Fitch Affirms Bank of Ceylon Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) at ‘BB-’ with a Stable Outlook

01st April 2013, www.ft.lk

Fitch Ratings has affirmed Bank of Ceylon (BOC)’s Long-Term Foreign Currency and Local Currency Issuer Default Ratings (IDRs) at ‘BB-’ with a Stable Outlook.

It has also affirmed BOC’s Viability Rating at ‘b+’ and its National LT rating at ‘AA+(lka)’ with a Stable Outlook. BOC’s Support rating and Support Rating Floor have also been affirmed at ‘3’ and ‘BB-’ respectively, the latter at the same level as the sovereign.

Fitch has also assigned BOC’s proposed senior unsecured USD-denominated notes an expected rating of ‘BB-(EXP)’, same as its FC IDR given that the notes are expected to rank equally with the bank’s senior unsecured creditors. The proposed notes will have a maturity of five years, while semi-annual coupon payments will be at a fixed rate. The final rating is contingent upon receipt of final documents conforming to information already received.

BOC’s LT IDRs are driven by the Government of Sri Lanka’s high propensity and limited ability to provide support to the bank under extraordinary situations. In Fitch’s view, the State’s high propensity stems from BOC’s systemic importance as the largest bank in the country (accounting for nearly 20% of banking system deposits and assets), its quasi-sovereign status, its role as a key lender to the Government and full Government ownership, while the State’s limited ability is reflected in the ‘BB-’/Stable Sovereign rating.
BOC’s VR – which is one notch lower than the LT IDR – reflects the growing pressures particularly in terms of its weakening capitalisation and deteriorating asset quality, which may experience further deterioration in the near term. While BOC’s strong domestic franchise remains a strength from a funding perspective, near-term funding challenges will likely remain, considering the high loans-to-deposits ratio (LDR) amid rising interest rates.

BOC’s loan book has a high exposure to the State and State-Owned Entities (SOE) and while a sizeable portion of the exposure is State guaranteed, the resulting concentration risk is significant.
For example, Ceylon Petroleum Corporation itself accounts for nearly 20% of BOC’s total exposure. Notwithstanding State exposures, BOC’s gross non-performing loan ratio weakened to 2.8% (FY11: 2.1%) in FY12 owing to one-off event risks such as floods and drought (in Q412) and the Maldives’ political turmoil.

BOC’s capitalisation (Tier 1 Capital Adequacy Ratio, 2012:9%, 2011:9.3%) – which is already impacted by high dividend pay-outs (FY12: 38.4%, FY11: 34%) – has been steadily weakening. High loan growth, deteriorating net NPL-equity (FY12: 15%) and the absence of fresh capital injection since 2007 remain the key reasons.
While slowing loan growth and higher SOE exposure (zero risk weight for State guarantee) may help BOC to negotiate the difficulty in the interim, timely capital injections from the State remain critical to BOC’s future capitalisation.

The dip in BOC’s low-cost deposits ratio (FY12: 44%, FY11: 51%) was broadly in line with the industry trend. Given the intense competition for deposits and high credit demand from the State, Fitch believes that BOC’s endeavour to reduce its LDR to around 90% may not be possible in the near term.
Any change in Sri Lanka’s Sovereign rating or the perception of State support to BOC could result in a change in BOC’s IDRs and National Ratings. Visible demonstration of preferential support for BOC will be instrumental to an upgrade of its National LT Rating.

The VR remains under pressure and could be downgraded if a sharp asset-quality downturn is not complemented by timely recapitalisation from the State. An upgrade to VR, though unlikely in the near-term, will be triggered by consistent improvement in both asset quality parameters and capital levels and supported by BOC’s ability to lower loan-deposits ratio overtime.
BOC is the largest bank in terms of assets in Sri Lanka and has a wide domestic presence across Sri Lanka. BOC has 13 subsidiaries and five associates and has branches in Chennai, India and Male (Maldives); and a fully-owned subsidiary, Bank of Ceylon (UK) Ltd, in the UK.

FT Quick Take -  A full list of BOC’s ratings:

Long-term Foreign- and Local-Currency IDRs: affirmed at ‘BB-’; Outlook Stable
Viability Rating: affirmed at ‘b+’
Support Rating: affirmed at ‘3’
Support Rating Floor: affirmed at ‘BB-’
USD senior unsecured notes: affirmed at ‘BB-’
Proposed USD senior unsecured notes: assigned at ‘BB-(exp)’
National Long-Term rating: affirmed at ‘AA+(lka)’ ; Outlook Stable
Outstanding subordinated debentures: affirmed at ‘AA(lka)’.

