SDB bank: Redefining banking for a transformed future

Dinithi Ratnayake, the Chairperson of SDB bank, envisions SDB bank as a transformative institution going beyond traditional banking, enriching lives, empowering customers and creating positive social impact.

The bank which operates under a unique model centred around building vibrant communities, prioritizes serving cooperatives and SME businesses, recognizing their vital role in revitalizing the economy and building lasting relationships, nurturing businesses throughout their growth journeys from inception to expansion with comprehensive banking solutions and financing options to support individuals and businesses up the value chain, from out-growers to SMEs and connecting them to corporates, making us a valuable partner along the business life-cycle. The bank also equips its cooperative clients and smaller businesses with digital tools, enhancing financial and digital inclusivity and expanding our reach to the masses.

“I am excited about the future,” Ratnayake told Echelon in an interview, adding, “All of us at SDB bank are privileged to have an opportunity to make a meaningful impact through everyday banking, partnering with our customers in their journey of sustainable recovery, growth and success, and laying a solid foundation that prepares both the bank and our customers for the next phase of growth and development in Sri Lanka”. Excerpts of the interview are as follows:

What is your outlook for the banking sector amidst the unfolding economic crisis? Can you discuss the factors shaping the immediate future of the banking sector?

The ongoing economic crisis has far-reaching effects, and its full impact is still unfolding. The IMF facility will act as a catalyst for restoring confidence. Collectively Sri Lanka needs to take the necessary steps to design and charter a sustainable path to recovery. As we navigate through these uncertain times, I believe several crucial factors will determine the extent and intensity of the challenges confronting the banking sector and the economy: The reorganization of International Sovereign Bonds will have a significant bearing on the banking sector’s stability and resilience, and how domestic debt is restructured or optimized will play a vital role in mitigating the repercussions of the crisis. It is essential to monitor the impact on borrowers, particularly those in vulnerable sectors and segments, to assess potential risks and take proactive measures. A gradual reduction in interest rates is essential to support businesses and borrowers during these challenging times, whilst stability in exchange rates will contribute to banking sector stability and overall economic well-being.

In light of the economic contraction, banks are likely to proceed cautiously. While the downturn constrains business growth in most sectors, there will be pockets of growth in particular sectors like the food value chain and export-oriented businesses, where banks can provide lending support for expansion.

However, loan growth has been declining since April 2022. Banks are already experiencing stress on their lending portfolios, an area of concern during these challenging times. The pressures felt by stakeholders, including banks themselves, necessitate a pragmatic approach to business in the foreseeable future, given the ongoing market volatility until a sustainable path to recovery emerges. Restoring people’s confidence that their ability to earn and contribute as productive and engaged members of society is not in constant jeopardy will help retain talent and a resource pool to fuel the economic resurgence.

We must recognize that crises also present opportunities. Agile banks with a vision to incorporate ESG as a core component driving future strategy and pursue smart techniques of using data and institutional memory to identify new business prospects for growth during the rebound will emerge as winners, so this is an opportune time for banks to reassess their fundamentals, address challenges, and emerge stronger post-crisis.

The bank aspires to become a significant supporter of women in the economy. Why is this important to the bank?

We are not just a bank but a partner celebrating success, life, and family alongside our women entrepreneurs, staff, and business leaders. Despite women constituting 52% of our population, reported labour force participation stands at approximately 33%, and the share of women-owned businesses is less than 25%. There exists a significant gap between the potential of women and their actual participation in economic activity, not accounting for their contribution to the informal sector.

However, our extensive presence in semi-urban and rural markets and our close relationships with cooperatives allow us to identify and nurture the potential of women in the community, by providing education and equipping them with the necessary skills.

We recognize the need to explore innovative ways to retain or reintegrate women into the workforce, especially those who have taken a break mid-career to support their families or remained in traditional roles. We see this as an avenue to also address the skilled migration the country is currently experiencing, and will actively pursue strategies to address this aspect.

Historical data confirms that women demonstrate an excellent repayment track record, motivating us to invest our time, energy, and efforts in strengthening women entrepreneurs and women-led businesses through education, skills development, mentoring, and financial support. We already have several success stories that we can proudly share, and we hope to create many more as we advance into the future together.

We have access to gender financing and funding for women-led businesses, which we have extended to our clients. Moving forward, we will conduct further research to identify the evolving needs of women, utilize external assistance to capture critical data from clients with existing relationships, and secure funding on even more competitive terms, enabling us to extend a helping hand and support women in business. Furthermore, digital access and tools will provide our women clients with the flexibility to conduct their business activities and scale.

Archaic attitudes, social norms and traditional expectations continue to hinder women. How is SDB bank challenging these and breaking the shackles enabling women to thrive?

Since its inception, SDB bank has been wholeheartedly committed to empowering women and breaking down barriers within our organization.

Our unwavering commitment is evident in our various policies and initiatives to empower women. One significant aspect in our organizational culture is the uncompromising emphasis on gender diversity and inclusion. With women comprising nearly half of the bank’s workforce, we have fostered a culture that provides equal opportunity by creating a supportive work environment where they can thrive and eradicating gender biases, ensuring that no regressive societal norms or perspectives hinder the growth of women within our organization.

To nurture leadership among women, we have taken specific measures resulting in almost half of our corporate management and leadership teams comprising women. Additionally, we consistently provide mentorship, training, and development opportunities to help women grow professionally.

Recognizing the challenges faced by female professionals, particularly in achieving work-life balance, we actively seek to make their professional lives more manageable. We offer flexibility and ample opportunities within the work environment to support women in achieving their personal and professional aspirations. At SDB bank, empowering women is not just a goal but an integral part of our identity. We remain dedicated to fostering an inclusive and empowering environment for women to thrive and succeed.