset base reflected a 90% investment in interest-bearing assets and 10% on non-interest-bearing assets in the period under review.

	For the Year Ended		YoY Growth
Assets Composition	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn	%
Interest-bearing assets	30,494	22,077	8,417	38
Non-interest- bearing assets	3,275	2,377	898	38
Total Assets	33,769	24,454	9,315	38

Capital Adequacy Ratio

CDB’s CAR decreased at Tier I compared to last financial year but remained well above the minimum ratio prescribed by the Central Bank of Sri Lanka. Retention of profits contributed to such improvement. Tier I & II capital showed an increase of 1.68% from previous year’s figure due to the debentures which were issued during the financial year under review.

	For the Year Ended
CAR	2013/14	2012/13
	%	%
Tier I (Minimum 5%)	12.61	14.32
Tier I & II (Minimum 10%)	16.00	14.32

Dividends

CDB’s dividend policy focuses on maximising the shareholders’ wealth, market capitalisation, wider reach and maintaining consistent stream of dividends.

	For the Year Ended
Dividend	2013/14	2012/13
Final (Rs.)	3.00*	2.75

* Proposed

Equity Position

	For the Year Ended		YoY Growth
	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn	%
Shareholders’ Funds	3,577	2,965	612	21

The total shareholders’ funds rose by 21% to Rs. 3,577 Mn by the end of financial year under review from Rs. 2,965 Mn recorded in preceding year. Our strong capitalistic skills and earnings capacity over the years have enabled us to possess a superior capital structure to-date. As practiced right throughout, our policy had been to retain a large component of our internally-generated profits within the business offering enough flexibility to pursue growth related strategies in future. By the effective utilisation of capital, we have been able to help the shareholders reap returns on investment.

Liquidity Position

CDB’s statutory liquid assets position is frequently monitored. The business maintained its statutory liquid assets ratio and minimum approved securities requirement above the minimum requirements specified by the regulator for the financial year 2013/14.

		For the Year Ended
	CBSL Minimum Requirement	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn
Total Liquid Assets	2,571	4,545	2,519
Minimum Approved Securities	1,184	1,887	1,218

CDB had sufficient funding lines to manage daily cash out flow requirements including amounts necessary in maintaining required statutory liquid assets levels.

Cash Flow Position

The cash and cash equivalent balance of the business was favourable at Rs. 199 Mn as at 31st March 2014 compared to the balance of Rs. 61 Mn as at 31st March 2013, representing an improvement of 227%. Operating and investing activities resulted in a net cash outflow of Rs. 167 Mn and Rs. 458 Mn respectively, mainly due to acquisition of Property and increase in business volumes. Financing activities resulted in a net cash inflow of Rs. 764 Mn during the year under review.

Total Deposits and Borrowings

	For the Year Ended		YoY Growth
Total Deposits and Borrowings	2013/14	2012/13
	Rs. Mn	Rs. Mn	Rs. Mn	%
Fixed Deposits	23,729	17,443	6,286	36
Savings	789	328	461	141
Borrowings	4,314	2,763	1,551	56

When it comes to CDB, major source of funding is from deposits. It represents 82% out of total deposit and borrowings portfolio. There was a declining trend seen in interest rates in nearly the whole of the financial year, thus intense competition especially in deposits, as banks and financial institutions collectively embarked on a price war. A rule was imposed by the CBSL to stop value added schemes offered by banks and LFCs in attracting deposits from the public thus resulting in banks and finance companies to rely only on the rate offered. CDB continued to maintain a competitive milieu and prudently managed the deposit base which showcased a growth of 38% from Rs. 17,771 Mn in 2012/13 to Rs. 24,518 Mn in 2013/14.

The Company’s borrowing portfolio showed a sharp increase from Rs. 2,763 Mn in 2012/13 to Rs. 4,314 Mn in 2013/14, an increase of 56% which was mainly contributed by the debenture raised and the first foreign funding generated from BIO.

The savings portfolio increased from Rs. 328 Mn in 2012/13 Rs. 789 Mn in 2013/14 which showcases a percentage increase of 141%. This positive paradigm surely displays that CDB is infusing the apt strategies to grow the savings portfolio and this focus, which will continue, remains well-aligned to CDB’s strategic objectives for long-term sustained growth.

Financial Efficiency of CDB

Net Assets Per Share (NAPS)

The net assets position of the business continued to move upward raising the net assets per share to Rs. 65.87 per share in comparison to Rs. 54.60 per share recorded previous year, reflective of CDB’s increased net worth position on account of sound profitability this period.