Related Info :

• Sri Lanka's Bank of Ceylon to Sell US$ 500mn Bonds in International Market. UBS to Manage the Sale

• Sri Lanka's BOC Bank to Sell $500mn Bond in the First Half of 2012

• Fitch and Moody's Upgrade Sri Lanka's Sovereign Rating due to Key Factors

• Listed Firms in CSE Issue Debentures to Raise Big Sums Following Budget 2013 Concessions on Corporate Debt

Sri Lanka's Bank of Ceylon to Sell US$ 500mn Bonds in International Market. UBS to Manage the Sale

28th March 2013, www.lankabusinessonline.com

Sri Lanka's state-run Bank of Ceylon would sell plans to sell between 300 to 500 million US dollars of bonds in the international market, a media report said.


Bloomberg newswires said UBS has been hired to manage the sale.

Fitch Rating has given a BB- expected rating to the securities which will have a tenor of five years.

Last year the Bank of Ceylon raised 500 million US dollars from international markets.

State-run National Savings Bank is also expected to go the international markets this year.


Related Info :

• Sri Lanka's BOC Bank to Sell $500mn Bond in the First Half of 2012

• Sri Lanka’s Bank of Ceylon Raises $175mn Syndicated Loan from Middle East & Asian Banks

• CITICORP Sells Rs1bn UDA Debentures to BOC in a Land Mark Deal

Yalpanam Dairy, Kilinochchi, Launched by BoC & Cargills. Project Creates New Opportunities in Northern Sri Lanka

19th January 2012, www.dailynews.lk, By Sanjeevi Jayasuriya

The Yalpanam Dairy Ltd, a joint venture between the Bank of Ceylon (BoC) and Cargills Ltd was launched yesterday.

Chief guest of the event Central Bank Governor, Ajith Nivard Cabraal said that projects of this nature should be encouraged as they would help to breach regional disparities. He also said that these projects would help conflict areas to return to normalcy sooner than expected.

He also said that these projects create new opportunities and also help people to obtain gainful employment The joint venture will first function as a milk collection centre and it would soon be upgraded to a processing plant.


One of the biggest advantages of this project is that the supply and demand situation is equally met with adequate supply of fresh milk and a readymade market being created through Cargills outlets.

Bank of Ceylon Chairman Dr. Gamini Wickramasinghe said that they are now planning to expand this project and is looking at importing a ship load of milch cows from India to be given to farmers in the area in a bid to increase capacity.

"We are also looking at promoting organic farming in the area," he added.

Central Bank Governor Ajith Nivard Cabraal and BoC Chairman Dr Gamini Wickramasinghe hand over a cow to a dairy farmer in Killinochchi at the foundation laying ceremony of the Yalpanam Dairy Industry. Image Courtesy : www.island.lk, Pic By Sajith Jayasekara.

Sri Lanka's BOC Bank to Sell $500mn Bond in the First Half of 2012

04th January 2012, www.lankabusinessonline.com

Sri Lanka's state-run Bank of Ceylon, the island's largest lender is looking to sell a 500 million dollar bond in the first half of this year chairman Gamini Wickramasinghe said.

"It will be during the next three to four months," he said. "The bond will be rated."
Bank of Ceylon has been one of the most prolific banks to go to international markets. It has previously raised money through syndicated loans.

Last month the bank raised 140 million dollars from UAE based Mashreq Bank.

Bank of Ceylon had gross assets of 779.1 billion rupees (6.8 billion US dollars) by end September 2011 and net assets of 31.45 billion rupees (276 million US dollars).

In the nine months to September it earned profits of 6.78 billion rupees (59 million US dollars.

It is rated AA+(lka) by Fitch.

Sri Lanka's central bank has urged banks to borrow abroad using the benchmarks set by government bonds.

In 2012 the central bank is expecting one billion dollars in Tier II capital to flow into banks from abroad.

Related Info :

• Sri Lanka’s Bank of Ceylon Raises $175mn Syndicated Loan from Middle East & Asian Banks

Sri Lanka’s Bank of Ceylon Raises $175mn Syndicated Loan from Middle East & Asian Banks

08th April 2011, www.news360.lk

Sri Lanka’s Bank of Ceylon has raised US$ 175 million via a syndicated loan to finance its short term funding requirements and also for trade finance related needs.

