The Bank of Ceylon (BOC), shortlisted by the Colombo Stock Exchange (CSE) to receive a stockbroking licence, is set to incorporate a trading firm with the intention of publicly listing it on a later date. “We will incorporate the company soon and list it in the CSE at a later date,” its chairman Gamini Wickremesinghe told the Business Times. BOC, the largest state bank in terms of assets has a 20% stake in Lanka Securities, another stock broker.
Wickremesinghe also said that the BOC is now more focused on investments, which are currently being done by BOC’s Investment Banking Division (IBD). “BOC has allocated Rs. 10 billion to invest and we will be doing active share trading in the CSE,” he said.
He noted that BOC plans to float the IBD later as a separate firm. “Through the IBD, BOC is planning to fund different projects – especially hotels, power projects, etc. We may take some equity in hotel projects. Windmills in the power sector is something that interests us.” He said now BOC is seeing a demand for business loans – especially from small entrepreneurs in the tourism sector.
BOC is also planning to launch a dollar denominated debenture in a bid to expand its subsidiary, BOC – UK . “We want to establish about three or four more branches in the UK and we’re looking at some expansions (branches) in India ,” Dr. Wickremasinghe added. He said in the event that GSP + is lost, BOC will not be affected as only small to medium garment firms have borrowed from the bank.
He noted that the continuous inflow of foreign remittances could be better attracted with certain revisions to the monetary law, which in turn could also facilitate the government’s development efforts. He said that the bank is promoting the concept of a Duty Free City to be included in the upcoming budget and will also propose VAT retention in all banks for a five year period to facilitate lending to the small and medium sector.