Balancing growth with integrity and sustainability

At Commercial Bank, responsible financing lies at the core of our sustainability agenda and strategic focus. We recognise that every lending and investment decision we make has significant implications for the society and the environment. Guided by a firm commitment to ethical principles, we ensure that our financial activities not only drive economic growth but also promote positive socio-economic outcomes while minimising environmental impacts.

In 2024, the Bank’s responsible financing efforts were deeply aligned with global and local sustainability frameworks, including the SDGs, the Sustainable Finance Roadmap of the CBSL, and the Sustainable Banking Principles of the Sri Lanka Banks’ Association (SLBA). Beyond regulatory adherence, responsible financing at the Bank represents a deliberate approach to aligning financial growth with the broader goals of sustainable development. Our initiatives throughout the year were built on robust risk management practices, rigorous regulatory compliance, and a steadfast dedication to creating long-term value for all stakeholders.

Strategic capital management and resilience

A foundation for sustainable growth

As a cornerstone of its commitment to responsible financing, the Bank continued to place strategic capital management at the forefront of its sustainability agenda in 2024. With the objective of ensuring resilience, supporting business expansion, and safeguarding stakeholder interests, the Bank undertook robust initiatives to strengthen its financial foundation. These efforts were underpinned by proactive governance frameworks and advanced capital monitoring systems.

Staying well-capitalised

The Bank demonstrated unwavering dedication to maintaining strong capital buffers to support its strategic growth objectives and ensure compliance with regulatory requirements. By adhering to the Capital Augmentation Plan submitted to the CBSL in 2023, the Bank successfully executed two transformative capital-raising initiatives in 2024:

• Basel III compliant debenture issue
  The Bank raised Rs. 20 Bn. through the issuance of Basel III-compliant Tier II capital debentures. This initiative showcased the strong investor confidence in the Bank and boosted its Tier II capital, enhancing long-term financial stability.
• Rights issue to bolster equity capital
  A rights issue raised an impressive Rs. 22.5 Bn., significantly enhancing the Bank’s Tier I capital. This achievement marked the largest equity capital raising initiative by any private-sector bank in Sri Lanka, positioning the Bank as an industry leader in financial resilience.

Together, these initiatives elevated both Tier I and Tier II capital levels well above statutory minimum requirements, creating a solid platform for future growth. Combined with enhanced profitability in 2024 and forward projections, these measures provide significant leeway for the Bank to accommodate its planned expansion for the years ahead.

Regulatory capital ratios Table – 08

As at December 31,	2024	2023
Tier 1 (Minimum Requirement 10.000%)*	14.227	11.442
Total (Minimum Requirement 14.000%)*	18.142	15.151

*For more details, please refer the Annex 2

Building a capital-efficient balance sheet for the future

Strengthening the balance sheet for efficient capital utilisation remains a cornerstone of the Bank’s strategic agenda, reflecting its commitment to fostering growth, resilience, and profitability. While the infusion of debt and equity capital has bolstered the Bank’s financial foundation, enabling it to mitigate risks and sustain operations in volatile market conditions, the Bank continued its efforts to optimise its capital structure. By striking a careful balance between operational stability and stakeholder confidence, these efforts are firmly aligned with global best practices.

As part of its continuous efforts to rebalance the balance sheet towards a more capital-friendly structure, the Bank has prioritised initiatives that align capital allocation with long-term strategic objectives. Rigorous monitoring systems have been implemented to track divisional capital consumption and evaluate the capital requirements of business segments, ensuring the prioritisation of high-impact projects. To further enhance efficiency and ensure that returns are commensurate with risks, the Bank introduced the RAROC (Risk-Adjusted Return on Capital) framework, enabling the monitoring of risk-based returns across various portfolios. This approach ensures that capital is deployed effectively, focusing on both profitability and sustainability.

In tandem with fostering a culture of capital-based decision-making, the Bank has aligned systems and processes to elevate governance standards and deliver cost-effective growth on a priority basis. These strategic actions bolster operational efficiency and reinforce the Bank’s competitive edge in an evolving financial landscape, ensuring value creation for stakeholders and long-term financial stability.

Proactive management of stress on capital

The Bank’s governance framework for capital management was instrumental in identifying and mitigating potential capital stress. By conducting periodic stress tests and scenario analyses, the Bank ensured preparedness for adverse market conditions and external shocks. Recognising the extremely volatile conditions faced by the industry in preceding years, the Bank further widened its stress scenarios and heightened the levels of stress for testing. These refined practices reflect the Bank’s proactive approach to maintaining resilience and adaptability in a rapidly evolving financial landscape.

Resilience as a strategic asset

As the Bank continues to navigate dynamic market conditions, its focus on strategic capital management remains unwavering. By leveraging its enhanced capital position, the Bank is well-poised to drive innovation, expand its lending portfolio, and support underserved sectors of the economy. Furthermore, the Bank’s commitment to responsible financing underscores its role as a catalyst for sustainable development, ensuring that its growth trajectory benefits all stakeholders while aligning with global regulatory frameworks and sustainability goals.

The above achievements reflect the Bank’s financial acumen and also demonstrate its resilience and adaptability qualities that will continue to define its success and sustainability in the years to come.

Optimising financial resources

Strategic management of financial resources

In 2024, the Bank continued to demonstrate financial prudence by optimising its asset and liability management strategies to ensure financial resilience and operational sustainability. The Bank adopted a forward-looking approach to funding and liquidity management, aligning its operations with evolving market conditions and global regulatory standards.

The Bank employs a comprehensive Asset and Liability Management (ALM) framework to optimise the utilisation of financial resources. By maintaining a balanced portfolio of assets and liabilities, the Bank ensures the alignment of maturity profiles, reduces mismatches, and minimises risks associated with interest rate volatility and currency fluctuations. To strengthen this approach, the Bank adopted proactive measures such as the following to enhance financial stability and resilience.

Strengthening funding and liquidity management with ALCO oversight

The Asset and Liability Committee (ALCO) played a pivotal role in driving the Bank’s funding and liquidity management strategies, ensuring resilience amid market volatility. Acting as the central decision-making body for balance sheet optimisation, ALCO guided the Bank’s approach to maintaining optimal liquidity levels, safeguarding financial stability, and mitigating risks associated with market fluctuations.

ALCO’s continuous monitoring of market liquidity allowed the Bank to anticipate funding needs effectively, ensuring that adequate cash reserves were maintained at all times to meet both short-term and long-term obligations without operational disruptions. Additionally, the Committee implemented robust forecasting models to navigate evolving market dynamics, enhancing the Bank’s ability to adapt to external shocks and seize emerging opportunities.

A key priority for ALCO was to maintain a well-diversified funding portfolio, ensuring stability and resilience across various dimensions, including tenor, currency, geography, and ticket size. While the Bank did not require funding from foreign sources in 2024 due to its strong liquidity position, its access to global funding markets remains a significant strategic advantage. This diversification, combined with the ability to tap into international funding avenues when required, enhances the Bank’s financial flexibility, mitigates concentration risks, and positions it to respond effectively to potential future funding needs. These measures collectively reinforce the Bank’s ability to support sustainable growth while maintaining a robust financial structure.

Moreover, ALCO introduced advanced analytics and scenario-based assessments to refine decision-making processes, enabling the Bank to align liquidity management strategies with regulatory requirements and industry best practices. These efforts underscore the Bank’s commitment to proactive financial stewardship, fostering confidence among stakeholders and positioning the institution for sustained success in a dynamic economic landscape.

Managing liquidity risks amidst evolving market conditions

As markets continued to navigate uncertainties, the Bank prioritised robust liquidity risk management practices to safeguard its financial health. These measures included stress testing, scenario analysis, and liquidity buffer maintenance, all of which ensured resilience in challenging conditions. To further strengthen its liquidity management framework, the Bank implemented proactive strategies such as the following:

• Stress testing for contingency planning: The Bank conducted regular stress tests to evaluate its liquidity position under adverse scenarios, ensuring preparedness for potential disruptions.
• Near real-time monitoring: Implementation of the new Treasury System with advanced tools and methodologies facilitated near real-time monitoring of liquidity positions, enabling swift decision-making to address emerging challenges.

Alignment with Basel III norms

The Bank’s liquidity and funding management practices were fully aligned with Basel III norms given below, reflecting its commitment to global best practices in financial risk management.

• Liquidity Coverage Ratio (LCR):
  By maintaining a high-quality liquidity buffer, the Bank consistently achieved LCR compliance, demonstrating its ability to withstand short-term liquidity shocks. LCR for all currencies and Rupee as at December 31, 2024 were 454.36% and 529.20% (516.27% and 491.61% respectively, as at December 31, 2023) compared to the minimum requirement of 100%.
• Net Stable Funding Ratio (NSFR):
  The Bank focused on securing stable funding sources to support its medium- to long-term asset base, ensuring compliance with NSFR requirements. NSFR as at December 31, 2024 was 187.29% (193.70% as at December 31, 2023) compared to the minimum requirement of 100%.

For more details, please refer the Annex 2

Forward momentum in resource optimisation

As the Bank continues to strengthen its financial foundation, optimising financial resources remains a key strategic priority. Central to this effort is the Bank’s robust ALM framework, which is overseen by the ALCO and aligned with international best practices. This framework is further reinforced by the Treasury Middle Office, which continuously monitors market risks, ensuring that the Bank remains agile in responding to dynamic financial conditions.

By maintaining a careful balance between risk, liquidity, and profitability, the Bank’s ALM approach allows it to adapt to evolving market environments while safeguarding its financial stability. This proactive management ensures that the Bank not only meets its immediate financial obligations but also remains well-positioned to capitalise on emerging opportunities. Through effective resource allocation and disciplined oversight, the Bank is able to drive sustainable growth, meet regulatory requirements, and align its operations with long-term strategic objectives, reinforcing its resilience and stakeholder confidence in an increasingly volatile global economy.

To further enhance decision-making and automation within ALM and liquidity management, the Bank has procured several software modules focused on Asset and Liability Management and Liquidity Computation. These tools will empower ALCO to optimise the Balance Sheet more effectively, facilitating automation in liquidity-related computations, increasing computation frequencies, and enhancing near real-time monitoring capabilities. The implementation of these software solutions is currently underway, with live deployment scheduled in the near future.

Enhancing portfolio quality and risk management

Strengthening asset quality for sustainable growth

In 2024, the Bank achieved significant strides in enhancing the quality of its credit portfolio, driven by strategic initiatives and improved macroeconomic conditions. By leveraging advanced risk management tools, conducting rigorous evaluations, and ensuring prudent provisioning, the Bank demonstrated its commitment to sustainable financial performance and stability.

Improving credit portfolio quality through targeted strategies

The Bank has consistently focused on improving the quality of its credit portfolio by employing targeted strategies that address both pre- and post-sanction evaluations, ensuring a proactive approach to risk mitigation and enhanced asset quality, through measures such as;

By integrating these strategies with advanced risk monitoring tools and independent reviews, the Bank has fortified its credit management processes. This proactive approach has enabled the Bank to preserve its asset quality and position the Bank to achieve sustainable growth in an increasingly complex financial landscape, as evidenced by the fact that the gross loans and advances portfolio recorded a 17.49% growth in 2024, compared to the industry average growth of 2.10%.

Prudent impairment provisioning to safeguard asset quality

As part of its prudent risk management strategy, the Bank took proactive measures to enhance impairment provisioning levels, ensuring financial stability and resilience. While asset quality improved notably in 2024, driven by a recovery in economic conditions and a positive shift in the Economic Factor Adjustment, the Bank revised its impairment policy to introduce more stringent measures.

One such revision involved making a 100% provision for facilities in the Non-Performing category for over three years, irrespective of collateral, reflecting the Bank’s commitment to maintaining a sound financial position. These measures resulted in a substantial increase in the Stage 3 provision coverage, which rose to 64.61% from 43.22% in the previous year, while the open credit exposure reduced to 15.06% from 38.69%.

This proactive approach underscores the Bank’s dedication to strengthening its resilience and ensuring that asset quality remains robust amidst evolving market dynamics.

Leveraging predictive analytics for smarter risk assessment

The Bank utilised predictive analytics and advanced data modeling techniques to strengthen its risk assessment and decision-making processes. By leveraging these innovative approaches, the Bank was able to proactively manage credit risk and enhance portfolio quality through the following key measures:

Conducting stress tests and scenario analyses to ensure financial stability

As part of its comprehensive risk management framework, the Bank conducted regular stress tests and scenario analyses to evaluate the resilience of its portfolio under adverse economic conditions. These measures played a crucial role in identifying vulnerabilities and enhancing the Bank’s preparedness for potential financial shocks through the following key approaches:

• Macro-stress testing:
  Simulations based on varying macroeconomic scenarios allowed the Bank to assess the potential impact of external shocks on its financial position.
• Capital adequacy under stress:
  Stress testing results validated the Bank’s ability to maintain adequate capital buffers, ensuring compliance with regulatory standards and instilling stakeholder confidence.
• Scenario planning for risk mitigation:
  Scenario analyses informed the Bank’s contingency planning, enabling it to prepare for and respond effectively to evolving risks.

Outlook for portfolio quality and risk management

The Bank’s strategic focus on enhancing portfolio quality and risk management underpins its vision for sustainable growth. By integrating advanced technologies, adopting rigorous evaluations, and aligning with global best practices, it is well-positioned to navigate the challenges of a dynamic economic environment. These efforts not only reinforce the Bank’s financial stability but also enhance its ability to deliver value to all stakeholders.

