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Strategic Plan for Seylan Bank

PLC.
2013-2018

BSc in Business Management (Special)-UGC Degree
13F2
Strategic Management
Group Assignment
Productivity & Management Development Division
NSBM
0

Group Members

D.G.L.R DE SILVA

BSC-UGC-MGT-1315-319

J.H.M.G.C JAYAPATHMA

BSC-UGC-MGT-1315-221

R.G.A.C ARIYARATHNA

BSC-UGC-MGT-1315-182

M.M.S.P BANDARA

BSC-UGC-MGT-1315-189

W.D.M FERNANDO

BSC-UGC-MGT-1315-077

M.H.MOHAMMED

BSC-UGC-MGT-1315-240

M.M.N.L BANDARA

BSC-UGC-MGT-1315-188

U.M.D.C FERNANDO

BSC-UGC-MGT-1315-206

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Preface

We are extremely happy to produce this report regarding the strategic plan of Seylan
Bank. In our endeavor we have mainly taken the PESTEL and SWOT Analysis types of
environment analysis, the strategic group mapping, and compared with similar other
banks in Sri Lanka and we have developed a Strategic plan for Seylan Bank for the next
five years. And through that we have compiled this report.
The main idea of doing this project is to orchestrate a Strategic Plan for Seylan Bank
from the year 2013 to 2018. The strategic report includes ratio analysis and various
other research and market share nucleuses and there growth prospective in the coming
years after their almost Bankrupt situation few years ago. We have collected data from
their Annual Reports and online and utilized that Data to transform into meaningful
information, and then implemented various conceptual and theoretical methodologies.
In doing so we able to identify various factors and culminate that into the report.
When going through this report you could see the different ways & methodologies, such
as PESTEL analysis, SWOT analysis, Strategic Group Mapping, while identifying the
geographical localities, quality and to what extent it has been successful in this project.
And also the constraints of the project are stated as well.

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Acknowledgement

We would like to gratefully acknowledge the contributions of Mr. Kolitha
Ranawaka our Strategic Management Module Lecturer for his guidance &
helpfulness in preparation of this report as a fulfillment for our Strategic
Management Module Assignment.
With the consistent support of our team members Mr. Gihan Jayapathma &
Mr. M.H.Mohammed gathering of the Data, providing the Data regarding Seylan
Bank, Research and formulating was of utmost importance as it helped to
formulate the major parts of the Strategic Plan.
Priyanwada, Shani, Nishan, Asith and Chinthaka contributed in numerous ways
that they could with their technical expertise and last but not the least the
Anchorman Mr. Lalindra De Silva.
I would like to gratefully acknowledge the outstanding contributions of Lalindra
De Silva & Gihan Jayapathma. Were it not for their outstanding support &
creative contributions to this project, it would not be the success that it is.
“Thank you.”

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Executive Summary This report emphasis on how Seylan Bank. We have been a very popular bank among our expatriate community who regularly remit their hard earned money to their kith and kin through us reaping the rewards of many direct and indirect benefits we offer. Strategic locations have been identified to open up branches on a selective basis. better and more customer friendly. analyzing and implementing appropriate suggestions’ and recommendations. While the external environment would remain challenging due to global economic conditions. The banking sector which has remained strong and resilient in adversity will have a key role to play as Sri Lanka completes its remarkable journey of recovery and reconciliation and marches towards the milestone of US$ 4. every player would have to adapt and evolve to stay competitive and profitable. We foresee tremendous opportunity for growth as our nation overcomes the challenges posed by the 30-year long war and embraces the opportunities that peace and stability has paved the way for. The Bank plans to grow the branch network at the same pace as in 2012. We shall do so by leveraging our strengths further while enhancing areas such as customer service and staff training and development. Infrastructure development and upgrading of facilities will continue at a pace with existing branches made bigger. We aim to further strengthen our offerings in the remittance market while expanding the number of employees and agents representing us in the relevant markets. The task before us is now to advance from our phase of consolidation to a phase of growth. Trade finance an Treasury units will play a more vibrant role and we will develop an even more focused approach towards SME. and is now in the process of growth through Strategic Plans that helped the Bank when they had their backs to the wall and by collecting data. We have formulated a comprehensive new product development strategy and a number of products have been identified for upgrading in addition to new products to be launched with numerous value additions to our current and potential customers. who nearly when into solvency and Bankruptuncy and within the span of three years how it stood up consolidated its position in the competitive Sri Lankan Banking arena.000 per capita income. 4 . Alternate channels such as Internet and SMS banking will also be further improved. retail and premier banking functions. Corporate banking.

Capital is increasingly becoming a scarce commodity and even a limiting factor for the growth of banks. The debenture issue which was planned for last year was concluded in early 2013. Cost containment and cost management will continue to be a priority area. We will use our product portfolio and staff skills to grow our noninterest revenue streams.We have also set our sights on reducing the NPL ratio to a single digit by end 2013 through rehabilitating troubled loans and through effective recovery strategies. 5 . Going forward. a culture of passing capital to more productive business units will be implemented to ensure its optimal use. which has boosted our capital base further. Our IT platform will be strengthened to support the overall growth and development strategies of the Bank.