The loan which was raised in the international market has been arranged by Mashreqbank PSC of Dubai.

Fifteen banks, predominantly coming from Gulf Corporation Council and Asia have subscribed to this issue.

Bank of Ceylon says, initially the plan was only to raise US$ 100 million, but it was increased to US$ 175 million owing to the huge demand from the buyers.

The state Bank issuing a statement said, “This is the first instance in which a Middle East based International Bank arranged a syndicated loan facility for Bank of Ceylon”.

Mashreqbank is one of the leading financial institutions in the United Arab Emirates and is listed in the Dubai Stock Exchange BOC says it was also able to tap a whole set of new investors through this syndication loan.

The loan agreement with the relevant banks has been signed yesterday at the Bank of Ceylon premises.

Sri Lanka's Bank of Ceylon Takes Stock Trading to Rural Areas with stock brokers, Lanka Securities

08th April 2011, www.asiantribune.com, By H D Herat-Senewiratne

It is reported that only few people in the Sri Lankan community are actively involved in the stock market business especially in the Western Province and few other metropolitans outside the Western Province and it is due to lack of awareness and minimum access for rural people to enter into this type of alternative investment avenues.

Most people still earn incomes through traditional methods such as investing in treasury bills/bonds and banking other than investing in the stock market.

Many are unaware of the stock trading which is more lucrative than any other money making business, with the currently low interest rates, a stockbroker told the Asian Tribune .

Recently, Bank of Ceylon (BoC) took a giant step by signing a contract with a stock brokering company Lanka Securities (Pvt) Ltd to promote and to take stock brokering business into rural areas through its 307 bank branches and 160 extended offices through their network.

“At present, the stock market business is mainly confined to main cities especially in the Western Province and few other places outside the Western Province. Therefore with this agreement we could be able to promote the stock trading business island-wide more effectively and efficiently, it Deputy General Manager (Investment) P.A Lionel told the Asia Tribune.

He said the purpose of this move is to educate the public on the alternative investment avenues and to facilitate and promote the stock market business among the rural masses through its branch network. Initially, this service would be available in 250 BoC - Super Grade and A-Grade branches, “With the passage of time we will be linking with all branches and extended officers to promote this business island-wide, Mr. Lionel said.

Mr. Lionel said that promoting stock brokering business in rural areas through stock brokering firms is not viable other than this method. Therefore, they are now in the process of training special officers on this subject to house in their respective branches.

“The people have a lot of trust and confidence with BoC therefore we could promote the stock brokering trading/brokering through Bank of Ceylon network in the future, “he said.

Lanka Securities (Pvt) Ltd provides Equity Trading, Strategic Deals, Privatization arrangements and Corporate Finance related services. The company also boasts of a highly experienced and dynamic Sales team specializing in servicing both local and foreign, retail, high net-worth and institutional clients.

Further, the company has a fully automated and integrated front office, research unit and a back office supported by an up to date database and an efficient IT division. Hence, it ensures that trades are executed in an efficient manner, with maximum speed and accuracy.

Lanka Securities (Pvt) Ltd firmly believes in aggressive but responsible marketing strategies to ensure total customer care and satisfaction, its sources said.

Lanka Securities (Pvt) Ltd is a joint venture Stockbroking firm with First Capital Securities Corporation (Pakistan), Bank of Ceylon and Merchant Bank of Sri Lanka. The BoC together with Merchant Bank owns 49 percent shares of Lanka Securities. This company is a licensed member of the Colombo Stock Exchange is operating in the Sri Lankan Equity market.

New Incoterms 2010 International Commercial Terms Highlighted by Bank of Ceylon for its Customers

31st January 2011, www.dailynews.lk, By Gayan Kanchana

Sri Lanka needs to improve awareness on International Commercial terms (Incoterms) to facilitate trade industry, an expert said. Bank of Ceylon (BoC) Corporate Branch Trade Division last week held a seminar on recent changes on Incoterms for its customers in Colombo.

The speaker at the seminar was BoC Trade Services Chief Manager Ranjith Haputhanthri.

International Commercial terms (Incoterms) are a series of international sales with terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions.

These are accepted by Governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade.