Diversification of lending portfolio

Expanding credit horizons for inclusive and sustainable growth

The Bank’s lending portfolio diversification in 2024 reflected its commitment to inclusive and sustainable development. By prioritising key growth sectors, expanding green financing, and leveraging regional opportunities, the Bank ensured that its credit portfolio aligned with national and global priorities while mitigating risk through diversification strategies.

Lending to priority sectors

The Bank remained unwavering in its commitment to supporting socio-economic upliftment by channeling credit towards underserved and high-potential sectors, reinforcing its role as a key enabler of inclusive economic growth.

A core focus of this effort has been empowering SMEs, recognising their vital contribution to job creation, innovation, and national economic resilience. For the past four years, the Bank has maintained its position as Sri Lanka’s largest lender to SMEs, underscoring its sustained dedication to this crucial segment. Through tailored financial solutions, the Bank has enabled SMEs to access working capital, expand infrastructure, and undertake capacity-building initiatives across diverse industries. By prioritising SMEs, the Bank has nurtured entrepreneurship, stimulated innovation, and strengthened economic sustainability.

In addition, the Bank has taken significant steps to promote women entrepreneurs, introducing specialised financing solutions that provide accessible credit and technical support. These initiatives have encouraged female-led businesses, enhanced economic inclusion, and empowered women to contribute meaningfully to the nation’s growth.

Beyond SMEs and women-led businesses, the Bank has extended its outreach through microfinance initiatives, ensuring financial services reach underserved rural communities. By facilitating access to credit and fostering self-reliance, these programs have supported grassroots entrepreneurship, strengthened community development, and uplifted livelihoods in marginalised regions.

Expanding green financing

Aligned with its sustainability agenda, the Bank significantly expanded its green financing efforts to address environmental challenges and promote climate-resilient economic practices. By integrating sustainability into its lending strategy, the Bank facilitated projects that contribute to a low-carbon economy and long-term environmental stewardship.

A key focus of this initiative was financing renewable energy projects, supporting the transition towards clean energy solutions. The Bank provided funding for solar, wind, and hydroelectric projects, empowering businesses and communities to reduce carbon emissions and enhance energy efficiency.

Additionally, the Bank extended credit to sustainable agriculture, enabling farmers and agribusinesses to adopt eco-friendly farming techniques such as organic cultivation and water-efficient practices. By encouraging responsible agricultural methods, the Bank played a role in enhancing food security while minimising environmental impact.

Beyond energy and agriculture, the Bank also supported funding initiatives such as green buildings, and eco-tourism developments. These investments underscored the Bank’s commitment to sustainability across multiple sectors, ensuring economic growth aligns with environmental conservation and climate adaptation.

Sectoral and geographic diversification of credit exposures

To mitigate risks and optimise growth, the Bank pursued a strategic diversification approach across sectors and geographies, ensuring a well-balanced and resilient portfolio.

A key component of this strategy was a sectoral focus, where the Bank diversified into emerging industries such as technology, healthcare, and export-oriented businesses. This expansion enabled the Bank to tap into new growth opportunities while effectively spreading risk across multiple high-potential sectors.

Additionally, the Bank strengthened its regional outreach, expanding its footprint in both urban and rural markets. By doing so, it ensured equitable access to credit, bridged gaps in financial inclusion, and fostered regional economic development.

Cross-border lending and regional expansion

Leveraging its expertise in cross-border financing, the Bank strategically expanded its international footprint, capturing new opportunities and strengthening its regional presence. This initiative enabled the Bank to support businesses and economies beyond national borders while reinforcing its role as a key financial facilitator in the region.

A major focus of this expansion was the Bank’s operations in Bangladesh, the Maldives, and Myanmar, where it provided tailored credit solutions, including trade financing and project loans. These financial solutions played a pivotal role in driving economic development in neighbouring countries, fostering growth across multiple industries.

Additionally, the Bank strengthened cross-border trade support, facilitating seamless trade financing solutions for businesses operating across international markets. By streamlining transactions and offering structured financial assistance, the Bank enhanced client satisfaction while deepening regional economic ties.

Outlook for portfolio diversification

As part of its responsible financing strategy, the Bank’s portfolio diversification initiatives are designed to balance growth with sustainability. By supporting priority sectors, expanding green financing, and pursuing regional opportunities, the Bank ensures long-term value creation for stakeholders while addressing pressing economic and environmental challenges. Reflecting its ambition to diversify further, the Bank established an International Banking Division effective January 01, 2025. This strategic initiative aims to expand the Bank’s footprint from subcontinental to cross-border operations, positioning it as the Sri Lankan bank with the highest international presence. This division will enhance focus and drive business growth in areas such as the Colombo Port City, Dubai International Financial Centre, and cross-border lending opportunities in new territories. Looking ahead, the Bank remains committed to refining its credit strategies to align with evolving market needs and global sustainability goals.

Customer centricity

The Bank places customer centricity at the heart of its Responsible Financing agenda, creating experiences defined by simplicity, transparency, and convenience. The Bank’s commitment is evident in its unwavering focus on understanding and addressing diverse customer needs while fostering meaningful relationships. By maintaining open, transparent communication, the Bank ensures customers are informed about its products, services, and policies, building trust and enabling proactive management of expectations. This transparency is coupled with tailored solutions, including restructuring and rescheduling of loan facilities, specialised account offerings, and segmented services, empowering customers to achieve their financial aspirations.

Customer segmentation: personalised solutions for every need

Customer segmentation remains a cornerstone of the Bank’s strategy, enabling the design of tailored products and services for distinct customer groups. This approach ensures not only the alignment of financial solutions with customer goals but also exceeds expectations. The strategy has necessitated internal enhancements, such as agile processes, to adapt to the evolving needs of its clientele. By leveraging segmentation, the Bank fosters loyalty and engagement while reinforcing the strength of its brand.

Customer segmentation Table – 09

Criteria	High net-worth	Corporate	SME (Small and Medium Enterprises)	Micro customers	Mass market
Income/Size of relationship/ Business turnover/Exposure	Individuals with banking relationships above set thresholds	Exposure> Rs. 250 Mn.	Exposure< Rs. 250 Mn. and annual turnover <Rs. 1 Bn.	Exposure< Rs. 1 Mn.	Individuals not falling into other categories
Price sensitivity	High	High	Moderate	Low	Low
Products of interest	Investment	Transactional, trade finance, and project loans	Development lending, Leasing and project financing, Transactional	Transactional	Transactional
Number of transactions	Low	High	High/Moderate	Low	Low
Level of engagement	High	High	High	Low	Low
Objective	Wealth maximisation	Funding and growth	Funding, growth and advice	Funding and advice	Personal financial needs
Background	Elite business community/ professionals	Rated, large to medium corporates/MNCs	Medium business	Self-employed	Salaried employees
Number of banking relationships	Many	Many	A few	A few	A few
Level of competition from banks	High	High	Moderate	Low	Moderate

Channel mix and target market on perceived customer preference Table – 10

Customer segment	Branches	Internet & Mobile Banking	ATMs/CDMs CRMs	Call centre	Relationship managers	Business promotion officers	Premier banking units
High net-worth
Corporates
SMEs
Micro
Millennials
Mass market

Crafting a customer-centric future

Guided by its vision, mission, and 12 Service Commandments, the Bank introduced a comprehensive Customer Experience (CX) Vision and Service Oath to align employee behaviour with its commitment to delivering exceptional service. Recognising the evolving expectations of customers, the Bank took a transformative step in late 2023 by establishing the Customer Experience Unit, reinforcing its dedication to engagement, seamless service delivery, and customer satisfaction.

Spearheaded by the Chief Manager - Customer Experience, this specialised unit serves as the driving force behind the Bank’s commitment to embedding customer-centricity across all touchpoints. Through structured initiatives and continuous innovation, the Bank is actively reshaping its service culture to enhance customer interactions, optimise service standards, and elevate overall satisfaction levels.

In pursuit of these objectives, the Bank has implemented a series of targeted actions to enrich the customer experience, strengthen relationships, and position itself as a leader in service excellence.

Key actions in 2024

Measuring success:
Customer satisfaction metrics

The Bank’s unwavering commitment to excellence in customer service is validated by outstanding customer satisfaction metrics. In 2022, a comprehensive study conducted by Kantar Research showcased the Bank’s remarkable satisfaction scores. The findings showed the Bank’s superior customer satisfaction scores in all three key customer segments, Retail, Corporate and SME. These metrics highlight the Bank’s customer-centric philosophy, solidifying its position as an industry leader in delivering exceptional banking experiences tailored to diverse customer needs.

Through its strategic focus on passionate service, actionable insights, and the integration of cutting-edge technology, the Bank continues to raise the bar for customer satisfaction. By striving to achieve best-in-class Net Promoter Scores (NPS), it reaffirms its ambition to set new benchmarks in customer experience and establish itself as a service leader in the banking sector.

Customer Experience Performance Statistics Table – 11

	Key Performance Indicators	2024	2023
Contact Centre	Inbound operation voice calls
	Service Level 80% within 20 sec	66%	77%
	Abandoned Rate Less than 5%	7%	6%
	First Call Resolution Rate (FCR)	74%	N/A
Customer experience	Total Net Promoter Score (NPS)
	Maintain above 35	30	N/A

Driving digital transformation for
customer experience

The Bank integrates technology to streamline processes, enhance efficiency, and simplify the customer journey. The upcoming Corporate Banking App exemplifies this effort, offering comprehensive capabilities across lending, deposits, trade, and treasury services. The App aims to address talent shortages through automation, improve operational efficiency, and deliver an intuitive, integrated digital experience for corporate clients. Additionally, the Bank’s broader technology-driven CX initiatives include customer journey automation, QR payment innovations, biometric authentication, and AI-driven chatbots to create seamless, contactless banking experiences.

Continuous innovation in customer experience

Customer experience is at the forefront of the Bank’s operations, focusing on creating seamless and standardised journeys, offering one-stop solutions, and enhancing processes to reduce turnaround times. Regular customer feedback, CRM-driven insights, and personalised promotions help refine services to align with evolving customer preferences. The Bank also prioritises training employees to enhance customer interactions and leverage technology to maintain a customer-first ethos.

By embedding customer centricity into its operations and leveraging cutting-edge digital solutions, the Bank reaffirms its commitment to delivering personalised, transparent, and future-ready financial services. This approach strengthens customer relationships and ensures that the Bank remains a trusted partner in achieving their financial goals in a fast-evolving digital era. Through a blend of technology, customer focus, and innovation, the Bank continues to redefine excellence in customer experience.

Adoption of the Battlecard concept: Strengthening competitive strategy in 2024

Since the beginning of 2024, the Bank adopted the innovative “Battlecard” concept to strategically position the Bank in an increasingly competitive market landscape. Designed to identify market dynamics, competitor offerings, and growth opportunities, the Battlecard acts as a blueprint to enhance the Bank’s market share in deposits and advances.

The Battlecard focused on addressing customer pain points highlighting gaps between competitors and the Bank. Key differentiation areas identified included transitioning to a sales-oriented mindset through centralised operations, automation, and enhanced process-driven approaches.

The competitive analysis mapped key players in the industry - each with unique strengths and weaknesses, which helped the Bank generate invaluable insights that suggested opportunities for differentiation. Leveraging these insights, the Bank has devised strategies to establish itself as the preferred choice for customers.

To drive market differentiation, the Bank introduced three strategic initiatives:

• Wallet share increase:
  Aiming to grow deposits and advances through SME and corporate client-focused funnel management.
• Centralised operations for back-office work:
  Enhancing operational efficiency while fostering a proactive sales culture.
• Customer-centric approach:
  Introducing expedited credit approvals through automation and pre-approved limits for top-tier customers.

With meticulously outlined action plans and clear timelines for seamless execution in 2024, the Bank’s adoption of the Battlecard concept exemplifies its unwavering commitment to growth, operational excellence, and unparalleled customer satisfaction. By focusing on maintaining portfolio quality and bridging market gaps through innovative strategies, the Bank is strategically positioned to drive sustainable growth and adapt to the evolving dynamics of the banking industry. This forward-thinking approach reinforces the Bank’s ability to deliver value while navigating competitive challenges, ensuring resilience and success in an increasingly dynamic financial landscape.

Governance and compliance excellence

Embedding governance for responsible and ethical banking

The Bank maintained its leadership in governance and compliance by implementing robust frameworks designed to uphold ethical banking, ensure regulatory compliance, and foster a culture of accountability. The Bank’s approach to governance excellence reinforced its commitment to transparency, integrity, and the highest ethical standards in all its operations.

Strengthening ESG governance frameworks

To align with its Sustainability Framework, the Bank further enhanced its governance mechanisms to integrate ESG principles into its core business processes. These efforts ensure that sustainability remains a fundamental part of decision-making, risk management, and stakeholder engagement through the following key initiatives:

• ESG integration in decision-making:
  All financing decisions are rigorously evaluated against ESG criteria, ensuring alignment with sustainable and responsible business practices.
• Board-level oversight:
  The Bank’s Board of Directors actively oversees ESG-related initiatives, embedding sustainability considerations into strategic planning and risk management.
• Stakeholder accountability:
  Regular engagement with stakeholders ensures that the Bank’s ESG commitments reflect their expectations while driving sustainable value creation.

Anti-money laundering (AML), Combating financing of terrorism (CFT) and anti-bribery and anti-corruption measures

The Bank remained steadfast in its commitment to preventing financial crimes by continually enhancing its AML and anti-bribery frameworks. Leveraging advanced monitoring technologies, the Bank strengthened its capacity for real-time detection and prevention of suspicious activities, aligning its operations with global AML standards. These robust systems not only enhanced compliance but also fortified stakeholder trust in the Bank’s ethical practices.