................................45 6 .....32 Conclusion……………………………………………………………………………...22 PESTEL Analysis……………………………………………………………………...............................……............…........…….....1 Preface.....Content Group of Members……………………………………………………………………..........3 Executive Summary………………………………………………………..........4 Seylan Bank Introduction……………………………………………………………7 Background………………………………………………………………………………....….......2 Acknowledgement……………………………………………………...............………11 Swot Analysis Of Seylan Bank………………………………………………...……43 Recommendations……………………………………………………………..............……12 Porter’s Five Forces Model…………………………………………………….............8 Methodology………………………………………………………………………………10 Company Profile…………………………………………………………………...……...19 Strategic Group Mapping……………………………………………………..…….

It also enables to gain a better understanding of the bank while maintaining the transparency of the information to all their stakeholders. based on the various strategies adopted between 2009-2012 and the success of these plans. pricing. improving of the business performance. MissionWe provide our customers with financial services that meet their needs in terms of value. whilst always acting as responsible corporate citizens. service quality and obtain process efficiency. delivery and services. Such initiatives and strategies have already shown growth in business and banks profitability as evident in our 2012 performance.    Success strategies and business growth Expansion of our delivery channels for faster reach Improved credit quality Success Strategies and Business Growth After the change of management in 2009 the bank implemented its 2009-2011 strategic plan to build customer confidence and address various issues that were prevailing at that time. We have identified strategic priorities as per the following scope and detailed in the relevant sections where necessary. its implementation and the result are discussed in detail under this report. We will do so through a team of Seylan bankers who are recognized and rewarded for results orientation. Strategic plan 2013-2018 was built on growth. We will ensure that our efforts translate to meeting the expectations of our shareholders. the divisional performance and the strategic adopted by the bank to achieve the pre-set goals according to the strategic plan and the budgets. Their theme of last year’s annual report IT WORKS is based on the strategies adopted from 2009-2012 for readers to understand the significant progress made by the bank over the said period. This report is written. VisionTo be Sri Lanka’s leading financial services provider as recognized by all our stakeholders. 7 . Main strategies adopted.Seylan Bank Introduction This report details the performance review.

The new board under the Chairmanship of MR. a new board of directors was appointed to manage the bank. the new institution was part of the Ceylinco Group of Companies.a major Sri Lankan conglomerate operating in a wide range of industries. Dr. From its founding.a state-owned institution. summing-up its promise in a service motto that soon caught the attention of prospective customers: 'The Bank with a Heart'. The effort of the management and the staff paid dividends in a matter of months and Seylan Bank PLC rose like a Phoenix from the ashes and reached a mile stone in 2010 by recording a Profit after tax of LKR 1. Eastman Narangoda. unexpected crisis of public confidence resulted by the crisis evolved around the "Golden Key Credit Card Company" which is a subsidiary of the Ceylinco Group of companies. took the challenge of re stabilizing the bank and regaining the customer confidence.it was designated a Licensed Commercial Bank and incorporated as a public company with a broad base of shareholders. In December 2008.Background HISTORY Seylan Bank PLC was founded in 1987 and opened its doors for business on 24th March 1988. And now this report unfolds the strategic plans that were adopted and to be taken 8 . The goal of the Bank's Founder Chairman. even a bit austere. Seylan Bank was confronted by a sudden.From the outset. With the timely intervention of the Central Bank of Sri Lanka under the provisions of Section 31 of the Monetary Law Act. was to offer retail customers a more welcoming. service-oriented alternative in a banking culture that was generally perceived to be formal and regimented. customerfriendly choice. a veteran of the banking industry who had previously held the position of General Manager/CEO of National Savings Bank .the traditional banking district of Sri Lanka's largest city.2 Billion surpassing the 1 Billion thresholds for the first time in it's history. Seylan Bank presented itself as a flexible. Originally named Seylan Trust Bank Limited.in Colombo Fort. Lalith Kotelawala.

Seylan services  International Trade :Seylan Bank Trade Services  Corporate Banking :In our short period of existence  Offshore Banking :Eligibility criteria for opening accounts  Development Banking :A novel idea of introducing a credit card  Pawning services :Seylan Bank now offers you the highest value 9 .within the next five years.

The bottom-up process that was followed in the formulation of the strategic plan where Seylan Bank got the input and support of the staff across the network meant greater understanding and a singular focus on key initiatives. the objectives multi-fold . 10 . strengthening risk Management processes and further developing the human resources across the board. Seylan Bank have and shall continue to update the plan through the rest of the period bringing in the learning’s of what works and what does not and ensure that this will remain a live and meaningful document that will continue to charter the Bank’s way forward. The strategic plan which got off the ground in January and Seylan Bank’s adherence to the key actions identified proved an invaluable asset not only for the success that Seylan Bank achieved during the year but also in terms of preparing Seylan Bank for further growth and improvement in the years to come. While the main focus was to improve the core – business. including improving overall customer satisfaction. While the external environment would remain challenging due to global economic conditions. Seylan Bank foresee tremendous opportunity for growth as our nation overcomes the challenges posed by the 30-year long war and embrace the opportunities that peace and stability has paved the way for. every player would have to adapt. adding more value to our stakeholders through reinventing the product portfolio.Methodology The operational outlook which brought back the Seylan Bank to its current status. enhancing internal processes to improve efficiency.

