HNB Credit Cards – unparalleled value addition

Hatton National Bank (HNB) is one of the predominant credit card issuers in Sri Lanka which specialises in issuing Visa as well as the MasterCard brands.

The bank has been dominating the credit card sector for well over a decade offering convenient customer services coupled with superior value additions. The Sunday Leader spoke to Manager, Card Centre and Channel Services, HNB, Roshantha Jayatunge to find out more details on what the bank offers its credit card holders.

"What we are currently aiming at is continuing our on going promotions in addition to giving value to the current card usage through more innovative value additions that other credit cards do not offer. We have completed several successful promotions this year giving the spotlight to two of our main campaigns, which include our loyalty programme, that awards points on credit card spend, called ‘Royalty 2008’ and ‘October Swipe.’

"The Royalty 2008 campaign has been continuing for the past four years, and each year we have been awarding different types of benefits to our customers. Our loyalty scheme is quite different to that of other banks, where a card holder’s credit card points are automatically redeemed at the end of the year and the relevant rupee value is credited to the card holder’s account," says Jayatunge.

The bank also offers customers a special draw through the Royalty programme where the cardholder is entitled to several chances in the draw according to the multiple levels of points that they accumulate.

The prizes that are awarded have changed over the years which have varied from Benz cars to overseas trips. This year the bank has based its programme on overseas travel destinations and has already awarded 10 tickets to Thailand. The current promotion which will take place in the month of October offers 10 tickets to Singapore.

Through the Royalty programme card holders are able to accumulate a point for each Rs. 100 spent, and based on the multiples of Rs. 100 that a cardholder has, entitles him or her to multiple chances in the draw.

With the intention of promoting the use of the bank’s credit cards HNB offers customers direct value additions at targeted merchant locations. One such promotion was conducted during the Avurudhu season at all Arpico Supercentres. The bank has once again tied up with a giant in the supermarket industry in Sri Lanka, offering a special discount at all Keells Super and Super K outlets.

The promotion, styled as October Swipe, entitles all HNB credit card holders to a 5% discount on their bill value for all transactions, which are above Rs. 4,000 at any Keells Super or Super K outlets.

"October Swipe is still in its first week and so far the response that we are receiving for this promotion is quite encouraging. Promotions such as this create awareness about our credit cards and our credit card holders also are able to receive direct benefits on their purchasing power. In addition to this we offer many other value additions to our credit card holders. Through our network of over 150 merchants, customers are entitled to zero percent installment plan purchases, which allows purchasing on zero interest on a monthly installment plan.

"We also provide regular discounts at over 50 different types of partner merchants that range from housing, furniture, accessories and clothing etc., where card holders are entitled to varied discounts throughout the year. In terms of our value addition we do not limit our offers to discounts alone but also offer free overseas travel insurance to card holders who use their credit cards for purchasing their airline tickets. This cover is also extended to the cardholder’s spouse and children as well.

"We were also the first bank to offer credit card holders SMS alerts, which has become very popular among customers as it allows you to keep track on your credit card balance and also prevents any form of fraudulent transactions from taking place. Payments for our credit cards can be made at any one of our 174 branches and customer service centres located islandwide. In addition to this our credit card payments can also be made through our internet banking and mobile banking systems," stated Jayatunge.

HNB credit cards are unique and come in two varieties which include a picture as well as photo cards and is the first of its kind in Sri Lanka. This system also allows you to personalise your credit card.

The bank is also planning more value additions to their credit cards and plans are already underway to provide special offers to customers for the upcoming Christmas season.

In conclusion Jayatunge said, "We make our value additions very transparent and our services have always provided a very personalised touch which is why we have been termed as the ‘Home for Credit Cards.’"

Housing Finance Development Corporation (HDFC), a public quoted company, commenced operations in December 1983 and along the way changed its focus from that of a building society catering to the low income groups to expand its operations to cater to the housing financing needs of middle and upper income groups in 1991. It became a licensed, specialised bank under the Finance and Planning Ministry in August 2003

HDFC went in for a public share issue of 2.5 million shares at a premium price of Rs. 220 per share which was oversubscribed 11 times over and thereby the share capital of the bank was increased to Rs. 612.25 million.

The bank’s primary objective has been to enhance the national housing stock and home ownership in Sri Lanka. In this regard HDFC’s loan portfolio has a majority of low and middle income earners who have restricted access to credit facilities and who over the past 25 years have stood to benefit from the excellent loan schemes offered by the bank.

The services offered with the housing loan facilities include professional services in the areas of legal, technical and valuation – which most borrowers have little or no access to, at a reasonable cost.