Earnings Per Share (EPS)

The basic EPS of the business rose as a result of the improved profitability recorded for the year, up by Rs. 1.32 in contrast to a contraction observed in last year of Rs. 1.27. Accordingly, CDB’s EPS stood at Rs. 10.33 per share in comparison to Rs. 9.01 per share reported in the preceding financial year.

Return On Equity (ROE)

ROE recorded upon the conclusion of the 2013/14 financial year was 17.16% as against 18.57% registered in 2012/13, a reflection of management’s commitment in ensuring satisfactory returns to CDB’s investors yet again.

 

Funding

Overview

Funding remains highly influenced by the regulatory environment. CDB strives to maintain an optimum mix of sources from which it can draw funds for lending. There is an unwavering focus on pricing, maturity and product differentiation. Currently, our funding is drawn mainly from public deposits and corporate borrowings. Funding targets are detailed in the annual budget.

Highlights

Achievement Against Budget

Key Highlights	Actual Rs. Mn	Budgeted Rs. Mn	Achievement Against Budget (%)
Deposits (net)	6,286	6,900	91
Savings	461	600	77
Borrowings (net)	1,551	2,141	72

Industry Growth

Deposits - Industry (Rs. Bn)		Change (%) - Industry
31.12.2012 (a)	31.12.2013 (b)	31.12.2012	31.12.2013
254.1	337.3	36.6	32.7

Source: Central Bank of Sri Lanka.
(a) Revised
(b) Provisional

CDB Growth

Deposits - CDB (Rs. Bn)		Change (%) - CDB
31.03.2013	31.03.2014	31.03.2013	31.03.2014
17.7	24.5	52	38

Progress against Strategic Objectives

Strategic Objectives	Our Performance	Update for 2014/15
To achieve a net deposit portfolio of Rs. 6.9 Bn and achieve a deposit portfolio of Rs. 25 Bn	Achieved a portfolio of Rs. 24.5 Bn and a net deposit figure of Rs. 6.3 Bn	To attract walk-in customers through enhancing our brand name
To achieve a net savings portfolio of Rs. 600 Mn	Achieved a net portfolio of Rs. 461 Mn	To further enhance savings portfolio and to provide more value adding gifts to our customers
To expand the product portfolio	Introduced several products under funding products	To offer new products with differentiation
To raise Rs. 2.1 Bn net through corporate borrowings	Raised Rs. 1.5 Bn net borrowings	Our focus will be to attract more corporate borrowings as the rates are in a down-ward trend
To increase customer volumes	Opened 15 branches and relocated 2 branches during the year	To open new branches in key strategic locations and to reach customers island-wide.

Discussion

Fixed Deposits

CDB offers three fixed-deposit products: Dhanasurekum, the regular deposit product for all, Aee for women and Deeghayu for senior citizens. As might be expected, deposit volumes track the interest-rate cycle and have shown a recent decline. The decreasing trend in deposit rates has the potential to drive capital away from deposits and towards alternative investment vehicles such as corporate debt, high-yielding stocks and property.

During the course of the year, Customer Deposit Officers were appointed to all branches with substantial deposit bases in order to serve deposit customers better. Together with the decentralising potential of our core banking IT solution, the appointment of these officers enables us to issue both term and demand deposit certificates of Rs. 3 Mn in value immediately at any branch.

Savings Deposits

Conventional savings products attract low-cost funds since interest rates are relatively low. For effective savings mobilisation, products must be custom-tailored to customer segments. Currently, we offer two savings products: CDB Real Savings, our general savings product, and CDB Ranketi, a savings account for young children. We are also expanding our student-savings product offering to schoolchildren.

Foreign Funding

In a breakthrough transaction, CDB recently secured its first foreign line of credit, worth $ 6 Mn (Rs. 780 Mn), from a multilateral agency known as the Belgian Investment Company for Developing Countries (BIO). The repayment period is four years and the fixed-rate loan has been fully-hedged against exchange-rate fluctuations. BIO made its offer of funds based on a comprehensive initial field survey in which a key criterion considered was CDB’s ‘urban funding, rural lending’ business model. This model makes us a net lender to the rural economy and an agent of economic inclusion, in contrast to many institutions whose funding/lending model works in the opposite direction. We hope to convert this first step into a strong long-term partnership with BIO in the future.

The process of structuring, negotiating and hedging this loan was handled by our Corporate Finance Division, which has finalised Rs. 4.2 Bn worth of debt funding for CDB to date.

Debenture Issue

In 2013, CDB issued five million subordinated, listed, rated unsecured, redeemable debentures at Rs. 100/- each, with an option to issue a further equal amount. The issue was oversubscribed, with applications exceeding Rs. 1 Bn.