as recognized by all their stake holders.M. M.R DE SILVA BSc Business Management (Harvard). The company's main focus is to be Sri Lanka's leading financial services provider . MSc. The top management consists of eight members who have a vast knowledge & experience in the Banking Industry.ACCA.C. FERNANDO AAT. AAT Finance Director .Executive Director – Ms.D. Banking & International Finance.L.H. in Banking & Finance AAT.L. R. CEO – Mr. CIMA. M.M.Ms.Mr.C FERNANDO BSc. The Board of Directors are as follows.M.ACCA.C JAYAPATHMA BSc Business Management (NIBM). ACCA.CMA. D. Accounting (Sp) (First Class Honors) (Colombo).CIMA.A. MBA Project Management (Moratuwa) MSc Actuarial Science (Cambridge).CIMA.G.Executive Director. U.G.CFA Non.M.P BANDARA BSc. ARIYARATHNA BSc in Business Management (Special) Kelaniya. J. MSc Marketing Management (Cambridge) PHD Economics (Oxford).G.CMA. Executive Director .CFA. MBA Finance & Accounting (Colombo).Mr. CIMA.M.D. ACCA. FMCC. MSc.H. CGMA Director – Ms. M.S.N. Business Finance (Harvard) CIMA.BANDARA BSc.Company Profile The Seylan bank was formed in the year 1987 to cater to the Banking Industry.CIMA Executive Director – Mr. CFA Managing Director – Mr. 11 . CIM Non. AAT. Banking & Finance (Special) 1st Class Hon. W.MOHAMMED BSc Finance Management (PLYMOUTH).

SWOT Analysis of Seylan Bank The SWOT analysis is a tool which can be used to highlight the strengths. SWOT has been used to evaluate the firm’s strategic situation in the competitive marketplace. Successful marketing strategies emerge from a comprehensive situation audit. While the strengths and weaknesses are affected by factors internal to the company. Therefore a SWOT analysis is essential for effective strategic marketing. the opportunities and threats are related to the external environment. Therefore SWOT analysis proves to be a useful tool that helps to carve business strategies in order to keep a sustainable share in the market. This helps to formulate the strategies and to better understand the competitors. threats of Seylan Bank. The marketing strategies are evaluated from both external factors opportunities & threats and internal factors strength & weakness. On the other hand. partners & customers. Also being aware of any weaknesses that exist in our product will help us to minimize any threats that may reduce the demand for the product. The environmental factor opportunities & threats are uncontrollable whereas the internal factors strength & weakness are seen as controllable for the organization. Analyzing the strengths of our product will help us to find out any business opportunities that will enable our company to have a stronger market position. 12 . The analysis will give the clear idea about company’s key strength & weakness and the potential opportunities & threats. The SWOT analysis on firm’s marketing situation is determined through internal & external strategic analysis which covers the firm’s traits (strengths & weakness) and competitive factors (opportunities & threats). The comprehensive SWOT profile of Seylan Bank provides an in-depth strategic analysis of the bank’s business and operations. the information on competitive activities and customers collected through market intelligence which helps to maximize the fit between the organization’s capabilities & future opportunities. weaknesses and opportunities. Firms which successfully evaluate market intelligence will enjoy financial performance.

13 .STRENGTHS Seylan Bank’s core strength is its people who united and managed to overcome from crises. opportunities and threats. It shows the strengths.Overtrading INTERNAL -Bank’s undue expansion in limited capital _ OPPORTUNITIES THREATS -Independent identity with a -Threat of recession contains global banking failures EXTERNAL NEGATITIVE -Liquidity risk POSITIVE completely new board helps to boost the confidence of management as well as employees The above diagram shows the SWOT analysis of Seylan Bank. weaknesses. WEAKNESSES .

09) Financial exclusion 10) Weaker brand image in the market (problem of 2009) 11) Complex and nonproductive sector organizational structure 12) Credit to non-productive activity 13) Inadequate access to global financial system 14) Structural weakness such as a fragment industry structure. restriction on capital availability and development lack of industrial support institutional . 14 01) Overtrading 02) Bank’s undue expansion in limited capital 03) Bank is not aligned with the current customer needs & demands. 13) Enhance higher ATM coverage in the country and newly open the ATM in rural area. 10) Bank have a wider product line. 06) Present unstable market condition increases their profit margin than previous year. 14) Done the CSR activities than other competitors. 05) Poor asset management& capital inadequacy 06) High operation cost 07) Inadequate deposit mobilization effort 08) High level of nonperforming asset. 01) Seylan Bank’s large innovative services provided to the customers 02) Offered high interest rates & additional bonus on minimum deposit amount. 03) Expand its reach to rural areas 04) Highly diversified customers’ portfolio 05) Diversification in their operation in banking including insurance investment banking assets management and increase the facility for mobile & internet banking. 04) Sizeable amount of Non Performing Loans. 09) Increases shareholders fund and earning.Weaknesses STRENGTHS (Internal) & Opportunities – WEAKNESSES (Internal) 1) Seylan Bank’s core strength is its people who are united to manage any overcome from crisis.Seylan Bank SWOT ANALYSIS: Threats Strengths . 11) Network of branches spread all over the country and provide easy access to entire spectrum of customer. 12) Improve the access to financial service for customer. 08) Increases the earning per share than previous year. 07) Have succession plan through talent management team.