In 2006 HDFC achieved market leadership by granting the largest number of loans during a calendar year by any Sri Lankan bank.

With a network of 21 branches (one in each district) which also covers Vavuniya and Batticaloa, HDFC’s client base exceeds 75,000 whose loan applications have been approved within 14 -30 days with a repayment period of 10-15 years.

Recently appointed Chief Executive Officer and General Manager Suresh Amerasekera said that the bank has obtained Central Bank approval for five more service centres. "We intend expanding operations in more areas in a cost effective manner to provide other standard services offered by commercial banks and to make available delivery channels to market our products and services," he said.

Loans are granted to build a house, to add extensions/renovations, complete a partially built house, obtain water and electricity connections, for outright purchase of a house, to purchase land to build a house, and to redeem a property that has been mortgaged. Repayment of the loan has to be made in equal monthly installments on the basis of diminishing capital.

Rapid urbanisation through migration of the rural population to urban areas seeking jobs, mainly in the Western Province, has led to many socio-economic and environmental problems. This has led HDFC to extend its loan portfolio by around 30% in the Colombo District, Amerasekera explained.

"Since we are fully integrated in housing finance banking operations and well positioned with branches in 21 districts we are able to even offer discounts on building materials through our strategic partners with whom we have strong corporate relationships," he added.

Following the government’s housing development effort the country’s first ever long term fixed deposit certificate – Pass Through Certificate – has gained momentum in view of its special features such as risk free financial guarantee and high dividends.

"To support this endeavour, HDFC introduced a new scheme – Dhana Nidhana which has a range of benefits through its long term housing loans. Depositors would be paid a higher interest rate on maturity and this scheme comes with total guarantee," said Amerasekera. "We have a grading of BBB+(lka) by Fitch Ratings, an investor benchmark."

Other loan schemes include Kedella – a housing loan scheme, Thilina Home Loan that offers a loan of up to four times the minor saving balance, Shrama Udana – a speedy and special scheme for EPF holders, Thilina Children’s Savings Account which offers gifts in addition to the high interest, Situ Sevana – value added home loan, Prathilaba – a super savings product offering the most attractive rate of interest, Guru Sevana – for government teachers, Vishrama Udana – a value added fixed deposit scheme for senior citizens and Sirisara – an additional home loan scheme for existing customers.

HDFC calls its new investment product, Dana Nidana as a revolutionary long term investment product which in addition to the stable and high returns also allows the investor to transfer the certificate to a second party, resell it at a time of urgent cash requirement or obtain an instant credit of 90 per cent of the invested value of the certificate at the time of the credit application.

Amarasekera went on to say that the maturity period varies from seven to 15 years. Dhana Nidana serves a purpose in providing a sound long term investment to meet the long term investor objectives such as higher education for children or to provide as a gift for children when they reach 18 years. According to the published accounts for 2007, HDFC has a capital adequacy of 31% for Tier I capital and 32% for Tier II which is very much above the industry standard

HDFC also keeps to the Basel II Framework which seeks to improve existing rules by aligning regulatory capital requirements more closely to underlying risks that banks face as announced by the Central Bank.

HDFC, in line with this move has taken steps to designing and implementing related systems and procedures – which will further enhance its operations towards catering to the nation’s housing needs.

Hsbc strengthens itself

HSBC Holdings Plc has further strengthened the capital base of its UK subsidiary, HSBC Bank Plc, fulfilling its agreed commitment to the UK government’s banking sector scheme announced last week, through an equity injection of £750 million, representing one per cent of the total shareholders’ equity of the HSBC Group as at June 30, 2008.

The capital injection has been funded from the group’s own resources.

As previously announced, HSBC has no plans to utilise the UK government’s recapitalisation initiative. With a tier one capital ratio of 8.8 per cent and a loan to deposit ratio of 90 per cent as at June 30, 2008, the group remains one of the most strongly capitalised and liquid banks in the world. HSBC also continues to support efforts to stabilise the operation of financial markets and over the last few days has provided significant amounts of liquidity to the London Sterling interbank market, lending around £4 billion of three-month and six month money to other banks.

HSBC will continue to support the London interbank market, the bank said in a statement.

Utility payments via American Express

Ceylon Electricity Board in partnership with American Express recently added more locations at which utility bill payments can be made.

In April this year, the CEB permitted American Express as the exclusive credit card for utility bills payments, which was facilitated only at the CEB Head Office located at Sir Chittampalam Gardiner Mw, Colombo 1. CEB recently announced that payments are now also accepted at CEB outlets at R.A De Mel Mawatha, Colombo 3, YMBA Building – Borella, Grandpass Road, Colombo 14 and High Level Road, Colombo 5.