A zero-tolerance approach to bribery was at the forefront of the Bank’s strategy. Strict anti-bribery policies were rigorously enforced across all operations, complemented by comprehensive training programs. These programs empowered employees and third-party partners with the knowledge and tools to uphold the highest standards of integrity, ensuring ethical conduct at every level of the organisation.

Number of permanent employees who completed on-line AML e-learning course and obtained the certification – 3,909 (78% of the total permanent employees in Sri Lanka)

Additionally, the Bank maintained a meticulous approach to regulatory reporting. Comprehensive systems and procedures were in place to ensure compliance as well as timely and accurate submission of reports on suspicious transactions to relevant regulatory authorities. The Bank is cognisant of its role and requirements to be prepared, from the perspective of the National Risk Assessment (NRA) that is going to be conducted towards the latter part of 2026. This proactive stance underscored the Bank’s unwavering dedication to compliance, transparency, and the safeguarding of the financial ecosystem from illicit activities. Through these measures, the Bank mitigated risks while reinforcing its reputation as a responsible and vigilant financial institution.

Ethical banking practices and conduct risk management

Ethical banking remains a cornerstone of the Bank’s operational philosophy, supported by comprehensive frameworks to mitigate conduct risk. This commitment ensures that every action taken by the Bank aligns with its core values, fostering trust among stakeholders and reinforcing the Bank’s position as a responsible financial institution.

A robust Code of Ethics serves as the foundation for employee behaviour, ensuring that all decisions and actions are guided by the principles of transparency, responsibility, and ethical behaviour. This framework is further strengthened through regular training and awareness programs, which focus on ethical banking, customer fairness, and conflict of interest prevention. These initiatives empower employees to uphold the highest standards of professional conduct while fostering a culture of accountability and ethical behaviour.

The Conduct Risk Management Policy plays a pivotal role in maintaining an effective risk culture. This Group-wide policy ensures that the Bank engages in fair and ethical practices with customers, employees, and other stakeholders while establishing clear accountability for all actions. By adopting a preventive approach, this Policy enables the Bank to proactively address risks, ensuring that its operations remain ethically sound and aligned with stakeholder expectations.

The IRMD actively oversees and addresses risks that could impact operational integrity, ethical behaviour, or stakeholder trust. Leveraging the principles of the Conduct Risk Management Policy, this team ensures that ethical considerations are deeply integrated into the Bank’s risk management strategy. These efforts collectively reinforce the Bank’s unwavering commitment to ethical behaviour, responsible banking, and robust corporate governance.

Ensuring compliance with regulatory and ESG standards

The Bank consistently meets and exceeds local and international regulatory requirements, reinforcing its position as a model of compliance excellence. Through a structured approach to governance, financial transparency, and sustainability, the Bank ensures adherence to global best practices in the following key areas:

• Basel III and SLFRS compliance:
  The Bank adhered to Basel III capital adequacy standards and Sri Lanka Financial Reporting Standards (SLFRS) ensuring robust financial health and transparency.
• Alignment with ESG standards:
  By aligning its practices with global frameworks such as the SDGs, the Bank demonstrated its commitment to addressing global challenges.
• Periodic audits and assessments:
  Independent audits and compliance assessments ensured adherence to regulatory and ESG standards, reinforcing accountability and operational excellence.

Outlook for governance and compliance

As financial ecosystems become increasingly complex, the Bank remains committed to strengthening its governance frameworks and compliance mechanisms. By embedding ESG principles, mitigating financial crime risks, and fostering ethical banking practices, the Bank continues to uphold its reputation as a trusted and responsible financial institution. Looking ahead, the Bank aims to leverage technological advancements and global best practices to further enhance governance excellence and support sustainable growth.

Climate risk management

Proactively addressing climate-related risks

In recognition of the growing impact of climate change on financial systems, the Bank has prioritised climate risk management as a critical aspect of its governance and operational strategy. By leveraging advanced tools, conducting rigorous stress testing, and addressing the challenges of green financing, the Bank continues to ensure resilience against climate-related uncertainties while supporting sustainable economic growth.

Identifying climate-related risks and opportunities

In line with SLFRS S2: Climate-Related Disclosures and global best practices, the Bank recognises the need to systematically identify and assess the financial implications of Climate-Related Risks and Opportunities (CRROs). Understanding these factors is critical for ensuring the Bank’s long-term resilience and enabling strategic decision-making in a rapidly evolving economic and regulatory landscape.

The Bank has conducted an analysis of both physical risks (e.g., risks arising from extreme weather events and changing climate patterns) and transition risks (e.g., risks associated with the shift to a low-carbon economy). Simultaneously, the Bank has identified climate-related opportunities that align with its strategy to support sustainable economic growth and promote a greener financial ecosystem.

This proactive approach enables the Bank to embed climate considerations into its risk management frameworks, lending practices, and investment strategies. It also provides the foundation for climate stress testing and scenario analysis, ensuring that the Bank remains well-prepared to navigate future climate-related uncertainties while capitalising on sustainable opportunities.

CRROs identified in relation to the Bank are given in Risk Governance and Management section on pages 254 to 284.

Mitigating green financing risks

While the Bank continues to expand its green financing portfolio, it acknowledges the inherent risks associated with this segment, including regulatory inconsistencies and market challenges. To address these
risks and ensure the sustainability and viability of its green financing initiatives, the Bank has implemented the following strategic measures:

• Addressing regulatory gaps:
  The Bank actively engages with regulators and policymakers to align its green financing practices with national and international sustainability guidelines, ensuring clarity and consistency.
• Due diligence in green projects:
  Comprehensive due diligence processes assess the technical, environmental, and financial viability of green projects, reducing the risk of under performance or non-compliance.
• Diversifying green financing portfolio:
  The Bank’s green financing initiatives span multiple sectors, including renewable energy, energy efficiency, and climate-resilient agriculture, minimising concentration risk.

Way forward for climate risk management

As the global climate risk landscape continues to evolve, the Bank is resolute in its commitment to enhancing risk management capabilities and integrating climate considerations into all aspects of its operations. Recognising the critical need for proactive measures, the Bank has outlined a strategic pathway for addressing CRROs.

Key focus areas for the future include:

• Expanding predictive analytics:
  Leveraging advanced predictive analytics tools to identify emerging climate risks and assess their potential impact on operations, portfolios, and stakeholder interests.
• Enhancing stakeholder engagement:
  Strengthening collaboration with regulators, industry peers, and other stakeholders to address gaps in climate related regulations and frameworks, ensuring alignment with international best practices and local requirements.
• Investing in innovative tools and technologies:
  Continuing investments in advanced tools and technologies that enhance the Bank’s ability to monitor, assess, and mitigate climate risks effectively.
• Advancing financed emissions calculations:
  The Bank signed a Memorandum of Understanding (MOU) with Partnership for Carbon Accounting Financials (PCAF) to become an official signatory, demonstrating its commitment to robust carbon accounting practices.

By embedding climate risk management into its governance frameworks and decision-making processes, the Bank reaffirms its position as a sustainable financial institution. The Bank’s forward-thinking approach prioritises resilience, accountability, and long-term value creation, ensuring its ability to navigate the complexities of a changing climate while fostering sustainable growth. In 2025, the Bank will actively work on formulating detailed scorecards to assess climate-related risks within the ICAAP framework, specifically focusing on its lending portfolio, and developing processes to extract and interpret climate risk data for financial disclosures in alignment with SLFRS S1 and S2. These targeted initiatives further reinforce the Bank’s commitment to integrating climate considerations into its operations, enabling informed decision-making and transparent reporting to stakeholders.

The Group Environmental and Social Risk Management Policy

The Bank has implemented a Group Environmental and Social Risk Management Policy that provides a comprehensive framework for managing environmental and social (E&S) risks across its operations. This policy covers E&S risk management within the Bank’s internal operations, ensuring responsible corporate practices, as well as E&S risk management in lending, integrating sustainability considerations into the Bank’s credit decision-making process. By aligning with international best practices, the policy reinforces our commitment to responsible banking and sustainable finance.

The full policy is available on the Bank’s website and can be accessed at https://www.combank.lk/info/file/272/group-environmental-and-social-risk-management-policy

Environmental and social management System

Integrating sustainability into lending practices

The Bank has established a comprehensive Environmental and Social Management System (ESMS) to ensure that all lending practices align with its commitment to sustainability. By embedding ESMS into its operations, the Bank safeguards social and environmental outcomes while promoting responsible business practices.

The ESMS has been developed based on the IFC Performance Standards, a globally recognised framework for managing E&S risks in private sector projects. These standards guide businesses and financial institutions in identifying, assessing, and mitigating E&S risks, fostering responsible and sustainable financing. The framework comprises eight key standards, addressing areas such as risk management, labour rights, resource efficiency, community health, safety, and security, land acquisition, biodiversity conservation, indigenous peoples' rights, and cultural heritage. Widely adopted by banks, investors, and development institutions, these standards ensure alignment with international sustainability frameworks, including the Equator Principles and the SDGs.

Embedding ESMS in lending practices

The Bank has embedded ESMS as a fundamental component of its risk evaluation and lending processes, ensuring that all financed projects adhere to stringent sustainability criteria. By integrating ESMS into its decision-making framework, the Bank enhances responsible lending while aligning with global sustainability goals through the following key measures:

Monitoring and reporting social and environmental outcomes

The Bank’s ESMS framework prioritises continuous monitoring and transparent reporting to ensure accountability and measurable impact. Through a structured approach to data collection and stakeholder engagement, the Bank enhances its ability to assess and communicate the effectiveness of its sustainability initiatives through the following key measures:

• Outcome monitoring:
  Regular audits and evaluations are conducted to track the social and environmental performance of funded projects, ensuring adherence to agreed upon sustainability goals.
• Impact metrics:
  The Bank employs key metrics, such as carbon emissions reduction, reduction in landfill, job creation, and community development, to measure the positive outcomes of its ESMS-aligned projects.
• Transparent reporting:
  Comprehensive reporting on ESMS performance is shared with stakeholders, reinforcing the Bank’s accountability and commitment to transparency.

Enhancing ESMS capabilities

The Bank is committed to continually refining its ESMS framework to address emerging sustainability challenges and opportunities, through many activities, inter alia the following:

• Capacity building:
  Regular training programs equip employees with the skills to evaluate and monitor social and environmental risks effectively.
• Technology integration:
  Advanced digital tools, such as environmental risk assessment software and predictive analytics, are incorporated into ESMS processes for enhanced accuracy and efficiency.
• Partnerships for sustainability:
  Collaborations with international organisations and local regulators strengthen the Bank’s ESMS framework and expand its sustainability expertise.

Medium to long-term vision for ESMS

The Bank has seamlessly embedded ESMS into its lending practices to ensure its financial activities contribute to sustainable development while mitigating adverse social and environmental impacts. The Bank is committed to scaling the impact of ESMS by broadening its application across all lending portfolios, prioritising high-sustainability projects such as renewable energy and social infrastructure development.

The Group has implemented a robust strategy to avoid financing activities that pose E&S risks, ensuring responsible banking practices and compliance with regulatory frameworks. As part of this approach, the Group strictly adheres to a pre-identified list of banned or illegal practices, outlined in Annex I: “Banned/Illegal List” in the Group E&S Risk Management Policy, which prevents engagement in activities that could be harmful or non-compliant with regulations. Additionally, while certain project types or activities listed in the E&S Negative List (Annex I) may be legally permissible, they carry the potential for significant environmental degradation or social conflict. Given the Group’s low risk appetite for such activities, lending to these projects is restricted whenever possible. Furthermore, the Bank’s operations in Bangladesh adhere to additional sectoral exclusions, as stipulated in the “Exclusion List” of the “Guidelines on Environmental and Social Risk Management (ESRM) for Banks and Financial Institutions in Bangladesh (June 2022)”, reinforcing the Group’s commitment to sustainable and responsible financing.

By fostering a culture of sustainability among its clients, ESMS actively encourages the adoption of environmentally and socially responsible business models, reinforcing shared accountability. Moreover, the Bank aligns ESMS objectives with global frameworks, including the SDGs, as part of its medium to long-term strategy. Through this integration, the Bank demonstrates its leadership in sustainable banking, proving that financial growth and sustainability are mutually reinforcing goals. These efforts underscore the Bank’s commitment to a resilient, inclusive, and environmentally conscious future for all stakeholders.

Support for struggling businesses

The Bank recognises the critical role struggling businesses, particularly SMEs, play in the economy and has implemented a dedicated approach to support their revival and long-term sustainability. In 2024, the Bank focused on assisting businesses facing financial challenges through specialised interventions and responsive strategies.

Business Revival and Rehabilitation Unit

The Business Revival and Rehabilitation Unit (BRRU) exemplifies the Bank’s proactive approach to supporting distressed businesses in overcoming financial challenges and regaining stability. Formally established in July 2024, the BRRU has been instrumental in working closely with SMEs, identifying their unique pain points, and developing customised solutions to effectively alleviate financial distress.

Dedicated teams of financial advisors played a critical role, offering guidance on operational restructuring, cash flow optimisation, and market repositioning, ensuring businesses could achieve sustainable recovery. Recognising the need for additional financial support, the Bank also provided supplementary funding on a need basis, helping businesses navigate challenging circumstances more effectively.

Additionally, the BRRU focused on preventive measures, leveraging early warning systems to detect signs of financial strain and implementing timely interventions to safeguard businesses from potential insolvency. By the end of 2024, the unit had extended support to 65 borrowers, reinforcing the Bank’s commitment to being a trusted partner for businesses.

