Management Discussion and Analysis

Performance by Division

Support Services

In addition to the customer touch points of the Bank that were discussed earlier, there are a number of divisions providing support services to make the Bank’s operations efficient. These divisions are shown in the diagram given below.

Of these divisions, the initiatives undertaken by the Information Technology and Marketing divisions are detailed below:

Information Technology

During 2010, the Information Technology division actively supported banking operations and provided infrastructure for new initiatives while continuing to achieve global benchmarks.

In January, Information Technology along with e-Banking and the Card Centre achieved the prestigious international ISO/IEC 27001:2005 information-security certification. Commercial Bank remains the only Sri Lankan bank with this demanding certification, which confers a competitive advantage when dealing with overseas entities and multinational corporations. The achievement was recognised by the apex information-security body, Information Systems Audit & Control Association (ISACA), which gave the Bank a Bronze Award for organisational IT security and compliance. Continuing to raise the information security benchmark, IT supported the development and launch of chip cards by the Card Centre.

Margin trading and pawning, the two stellar products of the year, received strong IT support for product development and rollout. Through a review of product costing, lower-cost but robust infrastructure was provided to improve the profitability of pawning.

The world-class MIGS Internet Payment Gateway was formally launched with several customers coming on board and many more in the sales pipeline.

A data warehouse was commissioned, with reporting software that allows customer segmentation, up- and cross-selling and channel usage analysis. Product managers, Marketing and Priority Banking have all begun using this feature.

Channel bill payments processing was streamlined to enable real-time processing. Turnaround time for reviewing and processing corporate loan facilities was significantly reduced with the implementation of a new workflow and document management system. Customer convenience was increased through e-Exchange cash automation at branches and online Treasury Bills access for ComBank Online customers. A Customer Contact Centre was launched leveraging existing technology, with new services gradually being introduced to allow channel migration. The end of the year saw the installation of the Bank’s four hundredth ATM.

E-Statements were launched in Sri Lanka and Bangladesh adding to customer convenience, reducing cost and contributing towards ‘Green’ IT.

Financial reporting was enhanced with implementation of the Oracle EBS system for the Bank and its subsidiaries.

A productivity gain of an average of 3 hours per branch per day was achieved through the Covering Sanction project in conjunction with the recently established Central Credit Monitoring unit.

In Bangladesh, a much-anticipated intranet was launched.

Future Outlook

The plan for 2011 includes implementation of systems such as a trilingual menu-driven mobile banking system, an anti-money-laundering system, a loan origination system and other improvements.

Senior Management Team - Support Services

Palitha Perera
Head of Operations

Mrs. Sarojini Dunuwille
Head of Legal

Sanath Manatunga
Head of Credit Risk

Prasanna Indrajith
Head of Finance

Mrs. R.R. Dunuwille
Company Secretary

Vajira Thotagammana
Chief Manager - IT Operations

Sivam Yoganandasivam
Chief Manager - IT R&D

Amitha Munasinghe
Chief Manager - Information Systems Audit and Business Continuity Planning

S. Shanmugarajah
Chief Manager - ICBS Unit

M.Z. Careem
Chief Manager - Inspection

Stanley Fernando
Chief Manager - AML Compliance

Esala Silva
Chief Manager - Central Cash & Clearing

Bindu Perera
Chief Manager - Premises and Engineering


First Things First - Understanding the Customer

Putting the customer at the core, the Bank embarked on an exercise to understand formally what our customers need, want and desire from us. An elaborate research exercise partnered with the best market research agencies was conducted.

Our Brand Equity

The Bank is interested in having a formal measure of the brand equity, its drivers and its score relative to competition. We are pleased to note that the Bank had the best brand equity amongst our peer group. We also gained mathematically validated insights into the drivers of brand equity. These factors have equipped us to better understand our customer requirements and focus our activities in meeting them.

Our Customer Satisfaction

The Bank formally measured our customer satisfaction as per an international methodology that allowed us to benchmark ourselves to an international and national peer group. As expected we were pleased to see the results of the study that put us ahead of our peer group. We also clearly understood the drivers of customer satisfaction and were able to use the formal knowledge to drive various change management programmes through the Bank. Various aspects of service delivery were incorporated into our process excellence framework and product design.

Consolidating the Bank Brand

We continued to build our attributes of strength like safety, stability, excellence through the continuous adaptation of our historic ‘Best Bank’ campaign. This has been critical and core to our continued ownership of the critical attributes that a top banking brand requires.

We have progressively started phasing out product brands. The product brands have been replaced by a ‘Product nomenclature’ that effectively conveys the functional aspect of a product. E.g. ‘Housing Loans from Commercial Bank’ from the erstwhile ‘Nivahana Loans’. The nomenclature lends itself very well to usage across the 3 dominant languages of the country. In essence we now largely follow ‘Commercial Bank’ and product descriptor as a combination. We will thus focus on the brand equity of the Bank rather than the product.


Media played an important role in our marketing strategy for the year. We undertook a fresh look at our media processes and rationalised them. This helped us drive down media costs. We were able to undertake many media innovations that added to the overall media benefits that we got. An emphasis on media planning helped us to enhance the effectiveness of our media buys.

Recognising the Impending Shift in Consumption and Driving the Market

The Bank was able to foresee the spurt in pent-up consumer demand and low inflation after years of war. It will drive retail consumer demand and will fuel the need for retail loan products. Nevertheless, the retail consumption in the country is very price sensitive across product categories. The Bank took the lead to drive down retail lending rates in the sector, resulting in a major contribution being accrued to the Personal Banking division of the Bank.

Product Leadership

A highly empowered team of ‘Product Managers’ was formed along with a Product Development Committee. The formality in managing products brought forth many benefits. The Bank was able to be very efficient on our ‘Time to Market’, having the ability to adapt our products to the changing market quickly and having an ability to change pricing quickly. Further, the Bank was able to follow a more segmented approach in our products.

Alternate Channels

The Bank is very focused on promoting the alternate channels of delivery. These channels greatly add to customer convenience and reduce costs for the Bank at the same time. The re-launched website of the Bank quickly became a favourite online destination in financial services.

We ran several promotions to drive acquisition and usage of our Internet banking platform. We were able to significantly increase the active user base of Internet banking. There was a large and significant increase in the volume and value of the transactions on the Internet banking platform.

Debit and Credit Cards

Attractive consumer promotions were held on a periodic basis to promote the usage of Debit and Credit cards. These promotions were very well received by the consumers. We saw a good improvement in the POS usage of the Cards during the year. This also served as a means of driving new consumer acquisitions.

Several promotional campaigns were carried out targeting the remittances to the country. A combination of advertising and on ground promotions in our branches enabled us to garner the required deposit base.

Future Outlook

Sri Lanka is at a cusp of a transformation in its economic landscape. Such fundamental and large changes will mean that the banking sector which is at the heart of economy will itself change in terms of size and structure. Our Bank is equipped and ready to lead this change. Keeping the customer at the core of what we do, we will always maintain leadership in the sector.

In addition to Information Technology and Marketing Departments as described above, Human Resources function plays a vital supporting role in achieving the objectives of the Bank. Information on Our Human Asset including a broad spectrum of activities conducted during the year appears in the section on ‘Policy & Performance in Labour Practices and Decent Work Dimension’ on the Sustainability Supplement.

When the activities of the Bank are carried out as enumerated above, the Bank accumulates risk. However, the Bank’s comprehensive risk management infrastructure manages such risks as detailed in the Risk Management Report.

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