Strategic Direction

In the context of opportunities and threats in our operating environment as well as our own internal strengths and weaknesses, DBB has formulated a five-pronged operational strategic plan covering a rolling three-year period.

On the business side, we aim for sustainable and profitable growth by

• Enhancing business promotion;
• Deepening market share in existing businesses; and
• Diversifying our income streams.

Internally, we will focus on operational efficiencies and effectiveness by

• Seeking cost efficient funding; and
• Improving the level of employee satisfaction.

The strategic direction discussed herein is supplemented by our Management Discussion and Analysis as well as other relevant sections of this Annual Report.

Enhance Business Promotion

Achievements during the year

Future direction

Developed a regional level marketing plan and 50 marketing campaigns were carried out during the year. New client acquisition: Facilities to new clients/total approvals, DFCC Bank: 37% DVB: 18% DVB PFS*: 74% * Personal Financial Services

Every employee to have a marketing orientation with a business development and customer focus Transform current staff mix of sales to non-sales from 1:3 to 1:1 by 2016; recruitment of more Relationship Officers Take advantage of new media to promote products and services more cost effectively Continue training programmes on customer care Diversify the customer base through relationship building Simplify processes at every possible contact point

 

Deepen Market Share in all Key Business Segments

Achievements during the year

Future direction

Our key business segments have shown good portfolio growth during the past as well as the year under review, namely: Corporate banking: 17.4% YoY to LKR 44,964 million Branch banking (including Business Banking): 23.4% YoY to LKR 92,233 million. Worked with regional media services for concentrated and localised campaigns Revised exposure limits in line with emerging trends and developments and improved the overall NPL ratio. Consultancy assignment with HFC Bank in Fiji continued successfully Synapsys Limited, the fully-owned IT subsidiary of DFCC Bank won an assignment to implement a core banking solution in Pan Oceanic Bank of Solomon Islands

Increase awareness levels of the corporate brand through personal relationships Cross-sell DFCC Group products and services Recruit more Relationship Officers for business promotion; set up a Corporate Relationship Unit within the Corporate Banking Department Introduce industry sector focused marketing campaigns for different regions Corporate Banking: Low margins and high volume strategy to reduce cost-per-delivery Business Banking: Medium margin and medium volume strategy to stay within risk-return thresholds Branch Banking: Medium to high margins with however, aggressive pricing for acquiring new relationships; and continued focus on SMEs Expand international operations and consultancy services Identify growth sectors to accomplish large volume of lending Take anticipatory and preventive actions to maintain portfolio quality Engage regularly with corporate clients through sponsorships, special events etc. Develop a comprehensive ‘SME Strategy’ incorporating the rural banking sector and microfinancing sector

 

Diversify Income Streams

Achievements during the year	Future direction
The ratio of non-interest income to net income improved to 32% in 2014/15 from 17% in 2013/14. (excluding exceptional and extraordinary items) Invested LKR 1,517 million during the year in listed debentures Invested LKR 500 million during the year in unit trust funds Earned significant fee income from EIB credit line administration and an international consultancy assignment	Increase trading portfolio through investments in listed shares Invest in listed debentures, securitised paper and unit trusts Invest a portion of liquid assets in gilt-edged funds Explore opportunities for off-shore operations Explore investment opportunities in unrelated businesses

 

Seek Cost Effective Funding

Achievements during the year	Future direction
Raised LKR Five billion through a listed debenture issue Continued to administer the EIB credit line of EUR 90 million for Renewable Energy/Energy Efficiency and SMEs to be disbursed through DBB and two other participating financial institutions	Negotiate additional credit lines from established business partners Consider new debenture issues Consider securitisation of the leasing portfolio Improve the CASA ratio of the DBB

 

Improve Employee Satisfaction Levels

Achievements during the year

Future direction

Reviewed individual development plans submitted by employees to identify training needs Provided relevant training to 75% of staff Reduced staff attrition (including retirees) to less than 10% during the year Continued the talent management process using the Nine Box model Implemented the staff job rotation policy Human Resources Department teams visited 70% of the branch network during the year to meet branch staff, discuss issues and concerns Implemented the results of the Salary Survey

Enhance employee engagement and motivation by proactively addressing concerns raised through surveys, branch visits, grievance handling mechanisms, exit interviews etc. Continue to improve employee communications, transparency of processes and methods of addressing employee needs and concerns Identify training needs and provide a relevant response, including feedback on its effectiveness Introduce job rotation between support and front line staff at common branches of DFCC Bank and DVB Continue the talent management process using the Nine Box model