It facilitates the customization to manage customer’s accounts by the SMS push and pull technology. pay utility bills. requesting the Bank for many ad hoc functions such as cheque books. Further. check credit card details and many more day-to-day banking functions. the Bank is currently improving this technology with 15 . SMS alert facility was introduced in year 2011 as a new marketing drive. Being the first member of experiencing the SMS banking service island wide.(minimize the risk) 08) Stronger productivity growth 09) Opportunities to access foreign market 01) Threat of recession contains global banking failures 02) The intervention of monetary board is the broader threat to economic equilibrium. Seylan Bank PLC was the first bank in Sri Lanka who introduced SMS banking to its customers in year 2004. 03) Liquidity risk 04) Competitors bank in the market 05) Higher rules and regulation are introduce by the government ( establish new act & low) 06) External party have negative attitude about the bank( bank corruption in seylan ) 07) Weak brand name Strengths:  Inventor in SMS banking service in Sri Lanka. This system is connected to almost all Telecommunication’s operating in the country. promoting the SMS facility as a fake detection method for cardholders’ transactions. strengthening the capabilities to face future challenges & enhance the existing services. With this feature customers have the capability of transferring money between their own accounts.OPPORTUNITIES (External) THREATS (External) 01) Independent identity with a completely new board helps to boost the confidence of management as well as employees 02) Deliver higher financial value to its customers & investors 03) Highly market focused 04) Strategic initiatives such as domestic & international business opportunities 05) Empower disadvantaged group 06) Increase the profitability by accessing international financial market ( bank have only one blancher in Bangladesh for internationally ) 07) Expand the their business in product wise using related or unrelated diversification achieve the competitive advantage.

Weaknesses:  Lower Staff strength Seylan bank PLC consists with total staff of 3. This facility has also been extended to all expatriates living abroad to maintain and monitor their accounts from anywhere in the world. In this case Seylan bank PLC having the lack of essential resource to gain more customers than rivals. Other than that.a view to facilitate more enhanced security features to provide a more advanced banking functions based on market dynamics and collated consumer inputs. Tamil or English. It improves customer convenience in banking services.  Inventor in Phone banking service in Sri Lanka Seylan Bank PLC is the inventor of multilingual phone banking product in Sri Lanka was launched by the Bank in 1998 to its customers under the flagship “Seylaphone”. Lack of human resource may lead to poor performance of the bank & customer turnover will be increase.061 Island-wide which is the lowest among rivals in the industry. The bank is delivering the services to customers free of charge for life time. It has become a famous way for customers to carry out basic banking using any fixed-line or a mobile telephone. Account holders of the Bank could register and use this facility in their preferred language Sinhala.  Poor ATM network Automatic Teller Machine (ATM) is a computerized telecommunications device that enables the clients of a financial institution to perform financial transactions without the need for a cashier. human clerk or bank teller. some of key rivals consist with overseas banking services while establishing branches in abroad.  Poor Branch network Seylan bank PLC has 147 branches Island wide which is also lower than the key rivals. 16 .

 Knowledgeable and trainable staff compared to Government Banks. Threats :  Commercial bank has placed business promotions officers overseas in Jordan Kuwait. Some of the key rivals focusing on providing banking facilities to small & medium enterprises (SME) targeting different market niches while Seylan bank having narrow common markets. When consider the ROA of Seylan bank PLC (1.17%) . Since they are having a reduced supervision costs compared to other financial rival institutes.  Seylan Bank PLC has an up to date technological knowhow which efficient the operations within the bank. Saudi Arabia and the United Arab Emirates with the objective of promoting the banks e-exchange facility among the Sri Lankan 17 . Opportunities:  Seylan Bank PLC is having a small number of staff compared to other financial rival institutes. Oman.  Poor product portfolio Even Seylan bank PLC providing corporate. which is comparatively low than key rivals. their product portfolio is poor among those services than rivals. Qatar. ROEs between 15% and 20% are generally considered good.24% ROE which is lower than the key rivals as well as the standard. they can focus on new banking opportunities by allocating those saved funds. treasury & international banking services. And also it’s easy to provide training. In this case Seylan Bank PLC having 11. personal.  Poor Return On Equity (ROE %) Return on equity (ROE) measures a company’s efficiency at generating profits from every unit of shareholders' equity. Poor Return On Assets (ROA %) Return on assets gives an indication of the capital strength of the company. It’s an ease for the management to control and monitor the staff. This will impact on profitability as the earning on assets is low. research and development to get the best potential outcome of them through increasing the efficiency and productivity.