Commenting on this, Chief Manager - Cards and Consumer Assets at Nations Trust Bank, Lewie Diasz said, "We are delighted with our partnership with CEB and the increased facilities our card members may avail themselves to, as a result of this affiliation. American Express as a premium credit card has always strived to add value and convenience and we are pleased to enhance our offerings for the benefit of our card members."

American Express credit card members could also enjoy the facility of adding their CEB monthly bill payments to the Automated Bill Settlement facility which offers card members unique convenience in terms of settling their utility bills.

Commercial Bank provides inspiration for cancer patients

The serious dearth of information on cancer, one of the major causes of death in Sri Lanka has prompted a non-profit organisation and the country’s benchmark private sector bank to produce a DVD and a CD on veteran actor Henry Jayasena’s experience with cancer, to support and encourage cancer patients and their caregivers.

Titled Mage Kathawa (My Story), the documentary has been produced by the Mithuruwela Cancer Support Network, a registered non-profit organisation which promotes greater awareness and understanding of cancer with funding from the Corporate Social Responsibility Trust of the Commercial Bank of Ceylon PLC.

"There are many misconceptions about cancer that keep patients away from appropriate treatments. Increasing awareness among patients and caregivers will help to increase the survival rates," a spokesperson for Mithuruwela said.

Produced in collaboration with the Open University of Sri Lanka, the DVD and CD contain a 30 minute interview with Jayasena who elaborates on how he came to know about the cancer, how he obtained treatment and how he overcame the dreaded disease.

Commenting on this corporate social responsibility initiative, Commercial Bank’s AGM - Plan Implementation, Richard Rodrigo said that the challenge of modern business is not just to perform well financially well but to generate tangible benefits for different segments of society, especially those who are most disadvantaged and require empowerment immediately. "We extended our support to the Mithuruwela Cancer Support Network, identifying its valuable contribution to society," he said.

Henry Jayasena suffered from ‘Duke C’ (Stage 3) colon cancer in 1999 and underwent numerous treatments, including chemotherapy and radiation-treatment. His story will be important to other sufferers to encourage them not to lose hope.

"When faced with a serious illness such as cancer, most people first tend to go into a state of contradiction or doubt and think how and why such a thing could happen to them," says Jayasena in the interview. "They refuse to believe the reality of the situation and finally accept it, believing that it’s their karma." he says.

"There is a certain extent to which a doctor could help. What is important is to make up one’s mind and do what the doctors advise," continues Jayasena.

These CDs and VCDs are available free at Mithuruwela Centre and those who are interested can obtain a copy by sending their contact details to Mala Thalayasingam, No.70/1, Peterson Lane, Colombo 6 or to mithuruwela@gmail.com

Launched in 2005, Mithuruwela is a network of volunteers committed to providing a better understanding of cancer-causes, prevention, early detection, treatment regimes and services, and other aspects like coping mechanisms by sharing experiences and knowledge. It aims at helping patients and caregivers make informed decisions about dealing with cancer, so that they can look beyond the diagnosis and deal positively with the treatment and its after effects. The network works with a multi-disciplinary group of health professionals to set in motion a comprehensive plan of action.

The CSR Trust of the Commercial Bank empowers communities and individuals to help them become self-reliant and independent, to motivate people, to encourage individuals to think out of box, to capture and preserve heritage and folk wisdom. The Trust commenced with a start up capital of Rs 25 million and the bank contributes up to one per cent of its post tax profits every year towards it.

Recent CSR initiatives by the Trust include granting scholarships to undergraduates, building homes for the tsunami affected, assisting children’s homes, donating equipment and essentials to the Colombo National Hospital, refurbishing the Dental Clinic of Deniyaya Base Hospital and repairing the path-way to Sri Pada.

Fitch Affirms Merchant Credit of Sri Lanka’s Rating

Fitch Ratings Lanka has affirmed Merchant Credit of Sri Lanka Ltd’s (MCSL) National Long-term rating at ‘BBB (lka)’ reflecting the implied support assumed to be available from its main and ultimate shareholder, Bank of Ceylon (BOC, ‘AA (lka)’). The outlook is ‘Stable.’

The agency takes considerable comfort from BOC’s strength and its effective ownership of 88% of MCSL’s equity, as well as board influence through common directors. However, MCSL’s rating is constrained by its weak asset quality and low capitalisation which has resulted in poor solvency, Fitch has said in a statement.