The issue comprised three categories of five-year debentures with interest rates ranging from 15-16% (annual effective rate of 16% and 15.87% per annum) payable annually, semi-annually and quarterly. The object of the issue was to finance future growth in lending in the form of leases, hire-purchase contracts, etc., as well as to reduce our asset/liability maturity mismatch.

This issue helped strengthen our Tier 2 capital base and maintain a healthy capital adequacy ratio.

Future Outlook

The strategy of NBFI sector consolidation mandated by the Central Bank is intended to make the sector more robust and resilient, with a smaller number of strong players and enhanced competition between them. This, it is hoped, will further strengthen the financial sector and enable it to compete at the international level.

Foreign financial institutions in Sri Lanka will increase their participation in national economic activity, making a significant contribution towards the economy. This will further increase the asset base and improve the capacity of the sector to absorb losses and withstand internal and external shocks.

NFBIs will increasingly be able to attract low-cost, long-term funds in the form of deposits and debt instruments as interest rates decline. Consolidation will bring about cost savings and enable firms to diversify their customer offerings and business processes, helping deal better with market volatility and better manage risk. A stronger NBFI sector will attract more customers to create a larger aggregate capital base, making possible financial transactions on a larger scale and making financial services more affordable to those who make use of them.

On the other hand, the abolition of deposit incentive schemes will challenge institutions to find new ways to attract depositors. Financial institutions will have to change their strategic focus to concentrate on retaining customers; consequently, marketing and communications will play a vital role in securing customer loyalty. Longer-term deposits from loyal customers are needed to help institutions attain a better balance of assets and liabilities. Interesting times lie ahead.

Lending

Overview

CDB’s business strategy is based on realistic lending objectives defined against the opportunities and risks respectively associated with each of CDB’s three product categories: leasing, hire purchase and loans. Targets in each category are adjusted according to market capacity, which is continuously evaluated.

Structured Implementation of Lending Strategy

Highlights

Achievement Against Budget

Key Highlights	Actual Rs. Mn	Budgeted Rs. Mn	Achievement Against Budget (%)
LE	6,632	7,500	88
HP	3,235	2,750	118
Loans	2,770	3,400	81

Industry Growth

Accommodations - Industry (Rs. Bn)		Change (%) - Industry
31.12.2012 (a)	31.12.2013 (b)	31.12.2012	31.12.2013
471.7	553.1	21.4	17.3

Source: Central Bank of Sri Lanka.
(a) Revised (b) Provisional

CDB Growth

Accommodations - CDB (Rs. Bn)		Change (%) - CDB
31.03.2013	31.03.2014	31.03.2013	31.03.2014
19.4	25.7	44	32

Accommodations granted by the NBFI sector in 2013 amounted to Rs. 553 Bn, an increase of 17% compared to the previous year. But it has fallen by 4% when compared to the increase of 21%. Even though the industry average of accommodations granted increased only by 17%, CDB could increase its total accommodations by 32% and it was a drop of 12% compared to the previous year’s change.

Progress Against Strategic Objectives

Strategic Objectives	Our Performance	Update for 2014/15
Achieve lending disbursements of 13.6 Bn	Achieved a disbursement figure of 12.6 Bn	Further enhance our lending portfolio while focusing on different sources of lending other than vehicles
Maintain a collection ratio of 95%	Maintained an average collection ratio of 92.54% during the financial period	Devise strategies to maintain a collection ratio of 95% and to have effective and efficient monitoring
Maintain gross NPL ratio below 4%	Achieved a gross NPL ratio of 5.19%	Attract high-quality loans via proper credit analysis

Discussion

Loan Book

In an aggressively competitive market, CDB was able to increase its loans portfolio by 32% in 2013. This we regard as a creditable achievement, particularly due to the steep decline in vehicle leasing in Sri Lanka due to recent depreciation table adjustments. Island-wide presence and personalised service are important differentiators in CDB’s business offering; we are also seeking to achieve a gradual increase on microfinance lending.

During the year under review, we disbursed Rs. 12.6 Bn against the target of Rs. 13.6 Bn despite extensive competition and volatile interest rates.

Collections

Collections are monitored by the Post-Disbursement & Follow-Up Division (PDF); additionally, each branch manager, recovery officer and sales officer bears specific responsibilities with regard to collections.

The collection ratio averaged 92.54% during the year under review, a 0.79% decline from the previous year. This was due to uncongenial economic conditions.

