Cost Saving Final

8/8/2019 Cost Saving Final

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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

Cost Saving Final

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