MCSL’s core business is the provision of vehicle finance in the form of finance leases and hire purchase (HP) which together represented 75% of its asset base at FYE07. Historically, asset quality has been weak on account of poor monitoring.

Reflecting the impact of the challenging macroeconomic environment, the gross NPL ratio (NPLs are defined by Fitch as advances in arrears for more than three months) rose to 32.5% at FYE07 from 20.0% at FYE06 (14.5% at FYE07 from 9.9% at FYE06 at the six-month regulatory threshold).

Consequently, net NPLs/equity declined to 169.7% at FYE07 from 127.9% at FYE06 (46.0% at FYE07 from 39.7% at FYE06 at the six-month level). Following the institution of fresh management and an increased focus on recoveries beginning from H208, the gross NPL ratio improved to 28.5% (14% at the six month regulatory threshold) and the net NPL/equity ratio improved to 142.4% (43.3% at the six month level) at August 2008 from the respective ratios at FYE07.

The company’s profitability, as measured by ROA, increased to 2% in FY07 from 1.7% in FY06. This was supported by an expansion in net interest margins, reflecting the shift in the portfolio in favour of HP, but is still constrained by the NPL drag and high operating costs.

Funding from deposits decreased to 74.9% of the funding base at FYE07 from 82.1% at FYE06 due to the decrease in the deposit base by 15.4% in FY07. Deposit concentrations fell moderately, but remained high as the five largest deposits accounted for 18.1% of total deposits at FYE07 (FYE06: 23.5%). The capital base of LKR313m exceeded the minimum capital requirement of LKR200m with core and total capital adequacy ratios of 16.0% and 16.6%, respectively, standing above the minimum 5% and 10% threshold at FYE07, the statement further said.

MCSL is a registered finance company (RFC) that is effectively an 88% owned subsidiary of BOC, Sri Lanka’s largest bank that is also the primary bank to the State.

New chairman and CEO (designate) take office at Sampath Bank

Sampath Bank PLC – widely known as the ‘Sri Lankan banking revolutionary’ — welcomed its new Chairman, I.W. Senanayake and Chief Executive Officer (designate), Harris Premaratne with pirith chanting followed by the traditional partaking of milk rice at a ceremony held at the Sampath Centre recently.

The ceremony was attended by the board of directors, members of the corporate management and Sampath team members.

Indulakshin Wickramasinghe (Arthur) Senanayake was a founder director of Sampath Bank and was subsequently appointed deputy chairman from 1998. He is the fifth chairman of Sampath Bank since its inception in 1986.

He is also the chairman and chief executive officer of IWS Holdings (Pvt) Ltd – a diversified business conglomerate in Sri Lanka, and chairman, American President Line (Pvt) Ltd.

He is a past honorary trade representative for Singapore Trade Development Board in Sri Lanka.

Harris Premaratne was formerly senior deputy general manager of Commercial Bank, responsible for corporate and offshore banking, corporate finance, trade services and correspondent relations, overseas lending and recoveries. He has nearly 40 years of experience in the banking industry and is an Associate of the Institute of Bankers, London..

Prior to his appointment at Sampath Bank, he has held directorships at several Commercial Bank subsidiaries, and Sri Lanka Credit Information Bureau. He is also a director of Softlogic Holdings (Pvt) Ltd. and Asiri Hospital Group. He was also chairman, Technical Advisory Committee, Sri Lanka Banker’s Association.

Sampath Bank PLC is the fourth largest private commercial bank in Sri Lanka. By end 2Q, the bank saw its income grow by 28.9% year on year (yoy) to Rs. 5.3 billion, while operating profits for the period increased by 109% yoy to Rs. 337 million.

The bank in the first half (1H) ended June 30, 2008 saw income grow by 26.7% yoy to Rs. 10.3 billion, while operating profit in the period grew by 17.3% yoy to Rs. 639.1 million.

Sampath Bank envisions striving for greater heights in the banking and financial services industry – with innovative, avant-garde banking solutions and highest service quality - with their new heads at the helm.

Commercial Bank opens 168th branch in Pelmadulla

The Commercial Bank of Ceylon has opened its 168th branch in Pelmadulla, in a spacious building with ample parking facilities at No.17, Main Street, Pelmadulla.

The new branch is linked to all other Commercial Bank branches and the supermarket banking counters islandwide permitting online real-time banking. It is also equipped with an ATM linked to 324 ATMs of Commercial Bank, over 1,000 other ATMs locally and over one million ATMs belonging to the Cirrus and Visa networks worldwide.