Dear Stakeholder,

We extend our heartfelt appreciation to our steadfast investors who have chosen to invest in both the equity and the debt of our Bank. Rest assured, we are dedicated to maximising returns on your investments through careful and sustainable growth. It is our responsibility to offer you a comprehensive and balanced perspective of the Bank’s performance, including operational results, financial standing and cash flows, enabling you to make informed decisions. As one of Sri Lanka’s four Domestic Systemically Important Banks (D-SIBs) and the largest private sector Bank, designated as such by the Central Bank of Sri Lanka, we are confident in our ability to meet your expectations despite the challenges presented by the operating environment, mostly due to or caused by factors that flowed from the previous years. We commit to fulfilling our obligations in the best interests of our investors and believe that the information provided in this Integrated Report and Financial Statements will enhance your understanding of our core strengths, thereby fostering trust and loyalty among our investor community, who share a long-term vision of sustainable value creation.

The Bank is committed to nurturing robust and reciprocal communication channels with our esteemed investors, cultivating mutual trust and confidence. We uphold the rights granted to investors by relevant statutes to address material concerns, as elaborated in the "Connecting with Stakeholders" section on pages 38 to 41. These efforts have enabled us to engage proactively with our investors in a consistent, thorough and meaningful manner, often surpassing legal obligations and enhancing our reputation.

The Bank employs a diverse array of methods to engage and interact with its stakeholders. This encompasses the Annual Report, serving as the primary tool for investor communication, along with Annual General Meetings and Extra-Ordinary General Meetings, convened as necessary to provide opportunities for the investor community to connect with the Bank. Consistent with past practices, the Bank has produced an integrated Annual Report this year, presented in a concise format across each section. We deeply value the insightful feedback provided by our shareholders in previous surveys and comments, which has been carefully considered. To further enhance our reporting, we have included a stakeholder feedback form in this year’s Annual Report, inviting your valuable suggestions and opinions. Your feedback is invaluable to us and we are committed to incorporating it into our strategies to create long-term value for all stakeholders. We believe that these interactions will provide investors with valuable insights into the Bank’s performance, strategic direction, governance mechanisms, risk management strategies and the Sustainability Framework.

The investor relations section of our website which can be found at https://www.combank.lk/investors is another popular channel available for stakeholders, where both a PDF and an interactive version of the Bank’s Annual Report have been hosted. The Bank makes sure that its pages are regularly updated along with the rest of the site’s content.

 

We firmly believe that the Bank’s efforts to have an effective communication and active engagement with important stakeholder groups have made the Bank’s shares a creditable investment proposition, despite multitude of global and local developments detailed in Our Operating Context and Outlook.

 

Performance of the Colombo Stock Exchange (CSE) in 2023

Contrary to the year 2022 which had a notable decline in the performance of the CSE primarily due to effect of COVID-19, followed by the social unrest and the unstable political environment, the year 2023 saw the main index of the CSE, All Share Price Index (ASPI) becoming one of the world‘s top-performing stock market index. ASPI which stood at 8,490 points by the end of 2022, improved by 2,164 points to 10,654 points by the end of 2023, recording a growth of 25.50%. In the meantime, the S&P SL20 index, following the ASPI, improved to 3,068 points by the end of 2023, from 2,636 points at the end of 2022, recording an improvement of 432 points or 16.42%. Consequently, the market capitalisation which was at Rs. 3.847 Tn. at the end of 2022 too increased to Rs. 4.249 Tn. at the end of 2023, with a notable improvement of 10.44%.

Performance of the Banking Sector and Commercial Bank shares in 2023

In the backdrop of the excellent performance of the ASPI and the S&P SL20 indices during 2023, as shown in the above graph, the banking sector shares displayed a superior performance with the Bank index improving to 797 points at the end of 2023 compared to 386 points at the end 2022, with a commendable growth of 106.64%. It is pertinent to mention that the share prices of both voting and non-voting ordinary shares improved significantly by 90.24% and 94.67% respectively, during the year 2023, with the market prices of ordinary voting shares and ordinary non-voting shares closing Rs. 95.50 and Rs. 80.40 (Rs. 50.20 and Rs. 41.30 at end of 2022) respectively, as shown in the Table 29 on page 149. However, the share price of the Bank’s ordinary voting shares traded at a discount to its book value at 0.58 times at the end of 2023 (0.31 times at the end of 2022). Nevertheless, it continued to remain the highest among its peers in the Banking Sector.