Restructuring and rescheduling loan facilities

The Bank acknowledged the pressing liquidity challenges faced by businesses and extended flexible loan restructuring and rescheduling options to support them in overcoming financial difficulties. Borrowers were given the opportunity to restructure their existing loans, allowing adjustments such as extended repayment periods and revised interest rates. These interventions effectively alleviated immediate financial pressures, giving businesses the breathing space needed for recovery.

To further support enterprises experiencing temporary cash flow constraints, the Bank rescheduled payment plans, enabling businesses to meet financial obligations without compromising operational continuity. Additionally, the Bank provided concessional terms to struggling SMEs, including reduced interest rates and tailored repayment structures, ensuring that they could focus on rebuilding and strengthening their businesses.

Despite the CBSL requiring the banks to classify such restructured facilities under Stage 2 or 3, which necessitates higher impairment provisions, the Bank strategically accommodated these businesses as a trade-off, prioritising long-term economic stability and business continuity over immediate financial impact.

Future outlook

Looking to the future, the Bank is poised to expand the scope of its BRRU by incorporating additional advisory resources and deploying advanced digital tools to enhance the efficiency and effectiveness of business recovery plans. The Bank also plans to deepen its collaboration with government agencies, industry associations, and NGOs to deliver a more holistic support ecosystem tailored to the unique challenges of struggling businesses. Additionally, efforts will focus on developing a comprehensive impact assessment framework to monitor recovery outcomes, measure the success of interventions, and refine strategies for maximum impact.

Cost optimisation and efficiency

Driving operational excellence through strategic cost management

The Bank continues to uphold its commitment to enhancing operational efficiency and cost-effectiveness. The establishment of robust frameworks and targeted initiatives such as business process re-engineering ensures that resources are optimised, and cost savings are reinvested into strategic growth and sustainability programs.

Cost Optimisation Committee: Enhancing decision-making and accountability

To streamline costs while maintaining high service quality, the Bank has empowered a dedicated Cost Optimisation Committee to oversee cost management and operational efficiency strategies. This Committee, comprising corporate and senior management representatives, evaluates expense patterns and identifies opportunities for cost savings across all divisions, ensuring focused governance and accountability. Through strategic measures, the Committee has implemented recommendations that have led to significant reductions in non-essential expenditures without compromising service delivery standards. Importantly, the cost savings achieved are systematically reinvested into innovation and sustainability projects, reinforcing the Bank’s commitment to long-term value creation for its stakeholders.

The efforts of the Committee led to significant cost savings during the year, primarily on account of energy, utility services, security, stationery, software licensing etc.

Improving operational efficiency in financing processes

The Bank has adopted modern tools and innovative approaches to improve the efficiency of its financing processes, ensuring greater speed and cost-effectiveness. These strategic enhancements streamline operations, reduce turnaround times (TAT), and optimise resource utilisation through the following key initiatives:

• Automation and digitisation:
  Automation of workflows, including credit approvals, document management, and loan processing, has significantly reduced TAT and operational costs.
• Streamlined decision-making:
  By leveraging advanced data analytics and predictive modeling, the Bank ensures quick and accurate credit risk assessments, minimising redundant steps and inefficiencies.
• Lean banking practices:
  Initiatives such as paperless transactions and centralised operational hubs have contributed to a leaner and more agile banking model, reducing waste and redundancies.

Continuous monitoring and optimisation

Cost efficiency at the Bank is viewed as an ongoing journey, underpinned by regular reviews to ensure alignment with organisational objectives. Performance metrics related to cost efficiency are seamlessly integrated into key performance indicators (KPIs) for all departments, fostering a culture of accountability and continuous improvement. Employee engagement plays a pivotal role, with staff encouraged to contribute ideas for enhancing efficiency through reward-based programs, thereby driving participation and innovation. Additionally, the Bank employs benchmarking practices to compare its operational performance with industry standards, ensuring its efficiency measures align with global best practices and remain relevant in a dynamic financial environment.

Way forward for cost optimisation

To sustain its leadership in operational efficiency, the Bank aims to expand its cost optimisation initiatives, focusing on:

• AI-driven efficiency solutions:
  Implementing AI and machine learning tools to predict cost-saving opportunities and continuing to further automate routine tasks.
• Green banking initiatives:
  Investing in energy-efficient technologies

Bridging gaps and driving inclusive growth

At the Bank, financial inclusion stands as a cornerstone of our sustainable banking strategy, reflecting our unwavering commitment to making financial services accessible, affordable, and equitable for all. Recognising that access to financial services is a key enabler of socio-economic development, we place special emphasis on underserved communities, including women entrepreneurs, rural populations, and SMEs. By focusing on these segments, we strive to bridge the financial gap and foster inclusive economic growth across Sri Lanka and beyond.

In 2024, the Bank advanced its financial inclusion agenda through a series of targeted initiatives designed to empower marginalised groups and drive financial literacy. Our approach involved offering tailored financial products, enhancing service accessibility through digital and branch networks, and promoting financial education to enable better financial decision-making. These efforts were aligned with national priorities and global standards, underscoring our commitment to equitable and sustainable growth.

The Bank’s ongoing focus on financial inclusion not only supports national development objectives but also strengthens our role as a trusted financial partner in communities that have historically been excluded from mainstream financial systems. Through collaborative partnerships and innovative solutions, we continue to deliver meaningful impact, ensuring that no one is left behind on the path to economic progress.

Expanding access to banking

The Bank’s commitment to financial inclusion underscores its role in bridging the socio-economic divide and fostering equitable growth. In 2024, the Bank intensified its efforts to expand access to banking for underserved and rural communities through strategic initiatives, innovative technologies, and inclusive practices.

Our network of delivery points

Figures 25 and 26 given on pages 102 and 103 illustrate the Bank’s branch network, showcasing its reach across Sri Lanka and Bangladesh as a testament to its commitment to driving customer engagement and delivering value to stakeholders. In Sri Lanka, this expansive network provides unmatched accessibility, ensuring that customers from urban centers to remote regions can benefit from the Bank’s comprehensive suite of products and services. While the expansion of physical branches has slowed in recent years due to the increasing adoption of digital banking channels, the Bank strategically opened only one branch in 2024 in Puthukkudiyiruppu to enhance its presence while five branches were relocated for greater customer convenience. The wide branch presence complemented by an extensive map of ATMs and digital channels, facilitates financial inclusion, offering convenience to underserved communities and supporting local economies.

By leveraging this robust network, the Bank also enhances its ability to provide personalised customer service, strengthen relationships, and deliver tailored financial solutions. At a time when financial service channels are increasingly shifting to digital platforms, the branch network provides an essential balance by offering a personal touch that fosters trust, understanding, and human connection. This extensive reach positions the Bank as a key enabler of financial empowerment and growth for its customers across both countries.

Looking ahead to 2025, the Bank plans to introduce an innovative business model designed to address geographical disparities in banking access. This model will enable real-time banking services for residents in isolated regions, further reinforcing the Bank’s commitment to financial inclusion and accessibility.

Expanding mobile and digital banking solutions

Leveraging technology to overcome barriers to traditional banking, the Bank continued to innovate its digital solutions to enhance financial accessibility and inclusion, particularly for underserved communities. By introducing user-friendly mobile platforms and expanding digital banking services, the Bank significantly improved outreach and convenience through the following key initiatives:

• Mobile banking for rural communities:
  The Bank’s mobile banking platform, equipped with simplified interfaces and multilingual capabilities, has revolutionised financial accessibility for rural populations.
• Digital account opening:
  Introducing digital account opening processes allowed rural customers to establish bank accounts seamlessly without traveling to urban branches. This initiative greatly increased financial inclusion for unbanked individuals.
• Integration of payment systems:
  QR-based payment systems, and contactless transactions were promoted to rural SMEs and entrepreneurs, enabling smoother financial operations for small businesses.
• Expanded Payment Accessibility on Q+ Payment App:
  In 2024, the Q+ Payment App enabled Non ComBank accounts as a payment option, expanding access beyond ComBank-issued cards, allowing all Sri Lankans with a bank account to use the app for payments.

Ensuring inclusivity through trilingual communication

To ensure a more inclusive and accessible banking experience, the Bank placed significant emphasis on linguistic and cultural inclusivity. Recognising Sri Lanka’s diverse communities, customer service centers and contact platforms were equipped to provide seamless support in Sinhala, Tamil, and English, fostering effective communication for all customers. The Bank further enhanced its online and mobile banking platforms (ComBank Digital, Flash, Q+, ePassBook, WhatsApp Banking and Viber Banking) with user-friendly trilingual interfaces, ensuring that navigation was intuitive and accessible to individuals across different demographic groups. Complementing these efforts, the Bank conducted educational campaigns in all three languages to raise awareness about the benefits and usage of digital banking tools. These campaigns aimed to improve financial literacy, build trust in digital banking, and empower communities to embrace modern banking technologies. This approach underscores the Bank’s commitment to inclusivity and accessibility in its services.

Network of delivery points in Sri Lanka and Bangladesh

Driving long-term financial inclusion

The Bank’s efforts to expand access to banking services are complemented by a strong focus on fostering sustainable development across diverse communities. During the year, the Bank conducted a number of awareness sessions among the farmer communities in this regard. These programs empowered individuals to make informed financial decisions, promoting a culture of financial independence and security.

Recognising the transformative role of women in economic growth, the Bank also implemented targeted programs to promote women’s access to banking. These initiatives introduced dedicated loan products and tailored savings schemes to address the unique financial needs of women, enabling them to participate actively in the formal financial system and build resilience.

To support entrepreneurial growth, the Bank focused on integrating micro and SME-specific products with digital accessibility. By doing so, the Bank provided small-scale entrepreneurs with seamless access to broader financial ecosystems, helping them secure capital, scale their operations, and connect with new markets. These initiatives reflect the Bank’s commitment to building inclusive financial solutions that not only broaden access but also drive economic empowerment and long-term community development.

Way forward

In 2024, the Bank’s initiatives to expand access to banking positively impacted many individuals, many of whom accessed formal financial systems for the first time. Looking ahead, the Bank remains steadfast in its mission to close the financial accessibility gap, prioritising underserved and marginalised communities in its strategic plans.

The Bank is developing an inclusive strategy specifically designed to support differently-abled and marginalised communities, ensuring that no segment of society is left behind in its financial inclusion agenda. Additionally, the planned expansion of Agricultural and Micro Financing Units, coupled with the increased deployment of the “Bank on Wheels” program, will further extend the Bank’s reach to underserved areas, enabling individuals in remote and rural areas to access essential financial services conveniently.

By combining branch expansions, innovative digital solutions, targeted outreach, and inclusive practices, the Bank continues to drive financial inclusion agenda, ensuring that economic empowerment becomes a reality for all citizens. These forward-looking initiatives reinforce the Bank’s position as a leader in fostering inclusive growth and creating a more equitable financial ecosystem.

Empowering SMEs and entrepreneurs

Recognising the vital role SMEs play in fostering economic growth and job creation, the Bank has made empowering SMEs and entrepreneurs a cornerstone of its financial inclusion strategy. In 2024, the Bank enhanced its focus on providing financial and non-financial support, ensuring SMEs and entrepreneurs thrive in an evolving economic landscape.

Tailored SME financing and faster loan approval processes

The Bank introduced several innovative financial solutions and streamlined processes to meet the unique needs of SMEs, which include the following:

• Customised financial products:
  Tailored loan products designed for SMEs across various sectors were launched, offering flexible repayment terms and attractive interest rates. Special emphasis was placed on financing women entrepreneurs and businesses in underserved areas.
• Fast-track loan approvals:
  The Bank improved its loan approval mechanisms, leveraging digital tools and simplified documentation requirements to ensure quicker credit disbursement.
• Sector-specific financing:
  Recognising sector-specific challenges, the Bank extended targeted financing for agriculture, manufacturing, and service oriented businesses, enabling them to modernise operations and improve competitiveness.
• Support during challenges:
  SME clients affected by external economic shocks were provided with loan restructuring, moratorium options and revival & rehabilitation support (please refer section on “Support for Struggling Businesses”), helping them regain stability and sustain operations.

	Number of loans		Loan value (Rs. Mn.)
Year/Sector	2023	2022	2023	2022
Agriculture	2,628	3,470	7,400	19,890
Services	7,560	4,254	58,809	29,040
Industries	42,003	7,531	144,322	49,068
Other	3,378	41,060	21,123	137,101
Total	55,569	56,315	231,655	235,099

Source: Annual Report 2023 – Ministry of Finance Sri Lanka

Capacity-building programs

To complement financial assistance, the Bank conducted extensive capacity-building programs aimed at improving the business acumen and operational capabilities of SMEs, inter alia the following:

• Workshops on business management and financial literacy:
  In collaboration with industry experts, the Bank hosted workshops focusing on cash flow management, marketing strategies, digital tools, and export-readiness. Over 150 entrepreneurs benefited from these sessions in 2024.
• Training on sustainability practices:
  SMEs were introduced to sustainable business practices, including energy efficiency and waste reduction strategies, enabling them to align with global ESG standards.
• Advisory services:
  The Bank offered one-on-one mentorship for entrepreneurs, providing guidance on scaling operations, leveraging digital tools, and expanding market reach. These advisory sessions empowered businesses to navigate challenges and seize opportunities effectively.

Facilitating networking through ComBank BIZ Club and ComLEAP

Recognising the crucial role of collaboration and knowledge-sharing in entrepreneurial success, the Bank established dedicated platforms to empower and connect entrepreneurs through meaningful networking opportunities and educational resources. Among these initiatives, the ComBank BIZ Club emerged as a flagship platform designed to bring together SMEs, industry leaders, and financial experts. This collaborative forum facilitated the exchange of insights, the exploration of partnerships, and access to new market opportunities. In 2024, the BIZ Club hosted 06 impactful events that addressed key business topics, including e-commerce, digital marketing strategies, and navigating the complexities of international trade. These events not only equipped entrepreneurs with actionable knowledge but also created avenues for building strategic alliances.

