Could you give us some background information of the Bank?
Nations Trust Bank started in mid 1999 taking over the assets and liabilities of a branch of the Overseas Trust Bank of Hong Kong, so it is a relatively young bank. The major shareholders are the largest capitalized company in Sri Lanka, John Keells Holdings and another well-established group, Central Finance Company. CFC is a finance company, which also owns financial services companies and some industries. Both of them have 20% each. I.F.C., which is a subsidiary of the World Bank, has 15% stake and is represented on the Board. Between the three of them they have the controlling interest. Something unusual for a start-up bank is that it was listed right from the beginning with 40% held by over 4000 small shareholders. The focus is on retail and personal banking, though currently the corporate book is much larger.
The market differentiations of the Bank is its technology orientation with all branches on line and central processing which enables branches to be lean and concentrate on marketing. It has multi-channel delivery systems such as normal branches, In-Store branches, ATMs, Debit Cards, Telephone Banking, Internet Banking and Mobile Banking. We introduced the concept of Everyday-Banking with our In-Store branches, which are open for a full range of services, 365 days a year and open till 9.00 p.m. daily. We are of the opinion that such low cost three employee in-store branches are the way to go in the future in banking in Sri Lanka.
What niche are you targeting at for further expansion?
Our niche would be personal banking. Strategic advantages we have - convenience of everyday banking located at places where customers come to shop, rapid expansion of locations owing to low cost small In-Store branches and the technological edge which makes large volumes of transactions economical. There is a tactical advantage at this particular juncture due to the high rates of interest on Govt borrowings. We can offer higher earnings on deposits from repurchases of Government securities compared to fixed deposits of banks. Being a new bank with relatively small savings and fixed deposits, we will not be much affected by our own deposits going into Government securities.
How do you perceive the role of the private sector in Sri Lanka, and particularly from a banking approach?
There has been a rapid development and expansion of the private sector. Today, it is universally accepted that the private sector is the "engine of growth". Correspondingly, the Government sector has been diminishing.
However, the private sector is still confined to the service sector, the plantation and the garment sector and very little in the higher value added manufacturing sector. In addition, overall competitiveness in an international context is poor. Our bank’s role will be as a financier and provider of value added services to the private sector and banking services to the persons employed in the private sector.
With regard to competitions with other banks what other benefits would you have to offer?
I think it is convenience and technology as well as personalized service.
Who would you consider is your biggest competitor at the present time?
In consumer finance, banks like Seylan Bank and Sampath Bank are our competitors. In the credit card business we have HSBC Bank and Hatton National Bank. They are also big and may probably have cheaper products but they do not have the flexibility and consumer orientation that we would have. | Could you provide us with additional information in terms of staff number, number of branches and level of profitability?
The number of staff is one hundred and fifty. Quite lean I must say. We have about ten branches and multi-delivery channels. Our profits are relatively low since we are only one and a half years old and in the investment phase.
What are your major expansion plans?
We don’t intend expanding our larger branches. We hope to open many new In-Store branches, the capital investment of which is about one third the cost of a standard branch. However, they provide all the facilities of a normal branch every day of the year till 9.00 p.m.
With regard to information technology, how much more investment is required in order to stay above competition, would you like to see more resources dedicated to this bank?
This is a field where you could invest unlimited resources, but then you must have a return. We will be investing almost 60% of our total equity in IT. In terms of the total, it is about Rs350Mn, which is not very high but we have been able to get a versatile sophisticated IT package and a low cost.
As a relatively young player in the financial service, what image would you like to project to your local customers?
We would like our customers to perceive us as a Safe, Customer Friendly and Innovative bank not only in terms of technology but also in providing solutions to customers.
We would like to project the image of being adept at finding solutions for customers and tailoring them to their needs. We want to be where the customer is and not make a special trip to a bank. That is the in-store concept.
How would you rate the investment climate in Sri Lanka?
Everyone agrees that the terrorist conflict that has been going on is very unfortunate and is a brake for rapid development. In spite of being one of the first countries in South Asia to have an open economy, we have not gone very far mainly because of this ethnic conflict and it is a major problem with regard to foreign investments flowing in. However, lack of a consistent national strategy and economic plan is the major factor.
What final message would you address to our business readers?
Sri Lanka is I believe one of the user-friendliest countries where foreign investment is concerned. We go out of our way to make it easy. Human resource-wise too we have a large pool of trainable people and good professionals and there won’t be much of a problem in logistics. I would say that this is an investors’ paradise yet to emerge. Do not wait until everything gets settled but to come now, as there are many untapped opportunities. The best time to invest is when there is still some turmoil.
NOTE: World Investment News Ltd cannot be made responsible for the content of unedited transcriptions
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