Standard Chartered Bank (SCB) which was at the centre of the oil hedging scandal involving the Ceylon Petroleum Corporation (CPC) told the Business Times this week that the Rs.9.2 billion loss from the hedging deal is a debt being carried by an overseas branch and not the Colombo branch.
Also current SCB Sri Lanka CEO Simon Morris who assumed duties in January 2010 has resigned and will be leaving towards the end of July 2010, according to a statement issued by the bank. Mr. Morris took over after former CEO during the hedging scandal, Clive Haswell was transferred. SCB said Mr. Morris has resigned after 25 years with the Bank to pursue other opportunities and that a suitable candidate will be identified and an announcement on the new appointment will be made shortly.
SCB Sri Lanka published its financial results for the year ended 31 December 2009 which shows a net loss of Rs.6.4 billion for the year, indicating a decline of 383% compared to a profit of Rs.2.2 billion for the previous year.
Provisions for bad and doubtful debts and loans written off increased by 3543% to Rs.9.5 billion from Rs.263 million in 2008.
SCB Sri Lanka noted that the post tax loss and the Capital Adequacy Ratio being below minimum requirements as at 31 December 2009 was exclusively due to the mandatory regulatory provisioning of Rs.9.2 billion (50% provision) made on account of past due receivables.
Subsequent to the reported Balance Sheet date, SCB Sri Lanka said the receivables were transferred off shore. Following the transfer, the regulatory provisioning made in 2009 was reversed.
The consolidated profit and loss accounts for the year ended 31 December 2009 shows increased profits for the year of US$3.4 billion over US$3.3 billion the previous year.