Complementing its in-person initiatives, the Bank introduced ComLEAP – an innovative online business ecosystem developed in partnership with GlobalLinker. In a landmark move for Sri Lanka’s banking sector, the Bank launched the “Commercial Bank LEAP GlobalLinker” in 2023, offering a suite of services completely free of charge. This cutting-edge digital platform is designed to amplify the global presence of Micro and Small & Medium Enterprises (MSMEs) by connecting them to markets in over 150 countries. This platform focuses on fostering cross-border collaborations and unlocking new opportunities. By end of 2024, it had onboarded more than 13,000 users, including prominent manufacturers, exporters, and women-led enterprises across the nation, solidifying its role in democratising global market access for MSMEs while fostering sustainable economic growth.

The platform has further strengthened its role in the business community by enabling over 90 entities to share their business tips, business articles, and success stories, creating a ripple effect of inspiration and collaboration. To maximise the platform’s outreach, the Bank’s dedicated SME teams have engaged in extensive customer acquisition activities, organising events in partnership with government institutions, chambers of commerce, and other organisations to showcase the platform’s unique value proposition.

What sets the Com LEAP apart is its advanced suite of features, including e-stores, digital catalogues, and enhanced online presence capabilities. These tools create a dynamic environment for businesses to thrive in an interconnected global market. As the platform continues to evolve, plans are underway to onboard more partners and enhance its features to meet the changing needs of businesses.

The IFC has been instrumental in providing advisory support for the successful implementation of this transformative initiative, which represents a major milestone in Sri Lanka’s digital banking landscape. The Bank has also hosted webinars and structured entrepreneurial skill development programs in collaboration with the IFC, further emphasising its commitment to advancing digital solutions and promoting economic empowerment.

Additionally, the Bank amplified market access for SMEs by organising trade fairs and networking events, which provided entrepreneurs with direct introductions to larger markets, distributors, and buyers. These events significantly enhanced the visibility of small businesses, helping them to expand their customer base and increase sales opportunities. By integrating education, networking, and market linkage opportunities, these initiatives underscore the Bank’s commitment to fostering a vibrant and sustainable entrepreneurial ecosystem.

Driving long-term growth and resilience

The Bank’s initiatives for SMEs and entrepreneurs are strategically tailored to nurture long-term resilience and sustainable growth in the business ecosystem. Recognising the critical role of women entrepreneurs, the Bank implemented dedicated programs in 2024 that combined financial support with expert mentoring, empowering women-led businesses and advancing gender equality in the entrepreneurial landscape. To enhance operational efficiency and market reach, SMEs were encouraged to adopt cutting-edge technology, including digital payment solutions and e-commerce platforms, enabling them to streamline operations and access wider customer bases. Furthermore, the Bank introduced green financing options, designed to promote eco-friendly practices among SMEs. This initiative supported businesses in becoming more climate-resilient and highlighted the profitability of sustainable practices, aligning business success with environmental responsibility. Through these multifaceted approaches, the Bank continues to champion innovation and inclusivity, fostering a robust and equitable business environment.

Impact and vision for SMEs

In 2024, the Bank’s SME-focused initiatives positively impacted over 8,700 businesses, driving job creation, community development, and economic inclusion. As the Bank charts its course for the future, it remains deeply committed to empowering SMEs to energise economic growth. Plans are underway to adopt a data-driven approach to strategically onboard SMEs and enhance wallet share, leveraging analytics to identify opportunities and tailor solutions. Expanding outreach through supply chain and dealer financing will play a pivotal role in capturing untapped markets and fostering stronger partnerships.

To align with national development priorities, the Bank will prioritise lending to agricultural and manufacturing sectors, recognising their potential to stimulate economic transformation. Additionally, new product offerings and capacity-building tools are being developed to address the evolving needs of SMEs, ensuring access to financial and technical resources that empower entrepreneurs to thrive.

Through these initiatives, the Bank reinforces its vision of fostering a resilient SME ecosystem that contributes to sustainable development. By embracing innovation, expanding reach, and focusing on impactful sectors, the Bank aims to create lasting value, supporting entrepreneurs to drive progress and build a more inclusive and robust economy.

Supporting microfinance and marginalised communities

The Bank’s unwavering commitment to financial inclusion extends to microfinance and underserved segments of the society, aiming to bridge socio-economic disparities and empower vulnerable communities. In 2024, the Bank deepened its focus on providing tailored financial solutions and collaborating with trusted partners to drive inclusive growth.

Providing microfinance for small-scale farmers and rural businesses

Recognising the indispensable contributions of small-scale farmers and rural enterprises to economic progress, the Bank has developed tailored microfinance programs aimed at empowering these critical sectors. By introducing low-interest microfinance loans, the Bank provided affordable credit facilities specifically designed to meet the needs of farmers, artisans, and rural entrepreneurs. These have facilitated investments in modern farming equipment, seeds, fertilisers, and other essential resources, driving significant improvements in productivity and output. Additionally, the Bank extended financing solutions to rural businesses, enabling them to expand their operations, upgrade infrastructure, and generate local employment opportunities, thereby fostering economic vitality in underserved regions. To further ensure inclusivity, the Bank simplified loan application processes and reduced documentation requirements, breaking down barriers to credit access for marginalised groups. Through these initiatives, the Bank underscores its commitment to promoting rural economic development and empowering communities for sustainable growth.

The initiative focuses on:

• Advanced techniques
• Skills development
• Financial inclusion
• Market access
• Sustainability
• Community support

Targeted financial inclusion initiatives for women, youth, and low-income households

The Bank remains resolute in addressing the distinct needs of marginalised groups, including women entrepreneurs, young professionals, and low-income households, through a range of targeted initiatives. Recognising the pivotal role of women in economic development, the Bank offered microfinance loans to support women-led businesses in areas such as cottage industries, retail, and agriculture. In 2024, these efforts empowered over 15,000 women entrepreneurs, equipping them with financial assistance and capacity-building programs to ensure sustained growth and success.

In its drive to inspire the next generation of innovators, the Bank launched youth empowerment programs featuring specialised loans and mentorship opportunities. These initiatives enabled young professionals to establish startups and venture into cutting-edge industries, fostering entrepreneurial spirit and economic diversification.

Further advancing its commitment to inclusivity, the Bank introduced financial solutions tailored to low-income households. Flexible repayment terms and micro-savings accounts were designed to provide these families with financial stability and long-term inclusion, cultivating a culture of saving and investment across underserved regions. Through these comprehensive efforts, the Bank continues to champion empowerment and equity, building stronger, more inclusive communities.

Collaborating for holistic microfinance solutions

Strategic partnerships have played a crucial role in amplifying the impact of the Bank’s microfinance initiatives, enabling comprehensive and sustainable community development. A notable collaboration with Sarvodaya has facilitated the implementation of holistic microfinance programs that seamlessly combine financial assistance with social and community support. This partnership has driven impactful projects, such as the development of childcare centers and the organisation of training programs, ensuring the upliftment of communities through both economic and social interventions.

To further empower borrowers, partner organisations have conducted capacity-building workshops aimed at enhancing financial literacy, teaching effective fund utilisation, and promoting sustainable farming practices. These sessions equip participants with the necessary skills and knowledge to maximise the benefits of microfinance opportunities, ensuring long-term self-reliance and growth.

Additionally, the Bank’s collaborations with grassroots organisations have enabled community-led initiatives that address region-specific challenges. By leveraging local expertise and knowledge, the Bank has ensured that its microfinance solutions are tailored to the unique needs of different communities, creating meaningful and impactful outcomes that contribute to regional and national development. Through these strategic alliances, the Bank continues to solidify its commitment to fostering resilience and prosperity among underserved populations.

Impact and vision for microfinance and agriculture

In 2024, the Bank’s microfinance initiatives empowered over 2,700 farmers and small-scale entrepreneurs, transforming livelihoods and reducing financial vulnerability in underserved communities. Building on this impact, the Bank envisions scaling its efforts to achieve even greater outreach and inclusivity. Plans include expanding the penetration of microfinance solutions into remote and underserved regions to ensure broader access. The Bank also aims to innovate its product offerings by introducing microinsurance and savings-linked loan products, which will provide borrowers with added layers of financial security. Furthermore, the Bank intends to strengthen collaborations with NGOs, government bodies, and development organisations, fostering partnerships that deliver integrated financial and social solutions.

This initiative is backed by Agriculture & Micro Finance Units (AMFUs) nationwide. During the year under review, the Bank expanded the number of AMF Units from 19 to 35, with a strategic plan to further increase this to 100 Units. This expansion aims to strengthen financial and advisory support for farmers and small businesses, ensuring broader access to essential resources and guidance.

By championing microfinance and addressing the unique needs of marginalised groups, the Bank remains committed to creating pathways for socio-economic empowerment and sustainable growth, reinforcing its position as a transformative force for positive change.

Women’s empowerment

The Bank remains steadfast in its commitment to empowering women as critical drivers of economic and social development. Through specialised financial products, skill enhancement programs, and networking opportunities, the Bank has enabled countless women entrepreneurs to achieve economic independence and contribute meaningfully to their communities.

Specialised loans for women-led businesses with concessional rates

To address the unique financial challenges faced by women entrepreneurs, the Bank offers tailored loan products designed to foster business growth and financial stability. These include:

• Concessional interest rates:
  Women-led businesses are eligible for loans at preferential rates, reducing the financial burden and enabling easier access to capital for business expansion and operational needs.
• Flexible repayment terms:
  Recognising the diverse financial circumstances of women entrepreneurs, the Bank has introduced flexible repayment structures, ensuring affordability and long term sustainability.
• Dedicated support services:
  Through its customer support teams, the Bank provides advisory services to help women navigate financial decisions and utilise funds effectively.

Skill development programs

Recognising that financial support alone cannot ensure long-term success, the Bank actively invests in the holistic development of women entrepreneurs by enhancing their skills and knowledge. Tailored workshops are designed to improve business and financial literacy, focusing on essential areas such as bookkeeping, cash flow management, marketing, and strategic planning. Additionally, the Bank organises sector-specific skill enhancement programs that equip women with the technical expertise needed to thrive in industries such as agriculture, retail, and handicrafts, enabling them to build competitive and resilient businesses. Through capacity-building initiatives, the Bank partners with NGOs and industry experts to deliver comprehensive mentorship programs, fostering leadership skills and business acumen. These efforts empower women entrepreneurs to navigate challenges effectively and contribute meaningfully to their communities and the economy.

Organising trade fairs and networking opportunities

To enhance market access and visibility for women-led businesses, the Bank actively facilitated their participation in trade fairs and networking events. These initiatives provide women entrepreneurs with platforms to showcase their products and services at local and regional exhibitions, enabling them to connect with broader markets and expand their customer bases. By organising dedicated forums and seminars, the Bank fosters an environment of collaboration and knowledge-sharing, bringing together women entrepreneurs, industry leaders, and investors to discuss opportunities and challenges. Additionally, the Bank collaborated with government agencies, industry associations, and NGOs to co-host events that promote women’s economic participation. These partnerships aim to bridge gender gaps in entrepreneurship and create a more inclusive business landscape, empowering women to achieve sustainable growth and long-term success.

Impact and strategic outlook

In 2024, the Bank’s Women Banking initiatives empowered over 2,900 women entrepreneurs, fostering financial independence and driving transformative change within their communities. These targeted efforts not only supported individual success but also contributed to broader economic and social upliftment by enhancing gender equity and promoting inclusive development.

To strengthen its impact, the Bank conducted five comprehensive training programs at the Postgraduate Institute of Management (PIM), reaching over 125 women entrepreneurs from across the country. These sessions focused on building entrepreneurial skills, financial literacy, and leadership capabilities, equipping the participants to scale their businesses and navigate market challenges effectively. The Bank also prioritised internal capacity-building by training over 900 staff members on women banking through 18 specialised programs. This initiative aimed to enhance the Bank’s ability to deliver tailored financial solutions and provide a more supportive banking experience for women-led enterprises.

To celebrate International Women’s Day, the Bank organised a series of events across its branch network, engaging over 2,000 women entrepreneurs. These gatherings served as platforms for networking, inspiration, and recognising their achievements, further amplifying the Bank’s role in empowering women and promoting economic inclusivity.

Through these multi-faceted efforts, the Bank reinforced its commitment to fostering a thriving ecosystem for women entrepreneurs, ensuring that they have the resources, training, and support needed to contribute meaningfully to national development.

Looking ahead, the Bank is committed to further advancing its women’s empowerment programs by introducing an expanded range of concessional loan offerings and an insurance scheme tailored to meet the unique needs of women-led businesses, particularly in emerging sectors such as technology and sustainability. Moreover, the Bank plans to scale up its skill development initiatives, equipping women entrepreneurs with advanced digital tools, e-commerce capabilities, and strategies to access global markets. By collaborating with a wider network of stakeholders, the Bank also aims to broaden its networking platforms, hosting international trade fairs and facilitating cross-border market opportunities. By addressing both financial and non-financial barriers, the Bank continues to champion gender inclusivity and empower women to unlock their full potential as leaders, innovators, and vital contributors to economic progress.

Financial literacy and capacity building

The Bank places significant emphasis on building financial and digital literacy as a foundation for sustainable economic empowerment. By extending targeted programs to rural communities, youth, and entrepreneurs, the Bank has strengthened financial inclusion and enabled individuals and businesses to thrive in a dynamic economy.