Haputhanthri said, "In the past Incoterms has often been used incorrectly during contract negotiations."

The buyer and seller often chose Incoterms that do not fit with the agreements, way of transportation. Since the last revision of the Incoterms 2000, the process of international transportation has been developed due to the new techniques of transport, numerous modernizations and commercial practice as well.

"Two new Incoterm rules (DAT) Delivered at Terminal and (DAP) Delivered at Place have replaced the Incoterm 2000 rules (DAF) Delivered at frontier, (DES) Delivered Ex-Ship, (DEQ) Delivered Ex-Quay and (DDU) Delivered duty unpaid. The number of Incoterm rules has been reduced from 13 to 11. This has been achieved by substituting two new rules that may be used irrespective of the mode of transport. Under both new rules delivery occurs at a named destination.

Under DAT at buyer's disposal but ready for unloading," he said.

Haputhanthri said so far Incoterm rules have traditionally been used in international trade. Incoterm 2010 rules formally recognizes that they are available for application to both international and domestic trade. Before Incoterms 2010 rules it would find a guidance note.

The guidance note explains the fundamental of each Incoterms rules when it should be used, when risk passes, how costs are allocated between seller and buyer, the guidance notes are not part of the actual incoterms 2010 rules but are intended to help the user to select the appropriate Incoterm rule for the particular transaction.

"Sometimes parties want to alter an Incoterm rule. The incoterm 2010 rules do not prohibit such alterations.

But there are dangers in so doing. In order to avoid unwelcome surprises the parties should make the intended effect of such alterations extremely clear in their contracts," he said.

Related Info :
• The new Incoterms® 2010 rules - Your essential tool to ensure correct application of the Incoterms® rules in global and domestic sales transactions

Bank of Ceylon to Open a Branch in Mumbai, the Financial Hub of India

27th January 2011, www.news360.lk

Bank of Ceylon is planning to open up a branch in Mumbai to capture a slice out of the cities growing financial market.

A Senior Official of the Bank said “Mumbai is the financial hub of India and we want to be there”.

He added having a presence in the City of Mumbai which has a population of 14 million and a sound banking system with the presence of Global financial firms is vital for the BOC.

The Bank believes the presence in India’s Commercial capital is important in the longer run.

Apart from the Mumbai Branch, BOC is also planning to open another 2 branches in Tutricorin and Rameshwaram.

The Official added, Tutricorin is important for BOC as the proposed ferry service between Colombo and Tutricorin is expected to generate lot of trade activities between the 2 nations.

A Branch in Rameshwaram aims to target the Sri Lankan’s living there.

BOC already operates a branch in Chennai, which the official added has brought in lot of businesses to the Bank.

“Lot of imports from Chennai is reaching Colombo Fort on a regular basis” added the Bank Official.

This has resulted in the Banks Chennai units Trade Finance business growing.

According to the Indian Banking regulation, opening up of a branch in India needs US$ 25 million as capital requirement.

Related Info :
• Bank of Ceylon Establishes a Fully Fledged Investment Banking Arm

Bank of Ceylon Establishes a Fully Fledged Investment Banking Arm

05th December 2010, www.news360.lk, By Prasanna C. Rodrigo

Sri Lanka’s state run Bank of Ceylon has established a fully fledged investment Banking arm to provide multiple of services for both the Corporate and the Government entities.

BOC announced today that its newly established investment arm is ready to provide services such as corporate advisory, structured products, Mergers and Acquisitions, handling of Debenture issues and also IPO’s.

Apart from that it is also armed with the expertise to provide services for investors, private Equity funds and Fund Managers.

Earlier the BOC handled similar activities via its Treasury division.

The DGM of the newly established unit P.A. Lionel said “The new unit is totally dedicated to Investment Banking”.

The Bank has recruited around 3 to 4 professionals from the private sector who is well verse with Investment Banking.

The DGM Lionel added “During the 1st quarter of 2011 we will expand the unit”. He said new additions will be brought in to strengthen the unit.

Aitken Spence, JKH, Cargills Interested in Grand Oriental Hotel in Colombo, Sri Lanka

05th December 2010, www.sundaytimes.lk

John Keells Holdings, Aitken Spence and Cargills Ceylon are among local and foreign firms that have expressed interest following a public advertisement inviting a management partner for the Bank of Ceylon-owned Grand Oriental Hotel (GOH), according to hotel industry sources.