As at December 31, 2023, the Bank’s public holding (free float) was 99.81% in ordinary voting shares (99.81% in 2022) and 99.88% in ordinary non-voting shares (99.88% in 2022), while its float-adjusted market capitalisation (compliant under option-1 of the Rules on minimum public holding requirement of the CSE) improved to Rs.124.095 Bn. from Rs. 61.476 Bn. in 2022 by 101.86%. As shown in Tables 32 and 33 on page 150, both voting and ordinary non-voting shares of the Bank were actively traded in the CSE where the investors are given a convenient “enter and exit” mechanism with the number of share transactions in the CSE recorded a notable improvement while the number of shares traded in the CSE by the two categories of shares reflected mixed results. In the meantime, the number of shareholders holding both voting and non-voting shares of the Bank at the end of the year stood at 15,857 and 5,702 respectively, as depicted in Table 35 showing the confidence placed by investors in the Bank’s shares.

Compliance report on the contents of the Annual Report in terms of the Listing Rules of the CSE

We are pleased to inform you that the Bank has fully complied with all relevant provisions of Section 7.6 of the Listing Rules of the CSE regarding the information to be included in an entity’s Annual Report and Financial Statements.

Table 25 given below provides a complete list of disclosure requirements and references to the relevant sections of this Annual Report where the Bank’s compliance with the required disclosures are made together with the relevant page numbers.

The pages that follow contain information on the performance of the Bank’s listed securities.