Conducting outreach programs in rural communities

To bridge the gap in financial awareness in underserved regions, the Bank launched a series of comprehensive outreach programs aimed at rural communities. These initiatives included village-based financial literacy workshops making farmers aware of the importance topics such as saving, responsible borrowing, and the benefits of using formal financial services. Recognising the pivotal role of local leadership, the Bank collaborated with community leaders and grassroots organisations to enhance participation and ensure the programs resonated with the unique needs of rural populations. The sessions were conducted in trilingual formats, integrating relatable, practical examples to foster inclusivity and ensure a deeper understanding among diverse audiences. Through these efforts, the Bank not only educated individuals but also empowered them to make informed financial decisions, laying the foundation for long-term financial well-being and community upliftment.

Youth empowerment initiatives promoting entrepreneurship

The Diribala Next Gen School Entrepreneurship Grooming Programme, which held its inaugural session during the year, is a pioneering initiative by the Bank aimed at empowering young entrepreneurs and fostering a transformative mindset among school entrepreneurship circles. The programme provides students with a platform to showcase their products at Bank-organized events, enhancing their practical business experience. It also focuses on improving financial literacy, offering technical support, and equipping students with industry-specific skills and knowledge through collaborations with government and private sector institutions. Additionally, the initiative includes business mentoring, ensuring that young entrepreneurs receive guidance, support, and exposure to develop their ventures successfully.

Digital literacy campaigns to enhance adoption of digital tools

As the global economy increasingly embraces digital platforms, the Bank has taken significant strides to champion digital literacy, ensuring that all segments of society can participate in and benefit from technological advancements. The Bank conducted workshops focused on digital banking platforms, introducing communities to tools such as mobile banking and online account management. These initiatives aimed to make digital banking accessible and encourage its seamless adoption. Recognising the unique challenges faced by small business owners, the Bank tailored programs specifically for entrepreneurs, helping them harness e-commerce platforms, digital marketing strategies, and supply chain management tools to optimise their operations. Furthermore, acknowledging the tech-savvy nature of the younger generation, the Bank organised youth-centric digital initiatives, including hackathons and coding events, to enhance their technological capabilities and foster innovation. Through these efforts, the Bank bridges the technological divide, empowering individuals and businesses alike to thrive in the digital age. As the economy shifts towards digital platforms, the Bank has proactively championed the cause of digital literacy to bridge the technological divide.

Impact and future direction

Since 2010, the Bank has conducted about 200 awareness programmes on financial literacy, and capacity-building, benefiting over 16,000 farmers and entrepreneurs. In 2024 alone, the Bank’s financial and digital literacy initiatives reached over 1,700 individuals, transforming their ability to make informed financial decisions and adopt sustainable practices. This achievement reflects the Bank’s commitment to equipping communities with the tools needed for financial independence and technological adaptability.

Looking ahead, the Bank plans to broaden the scope of its rural financial literacy programs by collaborating with more NGOs and local governments, ensuring even greater penetration into remote and underserved areas. The Bank also intends to offer training and resources to educate customers on using digital banking platforms, with a particular focus on individuals less familiar with technology. Additionally, the Bank plans to develop engaging and interactive digital learning modules that can provide financial and digital education to a wider audience, leveraging technology to amplify its impact. Recognising the unique challenges faced by women, differently-abled individuals, and other marginalised groups, the Bank is committed to creating tailored training programs that address their specific needs. Through these forward-thinking initiatives, the Bank reaffirms its dedication to empowering communities, driving inclusive growth, and bolstering the nation’s economic resilience for years to come.

Impact measurement and reporting

Recognising the importance of accountability and transparency in its financial inclusion initiatives, the Bank has implemented a robust framework for tracking, evaluating, and reporting the impact of its efforts. The Bank’s commitment to aligning with ESG principles underpins this approach, ensuring that its programs deliver measurable outcomes and meaningful change.

Tracking metrics to evaluate financial inclusion outcomes

The Bank employs a range of metrics to monitor and evaluate the effectiveness of its financial inclusion initiatives such as:

• Increased access to banking services:
  Metrics include the number of new branches, service points, and digital banking solutions introduced in underserved regions, as well as the number of customers onboarded through these channels.
• Microfinance and SME outreach:
  The Bank tracks the number of microfinance loans disbursed, the percentage of women entrepreneurs supported, and the growth of SMEs benefiting from its financial products and services.
• Capacity-building impact:
  Key performance indicators include the number of financial literacy workshops conducted, No. of participants, participant engagement levels, and improvements in financial awareness as measured through surveys and feedback mechanisms.
• Social and economic upliftment:
  The Bank evaluates its impact on marginalised communities by measuring improvements in household incomes, business resilience, and access to basic services like healthcare and education facilitated through financial inclusion programs.

ESG-aligned reporting of financial inclusion efforts

As a socially responsible financial institution, the Bank is committed to aligning its impact reporting with globally recognised ESG frameworks and sustainability standards. By integrating detailed disclosures on its financial inclusion initiatives into this Annual Report, the Bank ensures that stakeholders gain clear insights into the scale, reach, and outcomes of its programs. The Report not only highlights the societal and environmental impacts of the Bank’s efforts but also reinforce transparency and accountability.

To ensure that its initiatives contribute to broader global objectives, the Bank’s reporting is guided by established frameworks such as the SDGs and the GRI. These alignments underscore the Bank’s commitment to embedding sustainability into its core strategies and operations. Furthermore, the credibility of the Bank’s ESG disclosures is enhanced through third-party validation, with independent auditors verifying impact assessments and sustainability reporting to instill stakeholder confidence.

In keeping with its emphasis on innovation and efficiency, the Bank has adopted digital dashboards to monitor financial inclusion metrics. These dashboards provide management with actionable insights, enabling the identification of emerging trends, addressing of potential gaps, and refinement of strategies for maximum effectiveness. Through its diligent impact reporting practices, the Bank continues to demonstrate leadership in sustainability and reinforces its role in advancing financial inclusion and ESG-driven growth.

Impact and strategic outlook

The Bank’s financial inclusion programs have positively transformed the lives of over 16,000 Sri Lankans, successfully bridging the gap between underserved communities and formal financial services. This marked not only a direct impact on financial accessibility but also demonstrated the Bank’s enhanced alignment with its ESG targets for financial inclusion, reinforcing its reputation as a leader in sustainable banking practices.

As the Bank looks to the future, it envisions significant advancements in its financial inclusion agenda. Plans include the introduction of technology-powered tools to enhance impact tracking mechanisms, enabling a more granular analysis of program outcomes and their long-term societal benefits. These tools will allow for deeper insights into the Bank’s efforts, ensuring strategies remain focused and adaptive to evolving community needs. Furthermore, the Bank intends to expand its ESG reporting capabilities, incorporating rich narratives such as case studies, beneficiary testimonials, and detailed metrics on key areas like gender equality and poverty alleviation. These additions will provide a holistic view of the Bank’s initiatives and their alignment with global sustainability goals.

To ensure the continued success of its financial inclusion initiatives, the Bank is committed to fostering robust stakeholder engagement. By collaborating with communities, regulators, and investors, and integrating their feedback, the Bank will refine its programs and embrace emerging best practices. Through its dedication to rigorous impact measurement and transparent reporting, the Bank reaffirms its unwavering commitment to financial inclusion as a cornerstone of its sustainability agenda. By holding itself accountable and sharing its journey with stakeholders, the Bank not only drives meaningful change but also sets a benchmark for responsible and impactful banking practices in the region.

Driving positive impact through innovation

Sustainable products and services represent a vital dimension of the Bank’s commitment to creating long-term value while addressing critical environmental and social challenges. We believe that banks play a pivotal role in promoting sustainable development by offering financial solutions that encourage responsible behaviour across all segments of society. Our focus is not only on financial returns but also on generating a positive, measurable impact on the environment and the communities we serve.

In 2024, we accelerated the development and deployment of sustainable financial products designed to empower individuals, SMEs, as well as corporate clients in their sustainability journeys. Our portfolio of sustainable offerings includes;

• Green finance – Financing for eco-friendly projects
• Renewable energy financing – Supporting clean energy adoption
• Resource efficiency solutions – Promoting eco-friendly practices and reducing environmental footprint.

Advancing Green Finance for a Sustainable Future

In 2024, the Bank reaffirmed its commitment to green financing, making significant strides in sustainable investments and reinforcing its leadership in environmentally responsible banking. The Bank’s Green Financing Portfolio experienced a substantial growth. The Bank’s Green Financing Policy provided a structured approach to integrating sustainability considerations into lending and investment decisions.

Recognising the importance of awareness and capacity building, the Bank undertook multiple initiatives to educate both its staff and customers on green financing solutions. Through 17 capacity-building programs, the Bank empowered over 1,000 employees, equipping them with the knowledge to support clients in transitioning their businesses into sustainable investment opportunities. In parallel, a digital marketing campaign was launched across all online platforms, emphasising the financial and environmental benefits of green financing products, ensuring greater outreach and engagement.

The Climate Assessment for Financial Institutions (CAFI) Tool, developed by the IFC, enables the Bank to quantify, categorize, and track climate-related investments, as well as estimate the greenhouse gas (GHG) reduction impact of funded projects. By leveraging the CAFI Tool, the Bank is able to assess climate risks, align with global sustainability frameworks such as the Paris Agreement and IFC Performance Standards, and make data-driven decisions to enhance its climate-related financial performance.

During the year 2024, the Bank disbursed a total of Rs. 33.72 Bn. in green finance loans, funding high-impact projects across multiple sectors. These projects played a crucial role in reducing greenhouse gas emissions, expanding the adoption of renewable energy, and promoting resource efficiency. Borrowers reported significant progress towards achieving their ESG goals, ensuring measurable environmental and social benefits aligned with global sustainability standards.

Innovation continues to serve as a key enabler of our sustainability strategy. By integrating ESG considerations into our product development process, we ensure that our offerings remain relevant and aligned with emerging sustainability standards. Furthermore, we work closely with stakeholders such as regulators, industry associations, and technology partners, to co-create solutions that drive sustainable transformation across diverse sectors.

Through a robust portfolio of sustainable products and services, we remain committed to building a greener, more inclusive future. By empowering customers with financial tools tailored to promote sustainability, we contribute meaningfully to the global agenda on climate action and responsible growth.

Future direction

Looking ahead, the Bank is poised for further expansion in green financing, with plans to introduce new sustainable financial products, including Green Bonds, Sustainable and Gender Bonds, and Impact Investing Funds. These initiatives will scale up investments in renewable energy, sustainable agriculture, and low-carbon technologies, enabling businesses to transition towards greener, more responsible operations. Additionally, the Bank will continue to enhance its customer education and advisory services, ensuring that both businesses and individuals are well-equipped to leverage green financing solutions for sustainable growth.

Strategically, the Bank is set to target new customer segments, particularly SMEs, startups, and individuals engaged in sustainability-focused industries, such as renewable energy, green construction, and circular economy ventures. By aligning with the SDGs, particularly SDG 13 (Climate Action), SDG 7 (Affordable and Clean Energy), and SDG 12 (Responsible Consumption and Production), the Bank is ensuring that every investment contributes meaningfully to the global sustainability agenda.

Renewable energy financing

The Bank has long recognised the transformative potential of renewable energy in driving economic growth while mitigating climate change. In 2024, the Bank further strengthened its commitment to clean energy transitions by offering a suite of financial solutions designed to support the adoption of renewable energy technologies and energy-efficient systems.

Financing for renewable energy projects

The Bank played a pivotal role in advancing Sri Lanka’s renewable energy agenda by providing targeted financing to businesses and developers pursuing renewable energy projects such as the following:

Energy-efficient equipment loans

Recognising the critical need for energy-efficient solutions across industries and households, the Bank has significantly expanded its financial offerings to promote sustainability and operational efficiency. Businesses seeking to modernise their infrastructure were provided with specialised loans for energy-efficient machinery, lighting, and cooling systems. These energy efficiency loans for businesses were not only designed to reduce operational costs but also to help companies achieve a reduced carbon footprint, thereby supporting their sustainability goals.

On the residential front, the Bank extended its support to individuals transitioning to greener lifestyles. Dedicated financing programs were introduced for the adoption of solar rooftop systems, energy-efficient appliances, and electric vehicles (EVs). These solutions enabled homeowners to achieve substantial savings on utility expenses while contributing to the broader environmental agenda.

The Bank also prioritised the needs of SMEs, recognising their pivotal role in driving economic growth and innovation. Tailored financing options, coupled with advisory services, encouraged SMEs to integrate energy efficiency into their operations. This support ensured cost savings and enhanced their competitiveness in an increasingly eco-conscious market. Through these initiatives, the Bank continues to empower its stakeholders to adopt sustainable practices, fostering a collective movement toward environmental stewardship and energy conservation.

Strategic direction

Looking to the future, the Bank is determined to deepen its commitment to renewable energy financing and advance its contributions to a sustainable, low-carbon economy. The Bank plans to significantly expand its renewable energy financing portfolio by supporting emerging technologies, which hold the potential to revolutionise energy systems and further enhance the viability of clean energy sources.

In addition to funding provided, the Bank will actively collaborate with policymakers, industry leaders, and other stakeholders to overcome regulatory challenges that may hinder the growth of the renewable energy sector. By fostering a conducive policy environment and addressing systemic barriers, the Bank seeks to unlock new opportunities for innovation and investment in clean energy markets.

To drive greater adoption of renewable energy across all economic sectors, the Bank will focus on introducing tailored financial solutions that incentivise sustainable practices among businesses and individuals. By pioneering financial products that align with the evolving needs of the clean energy market, the Bank positions itself as a trusted partner for clients committed to sustainable growth.