Non-Performing Loans

NPLs: Industry

Non-Performing Advances - Industry (Rs. Bn)		Change (%) - Industry
2012 (a)	2013 (b)	2012	2013
23.5	37	19	57

Source: Central Bank of Sri Lanka.
(a) Revised (b) Provisional

NPLs: CDB

Non-Performing Advances - CDB (Rs. Mn)		Change (%) - CDB
2012/13	2013/14	2012/13	2013/14
431	1,349	91	213

Non-performing accommodations (NPAs) increased by 213% to Rs. 1,349 Mn from Rs. 431 Mn in 2012. The Licenced Finance Companies sector accounted for 16% of all NPAs, with distressed companies being the main contributors. CDB’s NPA exposure relative to total loans outstanding increased, reaching 5.19% at the end of 2014, mainly due to growth in accommodations. With loan loss provision considered, net NPA ratio was 2.73% at the end of 2014.

Pawning

The declining trend in gold prices continued during the last financial year. To prevent arbitrage with neighbouring countries, the Government imposed a tax of 10% on gold imports in June 2013. This was removed later in the year.

CDB’s pawning portfolio increased by a dramatic 83% in 2012; but, foreseeing the coming collapse in gold values, the Company adopted a risk-averse strategy in 2013. The advance-to-market value ratio was substantially reduced and a decentralised mechanism for following up recoveries was introduced. Robust risk-management strategies, including the management of concentration risk and default risk, help to reduce the impact of the fall in gold prices.

As at end of financial year, the Company’s gold portfolio stood at Rs. 645 Mn, a decrease of 39% compared to previous year.

Future Outlook

Continued easing of monetary policy should improve business confidence and promote private-sector credit expansion. This creates strong opportunities for domestic lending institutions. CDB’s lending activities will be geared to the financing needs of businesses. Our lending portfolios, somewhat diversified and fragmented, will be characterised by low and strongly collateralised credit risk.

We will focus on reducing our NPL ratio to less than 3% while maintaining a collection ratio above 95%. Improved asset quality will enable us to reduce provisions set aside for bad loans, improving profitability relative to business volume. Rapid private-sector loan growth due to lower interest rates will, however, threaten NPL ratios over the longer term. We are in the process of identifying ways and means to reduce the NPL ratio while increasing collections.

Our future plans also include greater effort directed at segments where our market share is low.

Other Products and Services

The following briefly reviews operations with respect to our other products and services.

Margin Trading

Taking a further step in the direction of becoming a full-service financial institution, CDB registered as a margin trader with the Securities & Exchange Commission of Sri Lanka in the year under review. With our strong marketing team, healthy financial position and over 50,000 clients, the opportunities in this area are considerable. This move is in line with Government policy, which encourages financial institutions to promote capital-markets investment by rural high-net-worth individuals. Our target market comprises middle-income earners who are not overly risk-averse. Our margin-trading operations will mainly be handled at our head office, though initial contacts and payments will be managed by branch outlets and through broker referrals. In entering this line of business, we are conscious of the challenge of declining market conditions and competition from foreign firms, and have taken appropriate measures to mitigate these potential sources of risk.

Global Payment Services

CDB Money Exchange exchanges accepted foreign currency into Sri Lankan Rupees. The facility is available at every branch. Except commercial banks, CDB is the only financial institution engaged in money remittance services. Walk-in exchange and remittance customers are often open to cross-selling initiatives involving our core products.

In the face of intense competition from commercial banks, CDB achieved the year’s targets from MoneyGram and Money Exchange in 2013.

Institutional Capital

Everything for You!
CDB enhanced its reach by opening 15 outlets during the year increasing the total number of outlets to 59 island-wide.

We Listen to You!
To deliver the best and enhance superior level of customer service, CDB relocated two outlets to more convenient locations.

Convenience Matters Much!
CDB during this year established three new ATMs at Wattala, Mahara and in our Premier Centre - Colombo 07.

YES! We are a Trustworthy Business Entity.
A big thank you to all our customers who placed trust in us in the issue of ten million debentures at Rs. 100/- each which was over-subscribed with applications exceeding Rs. 1 Bn.

A Breakthrough Transaction!
CDB acquired the first foreign funding line worth $ 6 million from Belgian Investment Company for Developing Countries (BIO).

A Margin Provider too!
Expanding our product portfolio, we are now catering to the investors who wish to expand their share investment portfolios through margin trading facilities.

A New Home!
All of us are standing-by for a housewarming occasion as we commenced constructing our new corporate office.

With a New Perspective of BCP
Business continuity planning (BCP) identifies our exposure to internal and external threats and synthesises to provide effective prevention and recovery, while maintaining competitive advantage and value system integrity.