18 .  Banks open from 9 am to 1.  Unavailability of skilled and know ledged expertise.  Key rivals capturing the global attention.  Rival Banks have gained a larger provision of market capitalization.expatriates and to canvass new accounts while promoting various other types of products. Minicom – Banking centers at Cargills Food City super Markets and several service points.  Commercial Bank providing services in banking centers at Arpico Super Centers: Providing holiday banking centers.30pm on bank holidays.

assets and liabilities. These forces are firms in other industries offering substitute. bargaining power of Buyers. They are managing the capital. and thereat of new entrants. mortgages and ATM networks to win the market and its survival. liquidity. Porter who introduced Porter’s Five Force Model in 1979 Harvard Business School. Competitive Rivalry within an organization. asset quality. Industry analysis and business strategy development is the main framework of it.Porter’s Five Forces Model Michael E. Interest rate risk. The Seylan Bank to get an understanding about the profitability and industry’s competition. profitability. Not only that but also Porter’s five factor model helps to enhance some activities done by Seylan bank. leases. debit and credit cards. Banking industries are the most competitive. providing banking services such as personal loans and deposits. checking accounts. 19 . bargaining power of suppliers. The Porter’s Five Forces Model show how the competitive landscape in an industry is impacted by five forces. With the help of this model Seylan bank can make strategies such as focus on individual customers and smaller businesses. clearing. Industry is favorable entry when five forces are higher.

commercial Bank takes higher place in the industry. it is fairly easy to open up a smaller bank operating on the regional level. the intensity of competitive rivalry are the major competitiveness of the industry. Most industries. There are 6 factors favor price competitive . large. 20 . However firms are not reasonable price. Threat of Substitutes Products There are plenty of substitutes in the banking industry. consumers. The banking industries are highly competitive because everyone who need banking services for their financial activities. According to the banking industry analysis. While it is nearly impossible for new banks to enter the industry offering the trust and full range of services as a major bank. Banks strive for a competitive advantage over their rivals. Every banking sector is in a race to see who can offer both the best & fastest services. Seylan bank offer higher rates. No product differentiation . This consolidation furthers the role of trust as a barrier to entry for new banks looking to compete with major banks. Other companies offer similar services insurance. Threat of New Entrance Many Companies enter the market as new comers. as consumer are more likely to allow one bank to hold all their accounts and service their financial needs.Market structure. The banking industry has undergone a consolidation in which major banks seek to serve all of a customer’s financial needs under their roof. taking deposits and lending money & non-banking financial services. capacity utilization. The nature of the sales process. mutual funds. Sampath Bank. It is very higher to new entrance.BOC Peoples’Bank. According to our analysis among the rivals. Ultimately the barriers to entry are relatively low for the banking industry. According to deposit money of the Seylan bank have more competition with commercial bank and BOC. secretive & lumpy. or fix income securities. Commercial Bank. These are HNB. there are 5 competitors in the market for Seylan Bank.Competitive Rivalry within an Industry In the traditional economic model rival firms get zero profit. Because of the taking highly risk projects.

1. One major factor affecting the power of buyers is relatively high switching costs. need to establish brand identity. The internet has greatly increased the power of the consumer in the banking industry. One person who cannot come along and to start a new bank. If a person takes loan. Bargaining Power of Customers. Bargaining Power of Suppliers According to the banking sectors Seylan Bank have no big threat from suppliers. limited access to essential resources or Channels of distribution. licencing costs. Customer deposits. 2. Loans from other financial institutions. The power of the suppliers is largely based on the market. patents. high capital costs. use pay bill from internet. Seylan bank use online services. To try and convince customers to switch to their bank they will often times lower the price of switching. By utilizing these four major suppliers. The internet has greatly increased the ease and reduced the cost for consumers to compare the prices of opening/holding accounts as well as the rates offered at various banks.Banking Industries focus on Services Oriented. Loans. Capital is the primary resource on any bank and there are four major suppliers (various other suppliers [like fees] contribute to a lesser degree) of capital in the industry. 4. the bank can be sure that they have the necessary resources required to service their customers' borrowing needs while maintaining enough capital to meet withdrawal expectations. Economies of scale and scope. During right liquidity periods suppliers of capital will act continually. credit card. 21 . baked securities. deposit A/C and mutual funds in a bank it can be extremely tough that person to switch to another bank. their power is often considered to fluctuate between medium to high. though most people still prefer to stick with their current bank. 3.

Comparative Market Positions of Selected Banking Industries: 2009 High Commercial Bank HNB Performance Medium BOC Peoples’ Bank Sampath Bank Low Seylan Medium Low Geographical Area 22 High .

2010 High Commercial Bank Performance HNB Medium BOC Seylan Low Sampath Bank Peoples’ Bank Low Medium Geographical Area 23 High .

2011 HNB High Performance Commercial Bank Medium Seylan BOC Peoples’ Bank Low Sampath Bank Low Medium Geographical Location 24 High .

2012 Commercial Bank Highgh Seylan HNB Performance MMedium Sampath Bank BOC Peoples’ Bank Low Low Medium Geographical Area 25 High .

Comparative Market Positions of Selected Banking Industries: 2013 High Commercial Bank Performance HNB Seylan Bank Medium Sampath Bank BOC Low Peoples’ Bank Low Medium Geographical Area 26 High .