Compliance with requirements of the Section 7.6 of the Listing Rules of the CSE

Table – 25

Rule No.	Disclosure requirement	Section/reference
7.6 (i)	Names of Directors during the financial year and their profiles.	Governance and Risk Management
7.6 (ii)	Principal activities of the Bank and its subsidiaries during the year and any changes therein.	Note 1.3 to the Financial Statements Group Structure
7.6 (iii)	Names and the number of shares held by the 20 largest holders of voting and non-voting ordinary shares and the percentage of such shares held.	Item 4.2 of the “Investor Relations”
7.6 (iv) (a)	The float adjusted market capitalisation, public holding percentage (%), number of public shareholders and under which option the Bank complies with the minimum public holding requirement, in respect of voting ordinary shares. The public holding percentage (%) in respect of non-voting ordinary shares.	Item 4.3 of the “Investor Relations”
7.6 (iv) (b)	Public holding percentage (%) and the number of public shareholders of foreign currency denominated shares.	The Bank has not issued any foreign currency denominated shares
7.6 (v)	Details of each Director’s and Chief Executive Officer’s holding in each class of shares of the Bank at the beginning and end of the financial year.	Item 4.4 of the “Investor Relations”
7.6 (vi)	Information pertaining to material foreseeable risk factors of the Bank.	Item 5 of the “Investor Relations”
7.6 (vii)	Details of material issues pertaining to employees and industrial relations of the Bank.	Item 6 of the “Investor Relations”
7.6 (viii)	Extents, locations, valuations and the number of buildings of the Bank’s land holdings and investment properties.	Note 38.5 (a) and (b) to the Financial Statements
7.6 (ix)	Number of shares representing the Bank’s stated capital.	Note 51 to the Financial Statements Item 7 of the “Investor Relations”
7.6 (x)	A distribution schedule of the number of holders in each class of equity securities and the percentage of their total holdings as at the end of the year.	Item 4.5 of the “Investor Relations”
7.6 (xi)	Ratios and market price information: Equity – Dividend per share, dividend payout ratio, net asset value per share, market value per share – highest, lowest values recorded during the financial year and the market value as at the end of the financial year. Debt – Interest rate of comparable Government Securities, debt/equity ratio, interest cover and quick asset ratio, Debt Service Coverage ratio, market prices and yield during the year – High, low and last traded prices. Any changes in credit rating (for the Bank or any other instrument issued by the Bank).	Financial Highlights Items 2, 3 and 11 of the “Investor Relations” Items 10 and 11 of the “Investor Relations” Item 12 of the “Investor Relations”
7.6 (xii)	Significant changes in the Bank’s or its subsidiaries’ fixed assets including substantial difference between market value and book value of lands.	Note 38.5 (b) to the Financial Statements
7.6 (xiii)	Details of funds raised through Initial Public Offering and/or a further issue of Securities during the year. the manner in which the funds of such issue/s have been utilised in conformity with the format provided by the CSE from time to time; if any shares or debentures have been issued, the number, class of shares or debenture and consideration received and the reason for the issue; and, any material change in the use of funds raised through an issue of Securities. In the event the funds raised through the Initial Public Offering and/or the further issue of Securities (as applicable) have been fully utilised by the Bank as disclosed in the Prospectus and/or Circular to shareholders between two financial periods, the entity shall disclose such fact in the immediate succeeding Annual Report or the Interim Financial Statements, whichever is published first.	Note 51 and 51.1 to the Financial Statements The Bank did not raise funds through a share issue during the year Note 50 to the Financial Statements for the details of debentures issued during the year Item 10 of the “Investor Relations”
7.6 (xiv)	(a) Information in respect of Employee Share Option Schemes The number of options granted to each category of employees during the financial year. Total number of options vested but not exercised by each category of employees during the financial year. Total number of options exercised by each category of employees and the total number of shares arising therefrom during the financial year. Options cancelled during the financial year and the reasons for such cancellation. The exercise price. A declaration by the Directors of the Bank confirming that the Bank or any of its subsidiaries has not, directly or indirectly, provided funds for the ESOS.	Note 52.1 to the Financial Statements “Employee Share Option Plans” Item 24 of the Statement of Compliance
	(b) Information in respect of Employee Share Purchase Schemes (ESPS). The total number of shares issued under the ESPS during the financial year. The number of shares issued to each category of employees during the financial year. The price at which the shares were issued to the employees. A declaration by the Directors of the Bank confirming that the Bank or any of its subsidiaries has not, directly or indirectly, provided funds for the ESPS.	Not applicable as the Bank does not have Employee Share Purchase Schemes
7.6 (xv)	Disclosures pertaining to Corporate Governance practices in terms of Section 9 of the Rules.	Required disclosures are given in Annexure 1.3 “Compliance with Section 9 of the Listing Rules issued by the Colombo Stock Exchange”
7.6 (xvi)	Related party transactions exceeding 10% of the equity or 5% of the total assets of the Bank as per Audited Financial Statements, whichever is lower.	The Bank did not have any related party transactions exceeding this threshold during the year 2023 and as at end 2023 (Note 62.6 to the Financial Statements)
	Details of investments in a related party and/or amounts due from a related party to be set out separately.
	The details shall include, as a minimum: The date of the transaction; The name of the related party; The relationship between the Bank and the related party; The amount of the transaction and terms of the transaction; The rationale for entering into the transaction.	Item 20.3 of the Statement of Compliance
7.6 (xvii)	Disclosures on foreign currency denominated securities listed on the CSE	The Bank has not issued foreign currency denominated securities
7.6 (xviii)	Disclosures on the Sustainable Bonds listed on the CSE	The Bank has not issued Sustainable Bonds
7.6 (xix)	Disclosures on Perpetual Debt Securities listed on the CSE	The Bank has not issued any Perpetual Debt Securities

1. Listed Securities of the Bank

The Bank’s ordinary shares (both voting and non-voting) are listed on the Main Board of the CSE under the ticker symbol “COMB”. All debentures issued are also listed on the CSE. (Table 26 on page 148 for a summary of listed securities of the Bank).

The Business section of most daily newspapers, including the Daily News, Daily FT, The Island and Daily Mirror carry a summary of trading activity and the daily prices of shares and debentures traded (if any) using the abbreviation of Commercial Bank or COMB.