A source close to GOH told the Business Times that Singapore’s Raffles, four Indian hotel chains, Midddle East investors and European ones have also sent their Expressions of Interests (EOIs) to the Bank of Ceylon (BOC).

He added that Raffles had expressed an interest in managing GOH a couple of years ago, further adding that the applicants are requesting the entire complex of buildings starting with GOH up to the Seylan Bank end.

Gamini Wickremasinghe, Chairman BOC told the Business that 26 firms have sent EOI. “We are looking at a management contract deal with an investor who can spent for refurbishment as well on this 200-room heritage hotel,” he said but declined to comment on the applicants.

Related Info:
Colombo's Grand Oriental Hotel to Lure Ship Passengers Again

Colombo's Grand Oriental Hotel to Lure Ship Passengers Again

02nd December 2010, www.lankabusinessonline.com

Big Sri Lankan operators and international chains have responded to a call to restore the original charms of a colonial-era hotel overlooking Colombo port once popular with visitors who came by ship, an official said.

"We want to bring it back to its original form," said Gamini Wickemasinghe, chairman of state-owned Bank of Ceylon which is seeking an international hotel chain to manage its subsidiary, Grand Oriental Hotel (GOH).

The hotel is a landmark built during British times just outside Colombo harbour and served passengers who came by sea before commercial air travel was available.

The original building was built in 1837 and is "within sight and sound of Colombo Harbour", according to the GOH website.

"The GOH was most popular not only with ships' passengers but also with the Colombo City residents, as the hotel had acquired a reputation for ballroom dancing . . .," it said.

Wickremasinghe said that in future with more cruise ships calling at the Colombo port following the end of the island's war the hotel will cater to cruise passengers as well.

Sri Lanka is experiencing a tourism boom with a sharp upturn in visitors following the end of its 30-year ethnic war in May 2009.

The Bank of Ceylon had called for proposals from an international hotel chain to invest in and manage the GOH which has a capacity of 200 rooms.

Bank of Ceylon said it wanted investors with past experience in managing international hotels preferably heritage hotels.

A part of the building now occupied by the Bank of Ceylon offices will be vacated soon.

Wickremasinghe said the national police headquarters located next to the GOH will also be shifted, making more space available for the hotel, including its original car park.

"We got quite a lot of responses for our call for expressions of interest," he told LBO.

"All the big players in Sri Lanka and some big international players responded, including a lot from India."

The hotel upgrade is likely to cost around a billion rupees and is likely to include the addition of a swimming pool.

Wickremasinghe also said they would like to raise room rates after the upgrade and would be looking to charge around 250 US dollars a night.

Related Info:
170yr Old Grand Oriental Hotel (GOH) in Colombo to be Refurbished Following a Management Contract

Sri Lanka UDA Debenture Issue Closes after Rs11bn Bids

28th September 2010, www.island.lk

The UDA’s Rs. 5 billion debenture issue to raise funds for the resettlement of 65,000 families living in unauthorised constructions in Colombo was oversubscribed yesterday with managers to the issue state banking giant Bank of Ceylon deciding to close subscription after bids applications amounting to almost Rs. 11 billion were received. The bid was open until subscriptions amounting to Rs. 10 were received.

Bank of Ceylon Chairman Dr. Gamini Wickremasinghe told The Island Financial Review that the issue was closed four days from opening after strong investor demand.

"Thirty percent of the issue was open to foreigners while local investors too showed a lot of interest with many of them coming in at the final stages. We could not accept their applications because by late afternoon we had decided to close the issue," he said.

Dr. Wickremasinghe said that local investors would get a good deal by investing in the five year debentures, as deposit interest rates, already low, could come down further during the months ahead.

Investors had three investment options: the first pays a gross return of 11 percent with interest paid annually, the second option pays a gross return of 10 percent with monthly interest payments while the third option has a floating rate of interest at the Treasury bill rate + 0.75 percent with interest paid bimonthly.

"These five year debentures would be better than fixed deposits and benefit those who rely on monthly interest income," Dr. Wickremasinghe said.

Bank of Ceylon Deputy General Manager P. A. Lionel told The Island Financial Review that applications had amounted to Rs. 9.4 billion last morning (28) after totalling 8.2 billion the previous day (27).

The UDA would use the funds to build housing units for 65,000 families within the next three and half years. The land, freed from this exercise, would be leased out for commercial and development activities.

