Sri Lanka is a country with signs of resilience and recovery after years of economic turbulence. With credit growth improving and inflation stabilizing, Pan Asia Bank is optimistic about the future, explains Pan Asia Bank’s Gayanath De Silva, Deputy General Manager of Credit. Through a strategic approach that includes fostering long-term partnerships and expanding credit operations, Pan Asia Bank aims to support broader economic growth by focusing on SMEs and corporate and critical economic sectors that will drive growth.
What is your outlook for the Sri Lankan economy and the credit landscape in the coming year?
Sri Lanka has shown great resilience, having endured over 30 years of war, the Easter attacks, COVID-19, and the recent economic crisis. Currently, the situation is stabilizing. Credit growth has improved steadily, and inflation is now within the projected range. The credit environment is gradually recovering, as seen in the increased credit growth in the last quarter. The exchange rate is more stable, and interest rates have decreased, which could lead to more credit demand in the future, assuming these conditions persist.
From Pan Asia Bank’s perspective, we are optimistic about the credit growth. The stabilization of the exchange rate and lower interest rates suggest potential growth in credit demand. However, sectors such as construction and tourism still need rehabilitation and investment, as these are critical for the economy. Once these sectors recover, the economic benefits could spread to other areas, further stabilizing the overall economy. Additionally, with Sri Lanka’s credit rating expected to improve in the future, internal and external credit appetite is expected to grow.
Could you elaborate on Pan Asia Bank’s strategy in the vertical under your leadership? What are the key sectors you are looking at for growth?
I oversee the retail, SME, and corporate segments, focusing on driving credit growth. We have established a strong market share in the retail sector and given the positive economic outlook, our focus has shifted to the SME and corporate sectors.
For SMEs, we’re concentrating on export-oriented businesses and have already built a robust portfolio. In 2023, we’ve outperformed some government and private banks in this area, which shows our established presence. Moving forward, we aim to expand our SME portfolio, especially in the export and import sectors, anticipating a boost when import regulations are relaxed.
For the corporate segment, our priority in 2025 is to cultivate our portfolio in local and foreign currencies. We’ve set our plans and have already started working towards these goals. By 2025, we aim to significantly expand our SME and corporate books to new heights.
How does Pan Asia Bank plan to contribute to the broader economic recovery and growth in Sri Lanka, particularly through its credit operations?
Currently, Pan Asia Bank’s strategy for contributing to Sri Lanka’s economic recovery focuses on diversification and building long-term relationships in both the corporate and SME sectors. Instead of simply financing individual assets, we are aiming to foster enduring partnerships with businesses, a significant strategy for 2025.
We have already begun initiatives in distressed industries like tourism, conducting training initiatives for entrepreneurs and hoteliers to help stabilize and grow their businesses.
We aim to expand in the corporate sector by targeting larger, more established companies. This includes partnerships with real estate agents to provide housing loans and support for project financing. Through these efforts, Pan Asia Bank intends to support both businesses and broader economic growth in Sri Lanka.
In what ways does Pan Asia Bank’s credit strategy impact the current state of the domestic environment, regulatory changes, and global market developments?
Pan Asia Bank’s credit strategy adapts to current domestic obstacles, regulatory changes, and global market developments by turning constraints into opportunities. For instance, restrictions from the Central Bank, like single borrower limits and related party restrictions, are seen not as obstacles but as opportunities to explore untapped businesses. With the single borrower limit set to be reduced, Pan Asia Bank is poised to step in and facilitate this with tailored solutions to meet these emerging needs. We’re particularly interested in engaging with large conglomerates and listed companies that may have exhausted their credit limits with other financial institutions.
We are also expanding our focus beyond domestic markets. We have established relationships with international entities like the IFC and leading lending institutions, participating in syndicated loans to diversify our assets profitably. This approach helps us access low-cost funding, giving us a competitive edge in the market. These strategies are designed to grow our asset base while ensuring sustainability and profitability.
Given your extensive experience of over 34 years in banking across various domains such as corporate credit, SME, project finance, syndication, and advisory services, how do you envision your role at Pan Asia Bank in driving the bank’s credit strategy forward?
I began my career in consumer banking and SME portfolios, which gave me foundational insights into retail banking. I then spent 13 to 14 years in the Middle East, focusing on project finance, syndication, and corporate lending. Upon returning to Sri Lanka in 2017, I gained a deeper understanding of the local corporate and SME markets, learning how different entities operate and respond to market conditions, especially during the pandemic.
My extensive experience across retail, SME, corporate banking, project finance, and syndication equips me to drive Pan Asia Bank’s credit strategy. I have already facilitated several syndications with overseas lenders and engaged with large corporate clients, bringing substantial business to the bank. While uncertainties remain, I am optimistic that my background will significantly benefit Pan Asia Bank, particularly in areas like long-term funding and project finance, including clean energy projects. Additionally, a key priority for me at Pan Asia Bank is building a strong, knowledgeable team capable of continuing our strategic growth.