Summary of listed securities of the Bank

Table – 26

	NUMBER IN ISSUE AS AT		Security code/ID
	December 31, 2023	December 31, 2022
Equity
Ordinary shares – Voting	1,236,525,395	1,167,236,442	COMB-N0000
Ordinary shares – Non-voting	77,595,733	72,541,605	COMB-X0000
Debt
Fixed rate Debentures March 2016/26	17,490,900	17,490,900	COMB-BD-08/03/26-C2342-11.25%
Fixed rate Debentures October 2016/26	19,282,000	19,282,000	COMB-BD-27/10/26-C2359-12.25%
Fixed rate Debentures July 2018/23	–	83,938,400	COMB-BD-22/07/23-C2404-12.00%
Fixed rate Debentures July 2018/28	16,061,600	16,061,600	COMB-BD-22/07/28-C2405-12.50%
Fixed rate Debentures September 2021/26	42,374,700	42,374,700	COMB-BD-20/09/26-C2491-09.00%
Fixed rate Debentures September 2021/28	43,580,000	43,580,000	COMB-BD-20/09/28-C2492-09.50%
Fixed rate Debentures December 2022/27	67,246,800	67,246,800	COMB-BD-11/12/27-C2504-28.00%
Fixed rate Debentures December 2022/29	32,638,200	32,638,200	COMB-BD-11/12/29-C2503-27.00%
Fixed rate Debentures December 2022/32	115,000	115,000	COMB-BD-11/12/32-C2505-22.00%
Fixed rate Debentures December 2023/28	21,324,000	Issued during the year 2023	COMB-BD-19/12/28-C2516-14.50%
Fixed rate Debentures December 2023/28	75,580,900		COMB-BD-19/12/28-C2517-15.00%
Fixed rate Debentures December 2023/30	329,800		COMB-BD-19/12/30-C2519-13.75%
Fixed rate Debentures December 2023/30	8,177,600		COMB-BD-19/12/30-C2521-14.25%
Fixed rate Debentures December 2023/33	308,400		COMB-BD-19/12/33-C2518-13.50%
Fixed rate Debentures December 2023/33	14,279,300		COMB-BD-19/12/33-C2520-14.00%

 

Equity securities Features of ordinary shares

Table – 27

Security type	Quoted ordinary shares
Listed exchange	Colombo Stock Exchange (CSE) – Main Board
Featured stock indices	All Share Price Index (ASPI)
	Standard & Poor’s Sri Lanka 20 (S&P SL20)
GICS Industry Group	Banks
CSE stock symbol	Voting – COMB.N0000
	Non-Voting – COMB.X0000
International Securities Identification Number (ISIN)	Voting – LK0053N00005
	Non-Voting – LK0053X00004

 

2. Performance of COMB shares and returns to shareholders

The investor interest in the Bank’s shares persisted during the year 2023 compared to 2022 as evidenced by the increased number of share transactions (Table 32 on page 150) and the number of shares traded (Table 33 on page 150) despite a slight drop in the number of shareholders in both categories of ordinary Voting and Non-Voting shares (Table 35 on page 152).

The market price of an ordinary voting share of the Bank recorded a significant increase of 90.24% (as opposed to drop of 36.70% in 2022) to Rs. 95.50 at the end of 2023 from Rs. 50.20 at the end of 2022 while the market price of an ordinary non-voting share of the Bank too recorded an appreciable improvement of 94.67% (as opposed to drop of 42.64% in 2022) to Rs. 80.40 at the end of 2023 from Rs. 41.30 at the end of 2022 (Table 29 on page 149). During most of 2023, the movement of the prices of non-voting shares followed the trend of the voting shares. The Bank continued with its policy of issuing scrip dividends and Employee Share Option Plans. Market capitalisation in terms of Rupees for both voting and non-voting shares stood at Rs. 124.327 Bn. (USD 383.429 Mn.) at end of 2023 compared to Rs. 61.591 Bn. (USD 167.824 Mn.) at end of 2022 which accounted for 2.93% of the total market capitalisation of the CSE of Rs. 4.249 Tn. as at end of 2023 (1.60% in 2022). The Bank’s shares ranked ninth among all listed entities at the CSE as at end of 2023 (twelfth in 2022) and first among the listed corporates in the Banking sector similar to 2022.