2014 High Commercial Bank Seylan Performance HNB Medium Sampath Bank BOC Peoples’ Bank Low Low Medium Geographical Area 27 High .

2015 High Seylan Commercial Bank Performance HNB Medium Sampath Bank BOC Peoples’ Bank Low Medium Low Geographical Area 28 High .

2016 High Seylan Commercial Bank rPerformance HNB Medium Sampath Bank BOC Peoples’ Bank P Low Low Medium Geographical Area 29 High .

2017 High Seylan Commercial Bank Performance HNB Sampath Bank Medium BOC Peoples’ Bank Low Low Medium Geographical Area 30 High .

2018 Seylan High Commercial Bank Performance HNB Sampath Bank Medium BOC Peoples’ Bank Low Low Medium Geographical Area 31 High .

maintain a good global 3. 2. the industry needs to be aware of them to adapt itself to avoid the threats and exploit the opportunities in the environment. developments in the financial services. considerably stabilized and Sri Lanka is united under one Government after a span of 25 years. The political 1. . 32 . A stabilized political system is good news environment is for the Financial & Banking Industry.The loosened restrictions on the economy reputation for foreign allow the Seylan Bank to take more Investments and decisions that are independent. of conquering that virgin market and of 3. Political Factors Explore opportunities presented by the upsurge in the demand for trade finance for investment in post-conflict development in the North and the East.Foreign exchange coming in to the country. It’s the Government’s responsibility to stabilizing their industry position throughout the island. While these factors are out of the industry’s control. lessened the degree of The opening up of North and East has given Intervention in the the Seylan Bank the attractive opportunity economy. In the Banking Industry they are more 2. The External Impact on The Film Industry Environment 1.PESTEL Analysis The Macro Environment A PESTEL Analysis is undertaken to understand the dynamics of the external environment. which the film industry operates in. Government has confident of planning long term strategies.

4.Continue with Bank’s commitment to innovation and product development which will improve service level and enhance market share. strengthening risk management processes and further developing the HR. portfolio. Maximize foreign exchange gains from increased trade volumes.To create innovative features as well as tough rules and facilitating of physical resources. Recovery from the 3.Government imposes -4. enhancing internal processes to improve efficiency. A lot of development -1. 33 . 1.The development projects taking place projects are going on throughout most rural areas have been across the country. Economic Factors 2. players to the market. Capitalize on market arbitrageurs in economic downturn.Through reinventing the product yet settled down. Factors . forex and equity trading. 3. cost cutting measures have to be adopted. creating a steady flow of money in the usually laid back markets. Political -as a result.4. Lower interest rates have lured international 2.Crisis period has not 4. regulations and charge. There is plenty of opportunity for the bank industry to strengthen their profits by concentrating on marketing campaigns in these areas.

Economic 5.The lucrative economy (bull market) prevailing in Sri Lanka has been luring investors. Factors . This poses threats as well as opportunities to the bank industry as more financially stronger companies enter and compete for a share of the bank industry. One of the best stock markets in the world.Continue with Bank’s commitment to innovation and product development which will improve service level and enhance market share. 34 . 6. 6. Increase capital gains from government tough rules and securities trading with the downtrend in regulations regarding rupee interest rates. finances.Government impose 5.

3. Increase number of higher education institutes. 4. Tourism has taken a sharp rise in the country.000 in two months from date of launch. The tourist boom can be made handy to market the Seylan Bank value added services. Bank Industry has the opportunity to population venture into new Segments and fill up a gap in the market for the elderly population.Research shows women work more than 8. 8. .The young generation men do. Factors 6. is positive for the industry. granting student loans for higher education. Lifestyles are modern and fast paced. Socio-cultural 2. 2. 7. 5. 6. Marketing via social media. fan base to 20. reason to widen their production portfolio.Women are employed more than ever.A population with a new taste palette too is on the rise.Developed bundling of products and services and simplified processes to benefit 35 . Increasing ageing 1.focused on existing product development based on existing segments in order to add 4.1. launching Seylan Bank ‘s Facebook fan page and enhanced Factors 3. Many Sri Lankans are migrating back to Sri Socio-cultural Lanka. giving the bank industry a 5. Increased Tamil population. 7. and marriage is postponed. more value and enhance the relationship through co-creation initiatives. -Introduction of retired pension schemes. thus the trend of working women gives priority to work. The return of Sri Lankan migrants back to the country gives the Bank Industry a chance to expand their customer base.

2. 5-a. operations and services. 2.the internal and external customers(young generation).Trends and operations.All identified possible operation processes were transferred to centralized services for specialized support to ensure efficiency and cost savings. 4. Technological Factors 1. training etc…. 3.the funds transfer process was 4.Automation and improvements 36 . Industry during the last few months. 3. among them staff appraisal.Data from the bank’s separate systems. Technology is being obsolete at a mindblowing rate. -Manny HR processes that were hitherto manual were automated. Fact automated. enabling business units to make better informed decisions.Automation and improvements . 5.Bankers have been 1. consolidated in a single “client view”.Enhance IT-based solutions to deliver superior benefits to Technological internal and external customers.The continuous introduction of modern introducing latest technology in the industry facilitates the technology into the Sri Bank’s to keep a breast with the Lankan Banking international Banks. The Bank Industry owes it for technology for their undisputed standards of quality.

