By J.A. Fernando in Colombo
Colombo, 16 March, (Asiantribune.com):
Seylan Bank PLC, after reporting a tremendous turnaround in its performance over the past two years, achieving 126% profitability on 2009, on March 15 announced the launch of the removal of 250 employees under the proposed Voluntary Retirement Scheme.
A statement by the bank said that the bank has benchmarked the industry standards and identified that it has excess staffs.
“Therefore, in its endeavor to increase efficiency across the board as well as to align itself with the best industry standards and performance indicators, Seylan Bank today (15) launched a VRS scheme open to 250 of its 3600 employees.” The statement said.
Meanwhile just two weeks after the appointment, the newly appointed General Manager / Chief Executive Officer of the Seylan Bank PLC, Kapila Ariyaratne said that, “We greatly value the quality and the commitment of our staff and this VRS is solely for the purpose of enhancing the value that we intend to deliver to all our stakeholders.” Adding that it is also a generous package, which is significantly better than the minimum requirement that the bank had to meet.
“The introduction of this VRS is linked with a series of strategic measures. These include an investment in advanced technology, organizational restructuring and employee job enrichment and engagement processes by benchmarking international best practices from within and outside the country. There would also be further investment on continuous staff training and development”, the newly appointed CEO Ariyaratne had further outlined.
The move was described as a strategy to develop its future business policies and to deliver even greater results to all stakeholders and add further shareholder value by aligning itself to the exciting new opportunities in the rapidly transforming local economy according to Seylan Bank’s top management.
Back in 3 March 2011, Asian Tribune reported that Seylan Bank PLC which underwent a successful restructuring during the last two years had decided to reduce 250 employees from its cadre under uniform Voluntary Retirement Scheme for all employment categories in a stock exchange filling.(http://www.asiantribune.com/news/2011/03/02/sri-lanka-seylan-bank-reduce...)
In the filling to stock exchange, Seylan Bank said that a sum of Rs.700 million is expected to be incurred for the proposed Voluntary Retirement Scheme, while the bank has also obtained the consent of the Commissioner of Labor-Industrial Relations and propose to offer the said scheme in March 2011.
‘The decision has become necessary in order to reduce the cost in the long term, ” the Bank said in its statement to Colombo Stock Exchange that time.
Reports outline that back in 8 October 2010, former long served Chief Executive Officer of the Seylan Bank PLC, Ajita Pasqual had said that Seylan Bank, which was planning to save up to 750 million rupees per year from axing 1,000 staff is re-strategizing to use existing staff to reallocate and fill in new vacancies.
"Seylan Bank will not go ahead with the VRS (volunteer retirement scheme)," Ajita Pasqual, reported to have said to media that time, adding the bank instead will re-allocate and staff and cut down on new recruitments.
The comments from Pasquel came after Seylan Bank suggested in July 2010 that it would offer a VRS to shed up to 1,000 jobs to cut operational costs. The VRS at that time expected to reduce Rs.750,000 per staff member per year. Reports highlighted that in July 2010 the bank had 3,726 staff under its payroll.
However, in December 2010, Seylan Bank in another filling to stock exchange said that as per statutory examination, as at 31 December 2008 and banking act Determination No.3 of 2010 assessment of fitness and propriety of officers performing executive functions in licensed commercial banks, it has decided to cease the then General Manager/ Chief Executive Officer, Ajita Pasqual from holding office from 30 December 2010 followed by the Central Bank’s directives on 24 November 2010.
“In order to ensure a smooth transition of duties Ajita Pasqual will continue to function in the capacity of consultant to the bank until 29 December 2011, ” the bank said in its statement. Meanwhile as per industry sources Seylan Bank is still keeping its former CEO as a consultant to review and recover the loans that were given to nearly hundreds of subsidiaries of Ceylinco Group when it was under Ceylinco umbrella.
On another development, Seylan Bank on 28 October 2010 informed stock exchange that it is hoping to issue 2 million Rated Unsecured Redeemable Debentures with agents as NDB Bank through a private placement at Rs.1000 each to the tune of Rs.2 billion while the application will be submitted to Securities and exchange Commission of Sri Lanka.
Then again Seylan Bank also informed stock exchange on 28 February 2011 that it is intending to raise Rs.4.691 billion through rights on the basis of 1 for 3 ordinary voting shares at Rs.75 per share (total 43.33 million rights) and 1 for 3 ordinary non-voting shares at Rs.35 per share (total 41.186 million non-voting rights).
The bank further said it is raising Rs.4.691 billion through rights primarily to increase Tier 1 Capital as per Central Bank rules to mobilize long term funds to match long term lending and to facilitate future restructuring and expansion of the entity. It said Seylan Bank’s current capital is valued at Rs.5.567 billion to date.
Earlier back in 26 August 2010 Seylan Bank also said that it is intending to list 3,390,100 non – redeemable, non cumulative, non convertible and non-voting preference shares through a introduction on Colombo Stock Exchange while later it was informed on 28 September 2010 that the application for such a listing was withdrawn.
On the contrary again on 11 March 2011 bank said that directors had resolved to amend the terms of 3,390,100 fully paid preference shares of Seylan by reclassification and re-designation of such shares as redeemable, non-cumulative, non convertible and non-voting preference shares for the consequential redemption of the said share on a specific date and at a reasonable price.
Bank further said it needs a suitably qualified person who has no interest in the company to fix the reclassification and re-designation of the Seylan bank’s above fully paid preference shares.
It further said that thus bank needs to amend article 5 (II) of the company’s Articles of Association subject to the approval of the Monetary Board of the Central Bank and shareholders of the company.
Sri Lanka’s financial market watchdog Central Bank appointed a new board to run former Ceylinco owned Seylan Bank in 2008, followed by a run-on-deposits that burst out in the wake of Golden Key Credit Card fiasco, which defaulted nearly Rs.26 billion rupees of public deposits resulting in Sri Lanka’s foremost Ceylinco Group’s financial entities to collapse overnight.
Later Central Bank called to infuse fresh capital via a private placement and a allotment of shares to existing shareholders to the Seylan bank and state controlled BOC (Bank of Ceylon), SLIC (Sri Lanka Insurance Corporation) and EPF (Employees Provident Fund) came in to rescue acquiring nearly 30% stake in Seylan, while Browns group owns 9.55%, LOLC Investments owns 9.55% and Dr. T Senthilverl own 10% voting shares of the bank.
- Asian Tribune -
Go To Link: http://asiantribune.com/news/2011/03/15/sri-lanka-seylan-bank-begins-removal-250-employees-under-vrs