Related Info:
Sri Lanka's UDA Debentures Open on Sept 23. 30% of Rs 10bn 5yr Bond Open to Foreign Investors

Sri Lanka's Bank of Ceylon Foreign Remittance Receipts up by 23pct in April 2010

21st May 2010, www.lankabusinessonline.com

Inward remittances handled by Sri Lanka's Bank of Ceylon (BOC) rose 22.7 percent in April 2010 despite other private commercial banks eating into its market share, a senior official said. "We see that our inward remittances are growing because people are sending hard currencies for savings and investments," Gamini Wickramasinghe, chairman of BOC told LBO.

"The blue collar workers are remitting more to increase their savings and investments."

Inward remittances through the bank have been rising every month since the beginning of this year.

In March they were up 24.4 percent to 16.3 billion rupees and in April rose 22.7 percent to 16.2 billion rupees from the previous year, Wickramasinghe said.

State-owned BOC is Sri Lanka's largest commercial bank.

In 2009 the bank received nearly 1.6 billion dollars in foreign remittances.

However, despite the good run BOC's inward remittances market share has steadily eroded because of fierce competition from private banks, Wickramasinghe said.

In 2008 BOC's market share was over 50 percent, but a year later had dipped under 50 percent, Wickramasinghe said.

"Everyone is fighting to increase market share," Wickramasinghe said. "The competition is stiff and we (BOC) are formulating new strategies to maintain market share."

He said BOC has introduced a pension scheme linked to remittances to attract more migrant workers to use the bank to remit their money home and encourage existing customers to stay with the bank.

Part of the remittances will be deducted monthly and put in a separate account from which money can be withdraw after workers retire at 55 years.

Most expatriate workers, despite working for years abroad, hardly save anything when they return to Sri Lanka, Wickramasinghe said.

"We are targeting our pensions scheme for the blue color workers as most of them when they retire they don't get pension," Wickramasinghe said.

Nearly 7.5 percent of Sri Lanka's 20 million population work mostly in blue collar jobs in Gulf states like Saudi Arabia, Oman, Qatar, Dubai, Lebanon and Syria.

ADB Offers Trade Finance Facilities to Sri Lankan Banks. Bank of Ceylon, DFCC Vardhana Bank Limited and NDB Bank Plc signs Agreements

09th December 2009, www.dailymirror.lk

The Asian Development Bank (ADB) yesterday signed new trade financing agreements with Bank of Ceylon, DFCC Vardhana Bank Limited, and NDB Bank Plc.

The agreements are part of ADB's Trade Finance Facilitation Program (TFFP) and will give the banks additional room to provide essential financing to Sri Lanka's exporters and importers. At the same time, the agreements will help the banks develop relationships with their international peers, which should promote partnerships and knowledge sharing in the future.

Bank of Ceylon Plc signed its first agreement under the program while DFCC Vardhana Bank Limited and NDB Bank Plc expanded their existing relationships with ADB.

Trade finance is less risky than many other forms of lending because it carries shorter maturities and supports the transfer of tangible goods. Nevertheless, companies in emerging markets, particularly small and medium-sized firms, have typically faced difficulties in accessing enough credit to fill export orders or get the goods they need from overseas.

The TFFP addresses this challenge by working with international and local banks to provide the support they require to ensure their importing and exporting clients get the loans and guarantees they need to do business.

"Trade is a key tool for promoting economic expansion. Stronger economic growth translates into jobs and higher incomes which, in turn, help to reduce poverty," said Philip Erquiaga, Director General of ADB's Private Sector Operations Department.

ADB's Asian Development Outlook 2009 Update, released in September, forecast Sri Lanka's economy would grow 4% this year and 6% in 2010. At the same time, the report predicts the country to have a current account deficit of 3% of gross domestic product this year and a 5% shortfall next year.

"Sri Lanka's banks and companies will benefit enormously from greater access to international trading and banking networks as the Sri Lankan economy emerges from the turmoil of a conflict that has restrained investment and growth for several decades," said Robert van Zwieten, Director of ADB's Private Sector Capital Markets Division, of which the trade finance program is a part.

Under the $1 billion TFFP, which began operating in 2004 and was expanded earlier this year, ADB provides finance and guarantees through and in conjunction with international and developing member country banks to support trade deals in developing countries. Since trade finance can roll over and as the program attracts private-sector support, the program can provide $3 billion in finance every year.