5-f.Testing of the core-banking system.Bank’s card management system platform upgraded to provide the infrastructural facilities for the Europay. SMS banking.friendly banking. subsystems and all the external interfaces was completed during the latter part of 5. 37 . such as cheque imaging truncation system. -5-c. Several Management Systems improved to facilitate user..5-b. The IT Department in conjunction with Misys developed and parameterized the module which automated the downgrading Technological of non-performing current accounts in Factors ors 2012. 5-d. cheque return management module and some other modules to enhance efficiency of the branches.Automation and improvements Technological Fact year 2012. MasterCard and visa(EMV) upgrade. IT Steering Committee was further improved to accommodate Subcommittees of the various business units of the Bank. -5-e. 5-g.Internal development team rolled out comprehensive remittances module. internet Banking and pawning systems.

work consumes impacts on the large amounts of energy and natural environment. 2.Concern for the 1. the (EMS)) demand in the area significantly goes down. Ecological Factors 3. finance for a cause to fund the flood (Environmental victims. 5-i. resources.Adopting green initiatives. the printing of salary slip was discontinued and customers also enjoy the option of getting their monthly statements online. They generate waste and sound pollution. Ecological Factors 1. 3.5-h. And when victims are unable to go Management Systems to banks to withdraw money clearly. 38 .In the office complex. Structured Systems Training Programme for staff to develop their skills and knowledge. The demand for saving can both protection of increase and decrease during times of environment has been crises. improvement of branch IT infrastructure including expansion of its services to newly open branches and ATMs. In a “green” initiative . Relief support groups tends to on the rise.Banking operations 2.

Board Meetings. strict laws and standards. -. -. Systems have to regulatory demands and . of Processes.Regulations to help banks carry out their -.-. -. Legal Entity Act. as they already adhere to highest ethics. services and operations. Bank Act of Sri Lanka. morals.Approve and oversee -.The Board approved the 4 – year strategic the Bank’s strategic plan 2012/2015 on 12th December 2011 objectives and and communicated the new strategic corporate values and objectives and corporate values to the staff. -. . -.Legal factors have an effect on both service and Employment operations. The Committee ensures that the Bank’s Chief Risk Officer/Risk Unit identifies principal 39 . The demand for quality standards gives Legal Factors -Social discretion and only a few banks a competitive advantage cultural values. safety regulations. Identify the principal risks and ensure implementation of appropriate systems to manage the risks prudently. -. Legal Factors -.Disability the bank industry would have to bear a Discrimination considerable cost if changing the usual way Legislation. Compliance and legal regulations for Bankers. It helps towards the up liftmen of the industry. ensure that these are The timely implementation of strategies communicated was monitored through frequent reviews at throughout the bank.The Board has delegated these responsibilities to its Integrated Risk Management Sub-committee. Protects the bankers. -International recognition can be gained by through high quality banking procedures done in the highest possible way.

implemented and monitored at Board level. whilst the Directors derive their responsibilities from the regulations and directions. 40 . who are in a position to: i. Approve implementation of a policy of communication with all stakeholders. The decisions and/or actions taken are submitted for Board’s information and/or action (if deemed necessary). mainly. -Review the adequacy and the integrity of the Bank’s internal control systems and management information systems. guidelines to be reviewed and approved by the Committee. -Define the areas of authority and key responsibilities for the Board of Directors themselves and for the Key Management Personnel. direct activities. -. operations and risk management.The key responsibilities of key management personnel are defined in their job responsibilities. The KMPs were reviewed and approved by the Board during the year.Adequacy and integrity of the Bank’s internal control systems and management information systems were reviewed by the Board Audit Committee. and iii. -. exercise control over business activities. shareholders and borrowers. including depositors.risks and puts in place polices and -. as defined in the International Accounting Standards. Identify and designate Key Management Personnel. ii. Systems put in place were being tested by the Risk Unit.The Board has identified Key Management Personnel who are in a position to influence and exercise control as mentioned herein and deemed as ‘related parties’ in order that necessary steps could be taken to abide by/comply with the relevant Banking Act Directions [Ref: 3 (7) of this report] and Sri Lanka Accounting Standards disclosures on related party transactions. the Banking Act Directions. -. A Stakeholder Engagement Policy has been approved. -. significantly influence policy. . creditors.

with the Key Management Personnel to review policies. The appropriate succession plan for Key Management Personnel is reviewed by the CEO and the HR Division submits such succession plan to the Board’s Nomination Committee for its review and/or concurrence annually or as deemed necessary.Effectiveness of the Board’s own governance practices including i.Periodically assess the effectiveness of the Board of Directors’ own governance practices... needs basis. Communication of Board approved policies and decisions are conveyed through Board minute .Ensure that the and/or attend by invitation to the Board Sub-committees.Key Management Personnel are co-opted -. the selection. Minutes of the Bank has an Subcommittees and action plans arising out appropriate of same are tabled at Board Meetings for succession plan the Board’s review and/or follow up. including: . that is consistent with Board policy. the management of conflicts of interests... explaining matters relating to their -. nomination and election of Directors and Key Management Personnel.Meet regularly. -. 41 . Evaluation of the Board Performance including all governance practices are assessed by the Directors individually and collectively discussed/reviewed by the Board annually i. on a respective functions.. . . the determination of weaknesses and implementation of changes where necessary.-. ii. and iii. establish communication lines and monitor progress towards corporate objectives. Key for Key Management Personnel are also called by Management the Board when demand required Personnel.extracts and the appropriate follow-up actions and reports/decisions of the relevant Key Management Personnel confirms this .. ii and iii specified herein is ensured.Ensure that there is appropriate oversight of the affairs of the Bank by Key Management Personnel.

