Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainability
• CSR
• Regional Development
• Financial Inclusion

Environmental Achievements

• Head office water consumption reduced by 11% compared to previous year
• Reduced paper usage by 12,677 due to automation of personal loan activation process

Social Achievements

• Siyath Saviya micro financing initiative saw significant expansion during the year. Total beneficiaries under this program now exceed 6,860, with total disbursements of around LKR 375 million.
• During the year, the company distributed coconut saplings to Micro Finance beneficiaries at Ampara District with a view to promote coconut plantation in the area.
• All staff from the three merging entities will be retained within the surviving entity, with zero redundancies.
• Several training programmes have already been conducted with the aim of developing skills necessary for post-merger operations

Governance Achievements

• Strengthened the Company’s governance and risk management frameworks, particularly in view of the amalgamation.

Climate Goals & Targets

Environmental Challenges

• Weak credit demand
• Controlled interest rates
• Deterioration in credit quality
• Adverse weather conditions which affected the country’s agriculture sector
• Rising non-performing-loans

Mitigation Strategies

• Adopted a focused and strategic approach towards our value creation process.
• Carefully formulated five strategic pillars
• Strengthening our monitoring and loan recovery framework, by setting up a dedicated recoveries division.
• Improving loan origination standards, in order to guarantee good credit quality.
• Implemented the specific action plan to ensure the business continuity during the merger process.

Supply Chain Management

Responsible Procurement

• Equal opportunities for suppliers through transparent procurement process at fair price, accommodate credit for supplier (eg: Term loan has provided for (ADSL))

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Integrated Reporting Framework, Global Reporting Initiative (GRI)-G4 Core criteria and Financial Service sector supplement

Third-party Assurance: SJMS Associates

Awards & Recognition

• “Gold Award” for the annual report 2013 in the leasing sector

Environmental Metrics

ESG Focus Areas

• Sustainability
• Employee Empowerment
• Customer Centricity
• Governance and Risk Management

Environmental Achievements

• Paper recycled 416 kg
• Reduced water consumption by 13%

Social Achievements

• Launched Siyath Saviya microfinance program supporting 24,000 entrepreneurs
• Refurbished Gynaecology Unit at National Hospital of Colombo
• High employee retention rate of 89%
• Invested Rs. 10 Mn in training, resulting in 20% increase in training hours

Governance Achievements

• Successfully implemented a core banking platform
• Strengthened credit appraisal mechanisms and recovery frameworks
• Maintained compliance with all relevant regulations

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic conditions (slow economic growth, subdued agriculture sector, rising interest rates, higher inflation)
• Weakening credit quality and rising delinquencies
• Increasing regulatory and compliance requirements
• Increasingly serious implications of climate change

Mitigation Strategies

• Strengthened credit appraisal mechanisms, collections, and recovery frameworks
• Improved digital capabilities
• Nurtured a performance-driven culture
• Curtailed exposure to unsecured lending
• Pursued aggressive growth in pawning
• Introduced KPIs and collection targets for credit recovery
• Implemented a formal customer complaint handling process
• Enhanced information security framework
• Increased employee awareness through ongoing communications and training

Supply Chain Management

Responsible Procurement

• National Procurement Guidelines
• Public tenders
• Independent third-party supplier selection

Climate-Related Risks & Opportunities

Physical Risks

• Erratic weather patterns

Transition Risks

• Not disclosed

Opportunities

• Lending towards renewable energy and green technology

Reporting Standards

Frameworks Used: GRI Standards, International Integrated Reporting Framework (IIRC)

Certifications: ISO 9001:2000, National Productivity Award

Third-party Assurance: BDO Partners - Chartered Accountants

Sustainable Products & Innovation

• Special leasing products for hybrid and electric vehicles

Awards & Recognition

• Asia’s Best Employer Brand Award 2017
• International Europe Award for Quality 2017
• Emerging Financial Institute of the Year 2017
• Best Service Provider in HR 2018
• 100 Top Global HR Minds 2018

Environmental Metrics

ESG Focus Areas

• Sustainability
• Governance
• Human Resources
• Information Technology
• Compliance

Environmental Achievements

• Reduced paper usage by 24% (from 29,990 kg to 22,693 kg)
• Increased paper recycling (though specific figures aren't consistently reported across the report)

