cost saving final
TRANSCRIPT
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Ceylinco Savings Bank
Progress Report after MBSLAppointment as Managing
Agents up to 30th April 2009
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Structure of presentation
Cost Reduction Plan
Strategies adopted to retain and get new
deposits Renewals and Deposits
Issues faced by the Bank
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31 Dec 08 30thApril 09 Savings (Rs)
Personnel Cost 6.621 Mn 4,973Mn 1.648 Mn
Reduction of Banking
hours (OT, Electricity etc)
9.00 am to
6.00 pm
9.00 am to
4.00 pm
161,000
Disposal of Company
Vehicles
143,000
Termination of Lease -
Marketing Office
96,000
Reduction in Security Bill 134,330
Relocation of Vehicle Yard 80,000
Total 2.29 Mn
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Savings fromInsurance
Savings from
Maintenance
Savings from
Depreciation
Interest Income
from disposal
proceeds
Monthly rental
allowances
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Cost Reduction plan
As at
31 Dec
08
As at
30 March
09
As at 30th
April
Reduction
No ofStaff
225 184 178 47
Personal
Cost
6.621 Mn 5.572 Mn 4,973Mn 1.648 Mn
Personnel costs include basic salary Overtime EPF and
ETF
This will be reduced further from May as the salaries of
the staff resigned in April are also included here.
A. Reduction of Staff
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Average (PM)
2008
December
(Paid in Jan)
January
(Paid in
Feb)
February
(Paid in
Mar)
Sales
Commission
1,058,921 621,180 708,937 474,496
Sales Commission has been stopped with effect from 1st March 2009.
This cost can be saved from March 2009.Addtional Provision sholud
be made to compensate to some extent.
B. Ceasing of Sales Commission
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Reduced banking hours from 9.00 a.m. to 4.00 p.m. and
not working on Saturdays, to reduce overheads includingovertime, and electricity, with effect from 1st March 2009.
(Actual cost saving can be determined upon receipt of bills.
It is estimated a monthly savings of Rs.161,000/-)
C. Reduced Banking Hours
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Negotiated and issued a letter to the land lord with a
notice period to 2 months.
Expected saving from June onwards Rs.96,000/- per
month
D. Termination of Lease - Marketing
Office
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F. Reduction in Marketing Staff Traveling,
Substance & LodgingAverage
PM 2008
January Februar
y
March April
Traveling 143,749 198,575 140,902 65,000 63,000
Substance 3,178 2,255 2,760 -
Lodging 6,318 10,510 8,816 -
Total 153,245 211,340 152,478 65,000 63,000
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Proposal to use the Land for ParkingThere will be a savings in parking charges
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Strategies adopted to retain
deposits and get new
Deposits
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All BPU Managers and Sales Staff were given maturity lists of their
units and the responsibility was given to them to follow-up / call / visitcustomers to retain the deposit base.
BPU Managers are to report to HOD Treasury on daily basis of theirprogress and HOD Treasury to update the CEO, daily
All Sales Staff were given copies of all correspondents with CentralBank and MBSL and press releases to convince Customers
Special team allocated in the head office to talk all customers comingfor withdrawals
Banners highlighting MBSL as Managing Agent of CSB (Both Sinhala& English have been displayed in all locations)
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Banners
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Renewals and NewDeposits
* Including Premature Cash Backsettlementswith prematurewithdrawals
January February March
Maturities 227,240,822.72 147,992,587.78 178,755,079.03
Withdrawals (90,492,080.07) (63,401,983.99) (108,531,578.45)
Renewals 136,748,742.65 108,619,901.74 92,285,769.58
Actual New 30,163,527.00 25,213,888.00 23,520,328.00
Other Withdrawals (87,073,798.67) (17,851,883.65) (8,996,925.29)
Net Movement (147,402,351.74) (56,039,979.64) (94,008,175.74)
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Issues Faced by the Bank
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Recoverability of investment in Intercompany
Rs 225Mn.
Recoverability of loans given to directors of
related companies.
Recoverability of Non performing loan in loss
category.
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Cost ofFund Vs Rate of return
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Savings Department
Issues raised by the Department No proper withdrawal facilities available to increase
savings. ATM facility through Seylan Bank does not
work properly.
School principals do not allow the bank officials to goinside schools to do the collection or canvassing
because of Ceylinco name.
Due to the Ceylinco name and until the name change
takes place the lack of trust among the people to saveand invest with the bank.
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Treasury main Concerns
Repo Borrowing from BOC has reached its maximum level (Balance availableRs.15 M)
Seylan Bank Investments of Rs.6.797 M can be recall while canceling ODfacility of Rs.5 M
Finally to sell Rs.318 M Treasury Bond ( Maturity 15/04/2012) and settle BOCborrowings
T Bond (Maturity value) Rs.318 M
If we sell as at today can be generated Rs.236.934 M (@ 16.90)
To repay BOC Repo Borrowing required (Rs.195 M)
Balance available for Treasury Rs.41.934 M
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Compliance issues With the new guidelines of CBSL, considering advances over
2 months in arrears as NPA has brought in a negative impactfor the ratios under present market conditions.
Recoveries Department
Feb 09
Total PL _Capital PL_ interest NPL NPL %Housing loans 344,089,880 276,628,116 3,876,667 67,461,764 19.39%
Auto _Loans 68,540,108 62,994,438 1,078,352 5,545,670 7.97%
Staff loans _Auto 14,250,201 13,993,605 59,340 256,595 1.79%
Staff - HL 30,804,055 27,997,493 119,556 2,806,562 9.08%
Cashbacked 208,331,354 207,567,449 4,091,894 763,904 0.36%
Term loans 32,230,699 15,928,018 303,112 16,302,681 50.11%
Staff others 134,702 92,948 96 41,754 30.98%HP -Gross 378,218,901 333,256,100 6,217,669 44,962,801 11.70%
Leasing-Gross 421,425,921 331,944,712 4,019,895 89,481,210 21.03%
Pawning 15,698,830 15,698,830 1,184,149 - 0.00%
1,513,724,651 1,286,101,709 20,950,730 227,622,941 14.83%
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Recoveries Progress
No of Files Value No of Files Value No of Files Value
Transfer to performing 69 41.0 Mn 53 30.3 Mn 78 40.6 Mn
Transfer to Non performing 29 22.2 Mn 69 55.7 Mn 12 10.6 Mn
MarchFebruaryJanuary