- But. The Board is updated of the changes in the regulatory environment and maintains an effective relationship with regulators. 42 .. potential of the economy. it is safe to say that the current situation of the external environment is favorable to the Bank industry as well as Seylan Bank.. pressures from competitors will be inevitable. - . Considering the above PESTLE analysis. advances in technology and the expansion of customer base) reflects that competitors too will be lured to do commercial operations. - Although the bank industry is faced with opportunities to exploit. all these positive factors (stabilized political situation. Understand the regulatory environment and ensure that the Bank maintains an effective relationship with regulators. The process is managed by the Bank’s Compliance Officer..

Enhance higher ATM coverage in the country and newly open the ATM in rural areas. devising competitive moves and market approaches aimed at producing sustainable competitive advantages. building competitively valuable competencies and capabilities. Increasing the earning per share than previous year. Seylan Bank’s long term innovative services provided to customers have reap benefits and yielded results in favor of the bank. Setting objectives to spell out for the company how much of what kind of performance is expected and by when. Having the succession plan through talent management team. Crafting a strategy to achieve the objectives and move the company along the strategic course the management has charted.Highly diversified customers’ portfolio. Offering of high interest rates & additional bonus on minimum deposit amount. infuses the organization with a sense of purposeful action and communicates management’s aspirations to stakeholders.Conclusion In conclusion we can safely say that Seylan Bank has stepped into an new era with its current asset base and further growth could be anticipated. Developing a strategic vision of where the company needs to head and what its future products/ market/ customer/ technology focus. goodwill and adding value to the Brand of Seylan Bank. Improving the access to financial service for customers and clients. Crafting strategy is concerned principally with forming responses to changes in under way in the external environment. Network of branches spread all over the country and provide easy access to entire spectrum of customers. Expanding its reach to rural areas . Objectives need to require a significant amount of organizational stretch. Diversification in their operation in banking including insurance. Enhancing the CSR activities than other competitors and creating a reputation. investment banking assets management and increase the facility for mobile & internet banking. Increasing shareholders funds and earnings. This managerial step provides long term direction. Present unstable market condition increases their profit margin than previous year. 43 . And also Seylan Bank’s core strength is its people who are united to manage and overcome any form of crisis. Bank having a wider product line.

objectives and strategy constitute a strategic plan for coping with industry and competitive conditions. out competing rivals and addressing the challenges and issues that stand as obstacles to the company’s success.By practically crafting a strategy for Seylan Bank PLC we experienced that. a company’s strategic vision. 44 .

 Establish small bank units in school to encourage minors’ savings. Empower disadvantaged group Increase the profitability by accessing international financial market ( bank have only one balancer in Bangladesh for internationally ) Expand their business in product wise using related or unrelated diversification. Delivering higher financial value to its customers & investors. Highly market focused Strategic initiatives such as domestic & international business opportunities. achieve the competitive advantage. Independent identity with a completely new board helps to boost the confidence of management as well as employees.Recommendations In going forward with the Strategic Plan for the next five years below recommendations could be identified and implemented in phases to enhance the capacity of the Bank. Focusing to provide banking services to extend the product portfolio such as introducing services to Small & Medium Enterprises (SME) to encourage the existing entrepreneurs as well as new comer to the industry. 45 .  Improve the existing innovative technologies that already have with the bank such as SMS banking & Phone banking.(minimize the risk)Stronger productivity growth Opportunities to access foreign market .  Expand the banking services in overseas to gain global sales in Asia.  Provide customizable credit cards to different types of account holders according to their preferences.

Available from: www. Annual report (2012) 4. Available from: www.lk 14.cbsl.peoplesbank.hnb.combank. 16th edition.Available from: www. Available from: www.net 10. Strickland A J.Available from: www. Seylan Bank. Annual report (2012) 7.net 13. Peoples’ Bank official website (2012).Available from: www.com 9. Hatton National Bank. Hatton national bank official website (2012). Annual report (2012) 6. Commercial Bank official website (2012).lk 46 . Gamble. Central Bank of Sri Lanka (2012).(2009)Crafting &Executing strategy.lk 11.J.eseylan.boc. Annual report (2012) 3. Peoples Bank. Annual report (2012) 2. Sampath Bank.sampath. Bank of Ceylon official website (2012). Seylan Bank official website (2012). Annual report (2012) 5. Bank of Ceylon.References 1. Commercial Bank.gov. 8. Thompson A.lk 12. Sampath Bank official website (2012). Available from: www.

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