Social Achievements

• Launched “Siyath Saviya” microfinance program supporting rural entrepreneurs
• Maintained a 94% employee retention rate
• Invested Rs. 7 million in employee training (24,356 total training hours)

Governance Achievements

• Implemented a cloud-based solution for improved operational efficiency and cost reduction
• Automated workflow in margin trading and end-of-day processes
• Strengthened credit evaluation and approval protocols, improved post-credit monitoring, and streamlined recovery mechanisms

Climate Goals & Targets

Environmental Challenges

• Economic slowdown due to Easter Sunday attacks and political uncertainty
• Decreased credit demand and pressure on deposit mobilization
• Substantial increase in NPL portfolio
• High cost of investing in new technology infrastructure

Mitigation Strategies

• Simplified operations and strengthened governance and accountability
• Invested in IT infrastructure (Rs. 60 million in Hyper Converged Infrastructure)
• Implemented a cloud-based solution and automated processes
• Selective lending strategy focusing on manufacturing and trading industries
• Strengthened credit risk management framework
• Diversified funding base through retail deposits
• Improved credit evaluation procedures

Supply Chain Management

Responsible Procurement

• Comprehensive Procurement Procedure and Policy manual

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core option, International Integrated Reporting Council’s (IIRC’s) Integrated Reporting Framework

Third-party Assurance: Auditor General of Sri Lanka (Financial Statements); Internal and external sources (Integrated Report)

Awards & Recognition

• Best Service Provider for SMEs at South Asian Business Excellence Awards 2019
• Best Service Provider for SMEs at Asia Leadership Awards 2019
• National Best Quality Software Award 2019

Environmental Metrics

ESG Focus Areas

• Sustainable finance

Social Achievements

• Launched MCash platform from Mobitel for digitalised loan and lease collection management to reduce carbon emissions.
• Continued to facilitate Work from Home capabilities and shift-based work flexibilities to the employees.

Governance Achievements

• Established a Board Committee on Information and Communication Technology and a Nominations Committee.
• Introduced a whistle-blowing policy.

Climate Goals & Targets

Environmental Challenges

• Difficult business environment from April 2022 due to macroeconomic deterioration, unsteady political milieu, sovereign downgrade, sharp depreciation of the rupee, fuel shortages, power cuts, import restrictions, hyperinflation, and political uncertainty.
• Extremely high-interest rate regime, decline in credit appetite, and constrained loan book growth leading to a decline in Net Interest Margins.
• Negative performance in the Bourse resulting in fair value losses and impairment provisions on the Margin Trading portfolio.
• Challenges in maintaining financial performance and healthy portfolio management.
• Rising inflation, declining household incomes, and receding disposable income impacting recoveries.
• Impact of rupee depreciation, import restrictions, and challenges on USD-denominated payments and operational costs.
• Severe impact on the second-hand vehicle market and decline in demand for leasing and loans.
• Limited access to customers due to socio-economic turbulences and fuel crises.

Mitigation Strategies

• Adapt, adjust, and innovate in the face of a difficult business environment.
• Prioritised liquidity management and maintaining capital buffers.
• Doubled efforts on recoveries and debt restructuring to provide customer relief.
• Prudent investment in technology and automation, managing efficiency and productivity, and inculcating a performance-driven culture.
• Invested in a new delinquency management system.
• Cost management strategies, realigned branch operations, and managed staff costs.
• Re-assessed and renegotiated fixed costs.
• Set up a dedicated complaint-handling unit and aligned the call centre.
• Phased re-pricing of loans and credit facilities.
• Proactive protocol for identifying stressed customers and focused credit restructuring.
• Completed the project to connect MBSL ATMs with the BOC ATM network.
• Customer-focused, humane approach to meet customer expectations.
• Debt restructuring programme with attractive settlement plans.
• Recovery camps with direct engagement with customers.
• Phased deposit mobilisation while maintaining portfolio profitability amidst rising costs of funds.
• Enhanced remote working capabilities and shift-based work flexibilities.

Supply Chain Management

Responsible Procurement

• Procurement of goods and services according to Government’s procurement policy.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards for Sustainability Reporting, Integrated Reporting Framework

Third-party Assurance: Auditor General of Sri Lanka

Sustainable Products & Innovation

• MCash platform