Promoting sustainable agriculture

The Bank recognises the critical importance of sustainable agriculture in ensuring food security, preserving ecosystems, and fostering rural development. In 2024, the Bank reinforced its commitment to supporting farmers and agribusinesses in their transition to environmentally friendly and economically viable agricultural practices through a range of innovative financing solutions.

Promoting sustainable and smart agriculture

The Bank has been a frontrunner in driving sustainable agriculture by introducing green financial products and supporting smart agricultural practices. These initiatives aim to align farming with global ESG standards while modernising the sector for improved productivity and sustainability.

To support sustainable farming, the Bank launched tailored loans for organic farming, precision agriculture, and agroforestry. Farmers transitioning to organic cultivation benefited from financial assistance to reduce reliance on synthetic inputs, improving soil health and unlocking export opportunities for organic produce. Precision agriculture financing enabled the adoption of advanced technologies like GPS mapping, soil sensors, and data analytics, helping farmers optimise water and nutrient use while minimising waste and environmental impacts. Additionally, agroforestry loans encouraged the integration of tree cultivation with farming, contributing to biodiversity, combating deforestation, and generating diverse income streams from timber and forest products.

The Bank also facilitated the adoption of smart agriculture technologies that enhance efficiency and sustainability. Greenhouse financing supported controlled-environment agriculture, ensuring year-round cultivation with higher yields and resource efficiency. Drip irrigation systems were funded to help farmers conserve water and improve crop productivity through precision watering. To further enhance sustainability, the Bank financed renewable energy solutions such as solar-powered irrigation pumps, cold storage facilities, and processing units, reducing energy costs and carbon emissions.

Capacity-building and technical assistance

Beyond financing, the Bank collaborated with agricultural research institutions, development agencies, and government bodies to provide capacity-building programs for farmers, including:

• Workshops and training:
  Farmers were trained in climate-resilient farming techniques, sustainable soil management, and pest control methods to increase productivity and adaptability.
• Access to market information:
  The Bank facilitated access to market intelligence and pricing trends, empowering farmers to make informed decisions about crop selection and marketing strategies.
• Advisory services: Dedicated agricultural officers were appointed to guide farmers in preparing project proposals and accessing government subsidies linked to sustainable agriculture practices.

Impact and strategic direction

Through its sustainable agriculture initiatives, the Bank has played a pivotal role in driving transformative change in Sri Lanka’s agricultural sector. Over the years, the Bank has empowered countless farmers and agribusinesses, providing them with both financial and technical resources to adopt sustainable farming practices. These efforts have enhanced agricultural resilience against the challenges posed by climate variability, with innovative farming techniques and renewable energy solutions forming the cornerstone of this progress. Furthermore, the Bank’s support for organic farming and agroforestry has contributed significantly to environmental preservation, reducing carbon emissions and promoting biodiversity.

Looking to the future, the Bank intends to scale its green agricultural loan portfolio, targeting cutting-edge advancements such as artificial intelligence (AI) for farm management and carbon farming solutions. To expand the reach and impact of its initiatives, the Bank plans to collaborate with international development agencies, unlocking funding for large-scale sustainable agriculture projects. Additionally, the Bank is committed to aligning its agricultural financing with global sustainability frameworks, including the SDGs, ensuring its efforts contribute to broader environmental and social objectives.

Sustainable Building and infrastructure

The Bank has prioritised sustainable building and infrastructure financing as a key component of its sustainability agenda. By focusing on green building solutions, energy-efficient renovations, and circular economy initiatives, the Bank is creating pathways for environmentally responsible growth while supporting communities in transitioning to sustainable lifestyles.

Green home loans and financing for energy-efficient renovations

One of the most enduring relationships in banking is the bond between home builders and the financial institutions that support their aspirations. At Commercial Bank, home financing is not just about providing capital—it is about empowering individuals and families to build sustainable, energy-efficient homes that contribute to a greener future. Despite economic challenges, the Bank has remained steadfast in expanding its home loans portfolio, ensuring that customers have access to financing solutions that align with modern housing needs and sustainability goals.

The Bank’s Home Loan portfolio is designed to meet diverse housing requirements, and are available in General Home Loans, Foreign Currency Home Loans, and specialized financing for first-time homebuyers and builders. Among these, the Green Home Loan stands out as a pioneering initiative, reinforcing the Bank’s commitment to sustainable living and responsible financing.

The Green Home Loan, another first-of-its-kind offering, has been developed to support environmentally friendly housing solutions. This innovative product provides financing for homes that have been certified by the Green Building Council of Sri Lanka (GBCSL), ensuring that customers can invest in sustainable, energy-efficient living spaces. The Bank offers Green Home Loans of up to Rs. 50 Mn. for the purchase or construction of homes with Green Building Council of Sri Lanka (GBCSL) Certification, making it easier for customers to integrate sustainable design and eco-friendly materials into their residences.

In addition to financing green-certified homes, the Bank also extends Green Home Loans of up to Rs. 5 Mn. for solar power systems, solar net metering installations, and other green initiatives, including waste and rainwater management or composting solutions. These loans empower homeowners to adopt renewable energy and sustainable practices, ultimately reducing their carbon footprint and long-term utility costs.

Circular economy financing for waste recycling and resource recovery

As part of its commitment to sustainable infrastructure, the Bank has introduced financing solutions that support the principles of the circular economy, as listed below:

• Waste recycling projects:
  The Bank provides funding to enterprises specialising in waste recycling, promoting the recovery and reuse of materials to minimise landfill contributions. Financing is extended for initiatives such as plastic recycling plants, e-waste management facilities, and compost production units.
• Resource recovery financing:
  Dedicated credit lines are available for projects focusing on resource recovery, including technologies for converting waste to energy, extracting valuable materials from industrial byproducts, and implementing closed-loop manufacturing systems.
• Public-Private Partnerships:
  The Bank actively collaborates with municipal councils and environmental organisations to develop scalable waste management infrastructure. These partnerships create economic opportunities while addressing critical environmental challenges.

Green Bonds: Strengthening Leadership in Sustainable Finance

A landmark achievement in 2024 that reinforced Commercial Bank’s leadership in sustainable finance was the development of its Sustainable Bond Framework. This framework received a Second Party Opinion from Sustainable Fitch and underwent independent third-party verification by Messrs EY, ensuring alignment with global sustainability standards. With this solid foundation in place and the necessary regulatory approvals secured, the Bank is now well-positioned to issue Green Bonds in the future. These bonds will be instrumental in mobilizing funds exclusively for renewable energy projects, energy-efficient infrastructure, and waste management solutions, further advancing the Bank’s commitment to environmental sustainability. The proceeds from these bonds will be transparently managed in accordance with the International Capital Market Association’s (ICMA) Green Bond Principles, reinforcing responsible investment and sustainable impact.

Impact and future outlook

In 2024, the Bank’s sustainable building and infrastructure financing initiatives delivered tangible results, reinforcing its commitment to environmental sustainability and economic resilience. The Bank also played a crucial role in advancing circular economy adoption, financing waste recycling and resource recovery projects, which reduced landfill waste and mitigated environmental degradation.

Looking ahead, the Bank is focused on expanding its green finance portfolio to further drive sustainable impact. Plans include broadening its range of green financing products, particularly by introducing affordable housing options to make sustainability accessible to a wider segment of society. The Bank also aims to collaborate with international organisations to introduce innovative technologies and funding solutions that will support large-scale circular economy projects. Furthermore, efforts will be made to enhance customer awareness through campaigns and workshops, ensuring that individuals and businesses fully understand the benefits of sustainable housing and infrastructure.

Digital transformation with sustainability goals

The Bank integrates its sustainability agenda into its digital transformation initiatives, leveraging technology to reduce environmental impact while enhancing customer convenience and operational efficiency.

Promoting digital innovations

Over the years, the Bank has transitioned from a traditional banking model to embrace a forward-thinking, digital-first strategy, laying a strong foundation to lead the digital payment landscape. Its consistent delivery of innovative solutions has enhanced the banking experience for retail and corporate customers alike. Building on this foundation, the Bank integrates sustainability into its digital transformation by expanding mobile banking services, embedding personalised features for better engagement, and promoting paperless banking through awareness campaigns. Investments in energy-efficient IT infrastructure further align with the Bank’s climate goals, reinforcing its commitment to innovation, environmental responsibility, and a greener future for the communities it serves.

Digital roadmap 2023–2025

The Digital Roadmap 2023–2025 aligns with the Bank’s overarching vision of fostering a digital economy that caters to the diverse technological needs of its customers. Focused on enhancing the digital experience for retail clients, the roadmap outlines a comprehensive strategy for digital transformation over the next two years. It is guided by four key objectives, namely:

As part of this strategy, the Bank is committed to transforming traditional banking processes into digital workflows, ensuring seamless integration with external ecosystems while enhancing internal systems to stay adaptable amidst evolving regulatory and risk management landscapes. Further emphasis will be placed on re-skilling staff and acquiring talent in specialised domains to support this transformation. By building strategic partnerships and strengthening its data capabilities, the Bank reaffirms its commitment to remaining at the forefront of digital innovation, ensuring long-term value for its customers and other stakeholders.

Designed for seamless access, “ComBank Digital” is available via a responsive web app and three native mobile apps, ensuring compatibility across PCs, laptops, tablets, and smartphones. Security is a priority, with internationally recognised standards ensuring a safe and reliable banking experience. The platform offers account inquiries, bill payments, fund transfers (domestic and international), loan applications, savings goal setting, fixed deposit investments, and instant government payments.

Continuing its innovation-first approach, the platform introduces unique features such as savings objectives, eFD redemptions, and secondary accounts like eSavings and eMoney market accounts. Businesses benefit from a dedicated mobile banking app with features like RTGS high-value transfers, multi-currency transactions, and bulk payments.

Self-assisted functionalities enhance user convenience, including password recovery, customisable alerts, transaction limit adjustments, and advanced tools for managing cheque images, account statements, and exchange rate monitoring. Users can also manage credit and debit cards, including blocking, activation, and replacements, and securely communicate with the Bank.

Since its launch in 2020, “ComBank Digital” has expanded to serve business clients, integrating solutions tailored to their financial needs. Digital Assistants at branches and targeted promotional campaigns have further boosted adoption, reinforcing the Bank’s commitment to digital transformation.

The Bank continues to enhance and refine “ComBank Digital” to meet the evolving needs of its customers, solidifying its leadership in Sri Lanka’s digital banking landscape.

Host-to-host connectivity

The Bank introduced Host-to-Host (H2H) payment services as part of its ComBank Digital Enterprise Solutions, offering seamless integration with corporate ERP systems. This innovative solution automates bulk transactions, reconciliations, and real-time payment processing, significantly enhancing efficiency, security, and transparency for corporate clients. Supporting leading ERP platforms, H2H reduces manual intervention and underscores the Bank’s dedication to driving digital transformation for businesses.

ComBank Digital Penetration Table – 12

Year	2024 %	2023 %
ComBank Digital Penetration	47	36

Investments in IT Infrastructure Table – 13

During the year ended December 31,	2024 (Rs. Mn)	2023 (Rs. Mn)	2022 (Rs. Mn)	2021 (Rs. Mn)	2020 (Rs. Mn)
Investments in Hardware (Computer Equipment)	2,122	1,450	2,441	434	506
Investments in Software (Licenses etc.)	1,626	1,116	2,218	768	409
Total	3,748	2,566	4,659	1,202	915

Migration to Digital Channels Table – 14

During the year ended December 31,	2024	2023	2022	2021	2020
Number of customers migrated to ComBank Digital	339,903	339,032	254,262	206,776	106,968
New customer acquisition through digital channels	6,022	8,504	9,539	12,491	16,327

Flash Digital Bank Account:
Revolutionising Digital Banking for the New Generation

Flash, designed for the tech-savvy generation, offers a 100% digital onboarding experience, enabling customers to open accounts effortlessly through self-registration. This seamless process, combined with advanced wealth management tools, positions Flash as a leader in digital banking.

The application achieved significant milestones, including the launch of the Flash Teen Digital Bank Account (“Flash Fam”) to empower teens, the introduction of Non-Face-to-Face Onboarding via Digital KYC for enhanced convenience, and the release of Flash 4.6 with improved functionalities. It was also recognised with the Insurance Consumer Category at the 2023 NBQSA ICT Awards and expanded its reach by enabling Sri Lankans working abroad to open accounts, fostering global financial inclusion.

Flash offers tri-lingual accessibility, a unique hospitalisation support insurance plan, and seamless peer-to-peer transfers. Users can set savings goals, create in-app groups for fund management, and make QR/NFC payments at LANKAQR and ComBank Q+ merchants. The Just Pay Facility allows instant top-ups and bill payments, while advanced BI tools categorise transactions and provide spending insights. The “Save the Environment” feature estimates CO2 emissions per transaction, promoting eco-conscious banking. Flash also provides an Instant Visa Debit Card, 100% digital credit card applications, and robust 128-bit encryption for secure transactions.

e-Passbook

The Bank has revolutionised account access and management with the introduction of its e-Passbook facility, an advanced mobile application designed for both Android and Apple smartphones. This innovative solution offers users the ability to view account transaction details seamlessly, whether online or offline. Emulating the traditional format of a savings passbook or current account statement, the e-Passbook provides a detailed account history, enabling customers to access their financial information in real-time with unparalleled convenience.

