State owned banking giant Bank of Ceylon (BOC) Chairman Dr. Gamini Wickramasinghe says he would resign from the bank on January 08, after President Mahinda Rajapaksa, whom he is related to, accepted his resignation which he had tendered last August.
"Since I took over in 2007, BOC’s profits, assets, deposits and trade have all grown more than three times. I have achieved all my targets so I have decided to resign. Another reason for my resignation is the Treasury’s inability to increase the bank’s capital. Without adequate capital the bank cannot reach greater heights, such as expand overseas. Each year, one third of the profit is ploughed back into capital and this would be enough to maintain the status-quo. Unaudited accounts for 2012 indicates a profit of Rs. 20 billion, no other entity in this country can come close to this. I have brought the bank to such a level that anyone (as chairman) can comfortably continue the good work," Dr. Wickramasinghe told journalists yesterday (01).
Dr. Wickramasinghe said BOC’s capital adequacy was well within the regulatory requirement.
"Without fresh capital it would be impossible for the bank to reach greater heights and realise its true potential. We submitted a proposal to the Treasury before the budget, suggesting methods that can be used which would not burden the Treasury or the bank, but unfortunately we did not get a favourable response," the BOC Chairman said not elaborating, although hinting at a bond issued up to US$ 500 million, which the bank was quite capable of achieving.
He said his resignation was tendered to President Mahinda Rajapaksa in August but agreed to stay on until a suitable replacement was found.
"My only request to the President was that a political henchman should not be appointed because this could unravel all that we have achieved. There have always been pressure from politicians for jobs and loans but we have always mitigated this and did things by the book, otherwise the bank cannot survive," Dr. Wickramasinghe said.
Media reports hinted at some friction between Dr. Wickramasinghe and the President’s son Namal Rajapaksa MP, allegedly over jobs or loans, which we cannot verify.
"He is a young politician and you know how young people are. He asked me a certain question and I gave him a suitable answer but that was that. There is no friction or problem between us," he said in response to a question whether his resignation had anything to do with Namal Rajapaksa.
Dr. Wickramasinghe said the only future for the bank was expansion overseas.
"If we expand domestically, smaller banks, and even some of the larger ones, could get hurt given our size and function. The only option is to invest in overseas expansion which would bring in foreign currency into the country.
"We had plans to open branches all over the world wherever a Sri Lankan community can be found, not just in the Middle East but in Europe and North America as well. We planned to increase our branch network in India. We had plans to be a regional player, providing third party banking services to Bangladeshis, Indians and Pakistanis. To do all this, we need more capital," he said.