The application is easily accessible to eligible account holders who can self-register by downloading the “ComBank e-Passbook” App from the Google Play Store or App Store. Users have the flexibility to set app access preferences, including options for no authentication, local PIN, or biometric authentication. With features such as real-time balance checks, transaction search capabilities, account nicknaming for easy reference, and tools to locate ATMs and branches, the e-Passbook offers a comprehensive suite of functionalities. Users can also monitor exchange and interest rates, self-enroll or remove accounts from the display, and enjoy all these benefits free of charge.

The e-Passbook has achieved remarkable success, with over one million users logging in monthly and attracting over 15,000 new users each month. Notably, the application is offered to an average of 18% of the Bank’s new customer base, highlighting its growing popularity and the Bank’s commitment to enhancing customer experience through digital innovation.

WhatsApp banking

The Bank set a new benchmark in the banking sector by becoming the first Sri Lankan bank to launch WhatsApp Banking, further solidifying its reputation as a leader in innovative financial solutions. This state-of-the-art platform enables customers to access account balances, transaction history, and cheque book requests effortlessly through WhatsApp. In addition, both customers and non-customers can inquire about fixed deposit rates and foreign exchange rates, making banking more accessible and user-friendly. The platform also supports self-registration with the ComBank Digital app and facilitates new account openings through the Flash Digital Bank Account, ensuring a seamless and secure banking experience. With end-to-end encryption, 24/7 availability, and the ability to generate loan leads successfully converted by the Retail Products Department, WhatsApp Banking underscores Commercial Bank’s commitment to enhancing customer engagement and delivering cutting-edge services.

Viber banking

“Bank with ComBank on Viber” extends seamless banking services to the Bank’s customers with registered mobile numbers, while also welcoming non-customers interested in opening an account. With real-time customer service powered by an AI Chatbot, users enjoy 24/7 access to essential banking services in three languages, enhancing convenience and inclusivity. Key features include checking account balances, viewing recent transactions, placing cheque book requests, and inquiring about fixed deposit and exchange rates. This innovative platform reflects the Bank’s commitment to leveraging digital solutions for a superior customer experience.

Meeting the increasing demand for digital banking services

The Bank is proactively addressing the growing demand for digital banking services through a comprehensive strategy anchored in technological advancements, robust security, exceptional customer support, and innovative solutions. Central to this effort is the Digital Banking Division, which ensures that the Bank continues to meet the evolving expectations of digitally-savvy customers while maintaining a strong focus on innovation, scalability, and sustainability.

Virtual interactive e-statement service

As part of its commitment to enhancing customer convenience, the Bank plans to introduce a Virtual Interactive E-Statement Service. This platform will provide customers with centralised, 24/7 access to essential documents such as Withholding Tax (WHT) certificates, account statements, and credit card statements. Designed to simplify document management, this user-friendly and secure digital solution reduces reliance on physical statements, aligning with the Bank’s sustainability goals and commitment to delivering seamless digital banking experiences.

Agenda for 2025 and beyond

The Bank’s forward-looking agenda encompasses several strategic initiatives aimed at enhancing digital capabilities and customer experiences. Plans are underway to introduce an Enhanced Cash Management Solution tailored for Business Banking customers, addressing their complex financial management needs. Efforts to strengthen fraud monitoring will be supported by a dedicated fraud management solution, ensuring robust protection against financial crimes. Additionally, the Bank aims to digitalise the Pawning Top-up, Renewal, and Settlement processes via ComBank Digital, offering customers greater convenience and efficiency.

Leveraging the power of data analytics, the Bank plans to recommend pre-approved loans for retail customers, delivering personalised financial solutions. Enhancements to the application processes for loans, leasing, and credit cards are also on the agenda, making these services more accessible and user-friendly. Transforming “ComBank Digital” into a comprehensive payment channel and e-commerce platform, including the integration of “ComLEAP”, is another key milestone aimed at broadening the platform’s capabilities.

To further enhance customer experiences, the Bank intends to introduce a VKYC (Video Know Your Customer) solution, simplifying the process of updating sensitive customer data in the core banking system. Collaborations with billers will streamline the bill payment journey through bill presentment, reducing complexity for customers. The Bank is also set to improve onboarding channels for new customers by integrating ComBank Digital with the proposed VKYC solution, ensuring a seamless and efficient onboarding experience. These future plans underscore the Bank’s commitment to innovation, security, and customer-centricity.

The Bank is planning a comprehensive consolidation of its digital applications into a unified platform, enabling a Single Sign-On (SSO) feature. This initiative aims to significantly enhance the user experience by ensuring high security and optimal convenience for conducting digital banking transactions. The implementation of this consolidated platform will provide seamless access to a range of features, including a corporate online portal and account services, a payment module, virtual account management, liquidity management, and cash management functionalities. Additionally, the integration of the platform with other ecosystems through SSO, such as Trade, Treasury, and Supply Chain Finance, will further enhance operational efficiency and connectivity, reinforcing the Bank’s commitment to digital transformation and customer-centric innovation.

Planned digital banking solution

To streamline and simplify the digital banking experience, the Bank is developing a single, comprehensive platform that integrates the features of its existing digital applications. This ambitious project aims to consolidate multiple apps into a unified ecosystem, enhancing customer convenience while supporting the Bank’s geographical and service expansion objectives.

The integrated platform will offer a wide range of services, including balance inquiries, fund transfers, real-time payments, card management, loan applications, and personalised budgeting tools. Enhanced user experience features include a unified dashboard, multilingual support, and AI-driven financial recommendations for personalised journeys. Robust security measures, such as biometric authentication and advanced encryption, will ensure secure and seamless access, while offline functionalities like e-Passbook and eSlips will provide added convenience.

To encourage broader adoption, the platform will include a wallet facility for non-Commercial Bank users, QR payments, peer-to-peer (P2P) transfers, and lifestyle features that create a holistic digital ecosystem. Integration with external financial platforms will further expand functionality, offering customers an enriched banking experience tailored to their diverse needs.

This consolidated platform represents a cornerstone of the Bank’s digital transformation strategy, reflecting its leadership in the digital banking space. By integrating the best features of its existing applications, the Bank is poised to deliver an intuitive, efficient, and inclusive digital experience that anticipates and exceeds customer expectations. The rollout will initially target existing Flash customers, with plans to extend the solution to other markets and migrate users of other apps to the new platform.

By investing in these initiatives, the Bank underscores its dedication to innovation, sustainability, and customer-centricity, solidifying its position as a trailblaser in the digital banking landscape.

Optimising costs through digital transformation

The Bank has leveraged its digital transformation journey to achieve significant cost savings by replacing traditional manual operations with streamlined digital processes across its network. By adopting innovative digital solutions, the Bank has enhanced operational efficiency and minimised resource consumption, particularly in areas such as paper usage. Key initiatives contributing to these cost efficiencies include digital onboarding for investment products, automated activation of standing orders, digital loans against fixed deposits, online account openings for both primary and secondary accounts, and digital transmission of cheque book requests. These efforts underscore the Bank’s commitment to sustainability and reflect its strategic focus on creating long-term value through operational excellence.

Challenges in digitalising banking services

As the Bank continues to accelerate its digital-first strategy, it faces a multifaceted array of challenges that require focused strategies and proactive measures over the next three years. The growing adoption of digital channels has amplified the risk of cyber threats, including scams, data breaches, and cyber-attacks. To mitigate these risks, the Bank must strengthen its cybersecurity frameworks, integrate advanced threat detection systems, and foster a culture of heightened security awareness among both staff and customers.

Anticipated changes in regulatory compliance regarding digital transactions, customer data handling, and financial reporting further underscore the need for agility in aligning operational practices while maintaining efficiency. Effective collaboration with regulatory bodies will play a crucial role in ensuring seamless implementation of compliance measures.

With rising customer expectations for seamless, intuitive, and secure digital platforms, the Bank faces the challenge of balancing continuous innovation with reliability. Meeting these expectations will require sustained investments in user interface design, feature enhancements, and personalised service offerings. Simultaneously, the Bank must navigate an intensely competitive digital banking landscape dominated by fintech startups and other financial institutions. Differentiating its offerings through unique products, superior customer service, and strategic partnerships will be key to maintaining a competitive edge.

The rapid pace of technological advancements - ranging from blockchain and AI to biometrics and quantum computing - further highlights the importance of staying ahead through strategic investments in research and development. Enhancing customer onboarding and verification processes while adhering to stringent KYC and AML requirements is another pressing challenge. The integration of AI-powered tools and digitised workflows will help achieve compliance without compromising the user experience.

As the volume of data collection continues to grow, addressing ethical concerns and ensuring transparency in data usage becomes increasingly vital. Establishing clear policies on data privacy, informed consent, and ethical AI practices is essential to building trust among customers and stakeholders. The Bank must also prioritise the expansion of digital banking services to underserved and rural populations, aligning with its broader sustainability goals. Tailored outreach programs and customised product offerings will help bridge the financial accessibility gap.

Equally critical is the building of digital literacy among customers and staff to ensure effective utilisation of the Bank’s services. Comprehensive training programs, interactive tutorials, and targeted campaigns will be integral components of the Bank’s ongoing digital transformation journey. By addressing these challenges head-on, the Bank can continue to lead the way in creating a future-ready, inclusive, and secure digital banking ecosystem.

Transforming Digital Payments

In 2024, the Bank’s Card Centre solidified its leadership in digital payments, driving financial inclusion and customer-centric innovation. The Q+ Payment App, Sri Lanka’s premier digital wallet, continued its success, winning the “Best Mobile App for Retail Payments under LankaQR” award for the second consecutive year. A landmark achievement was the launch of Sri Lanka’s first AliPay QR integration, catering to a rapidly expanding digital-first customer base.

The Bank introduced industry-first solutions, including a cashless, card-enabled vending machine, promoting contactless payments. New product launches, such as the Visa Signature Debit Card and Visa Corporate Credit Card, offered exclusive benefits to premium and corporate segments. Strategic collaborations, notably with AIA Insurance, reinforced the Bank’s standing in financial services.

Digital transformation remained central to growth in Q+ Payment App with trilingual capabilities enhancing accessibility. Sustainability efforts advanced with over 50% of customer statements digitised, reducing paper waste and encouraging eco-friendly banking.

Innovation extended beyond payments, as automation and AI-driven solutions optimized operations, personalised offers, and strengthened security. Plans are underway to evolve the Q+ Payment App into a comprehensive lifestyle platform, integrating self-service options and AI-powered recommendations.

The Bank’s digital growth was underscored by impressive performance metrics: debit card usage rose by 27%, POS acquiring volume increased by 36%, IPG acquiring volume surged by 60%, and Q+ Payment App transactions expanded by 64%. These achievements affirm the Bank’s pivotal role in shaping Sri Lanka’s digital payment ecosystem, reinforcing its vision of a seamless, technology-driven financial future.

Monitoring and reporting impact

The Bank recognises the importance of measuring and transparently communicating the environmental and social impacts of its sustainable financing initiatives. By implementing advanced monitoring systems and adhering to global standards, the Bank ensures that the projects contribute to meaningful, measurable, and accountable sustainability outcomes.

Measuring environmental and social impact

The Bank has integrated sophisticated systems such as the following to track and evaluate the environmental and the social impact of its funded projects, ensuring alignment with its sustainability goals:

• Impact assessment tools: Utilising tools such as the Climate Assessment for Financial Institutions (CAFI) to quantify the environmental benefits of green financing projects, including reductions in greenhouse gas emissions and improvements in energy efficiency.
• Social impact metrics: Establishing specific indicators to measure the social outcomes of projects, such as job creation, gender inclusivity, and community development.
• Baseline and progress tracking:Collecting baseline data for funded projects and monitoring progress over time to ensure that anticipated impacts are achieved.

Enhancing transparency through reporting

The Bank remains steadfast in its commitment to enhancing transparency and accountability through detailed reporting on its sustainability initiatives. By aligning impact metrics with globally recognised frameworks such as the GRI, the SASB, and the SDGs, the Bank ensures its disclosures meet the highest international standards. This Report has detailed disclosures of the Bank’s sustainability initiatives, key achievements, lessons learned, and the cumulative impact of its projects, providing stakeholders with a clear understanding of the Bank’s contributions to sustainable development. Furthermore, the Bank actively engages with stakeholders, including investors, regulators, and communities, sharing insights into the outcomes of its initiatives to foster trust and demonstrate the tangible value of sustainable finance. Through these efforts, the Bank reinforces its role as a transparent and responsible financial institution committed to driving positive change.

Advancing impact reporting for sustainability excellence

In 2024, the Bank’s efforts in monitoring and reporting sustainability outcomes yielded significant achievements as detailed above, highlighting its commitment to transparency and accountability.

To further strengthen its reporting capabilities, the Bank continues to invest in advanced frameworks that enhance accuracy, relevance, and stakeholder alignment. This includes the expansion of integrated digital platforms to streamline data collection and analysis across all funded projects. Additionally, the Bank prioritises capacity building, offering training programs for employees and project partners on robust impact measurement methodologies and reporting standards. These initiatives underline the Bank’s dedication to rigorous monitoring and transparent communication of its sustainability achievements.

Vision for the future

The Bank aspires to become a trailblaser in sustainability impact monitoring and reporting by embracing innovative methodologies and aligning more closely with global standards. By integrating big data, machine learning, and predictive analytics, the Bank seeks to deepen insights into the impact of its projects and pinpoint areas for continuous improvement. Its commitment to global benchmarking ensures that reporting practices are informed by international best practices, maintaining competitive excellence. Furthermore, fostering collaboration with industry bodies, regulators, and clients enables the co-creation of robust frameworks that elevate impact reporting standards across the sector. Through these concerted efforts, the Bank underscores its dedication to generating measurable value, building stakeholder trust, and driving meaningful progress towards global sustainability goals.