 

2.1 Movement of COMB voting share price over the year

Table – 28

Month	Jan-23	Feb-23	Mar-23	Apr-23	May-23	Jun-23	Jul-23	Aug-23	Sep-23	Oct-23	Nov-23	Dec-23
Highest price (Rs.)	61.00	70.00	71.90	64.00	61.60	69.90	94.20	107.50	96.00	90.00	88.90	95.60
Lowest price (Rs.)	50.00	56.40	62.50	56.50	52.10	56.70	75.50	80.00	86.50	80.00	82.50	87.90
Price at the month end (Rs.)	56.20	65.00	63.60	56.70	56.70	68.10	92.90	86.60	90.20	82.20	87.10	95.50

 

2.2 Share price movement of last five years (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

Table – 29

Year	2023 Rs.	2022 Rs.	2021 Rs.	2020 Rs.	2019 Rs.
Ordinary shares – Voting
Highest price during the year	107.50	85.00	105.00	96.00	115.90
Lowest price during the year	50.00	48.70	76.90	50.00	88.60
Last traded price	95.50	50.20	79.30	80.90	95.00
Ordinary shares – Non-voting
Highest price during the year	89.00	78.50	95.90	87.20	99.40
Lowest price during the year	40.00	39.40	69.60	48.00	74.00
Last traded price	80.40	41.30	72.00	70.10	83.00

 

2.3 Sustainable value for investors

Table – 30

	Ordinary shares – Voting			Ordinary shares – Non-voting
	Trade date	2023 Rs.	2022 Rs.	Trade date	2023 Rs.	2022 Rs.
Highest price	August 10, 2023	107.50		August 11, 2023	89.00
	January 24, 2022		85.00	January 24, 2022		78.50
Lowest price	January 02, 2023	50.00		January 19, 2023	40.00
	November 08, 2022		48.70	August 19, 2022		39.40
Year-end price		95.50	50.20		80.40	41.30

2.4 Information on shareholders’ funds and Bank’s market capitalisation

Table – 31

As at December 31,	Shareholders' funds Rs. Bn.	Commercial Bank's market capitalisation (*) Rs. Bn.	Total market capitalisation of the CSE Rs. Bn.	Commercial Bank's market capitalisation as a % of CSE market capitalisation %	Commercial Bank's market capitalisation ranking Rank	Commercial Bank's market capitalisation (*) USD Mn.
2023	215	124	4,249	2.93	9	383.429
2022	204	62	3,847	1.60	12	167.824
2021	165	94	5,490	1.72	9	470.963
2020	157	94	2,961	3.16	5	500.902
2019	133	97	2,851	3.40	4	532.699

(*) Market capitalisation includes both voting and non-voting shares.

2.5 Number of share transactions

Table – 32

	2023	2022	2021	2020	2019
Ordinary shares – Voting	42,212	25,271	58,754	85,914	21,481
Ordinary shares – Non-voting	13,897	10,075	18,827	21,407	5,452

2.6 Number of shares traded (‘000)

Table – 33

	2023	2022	2021	2020	2019
Ordinary shares – Voting	94,863	114,432	187,853	385,017	89,289
Ordinary shares – Non-voting	16,052	8,355	15,712	26,614	5,893

 

3. Dividends

We want to emphasise that the Bank recognises and comprehends the importance of declaring dividends as a means to strike a balance between shareholder expectations and the Bank’s business requirements. While the Bank had been distributing interim cash dividends until 2019, there have been no such payments made since then until December 31, 2023. This was in compliance with the requirements of the Banking Act Direction No. 03 of 2020 dated May 13, 2020, the Direction No. 01 of 2021 dated January 19, 2021, the Direction No. 11 of 2021 dated July 13, 2021, the Direction No. 02 of 2022 dated May 06, 2022 and the Direction No. 01 of 2023 dated February 02, 2023, issued by the CBSL on “Restrictions on Discretionary Payments of Licensed Banks”, wherein licensed banks were instructed to refrain from declaring cash dividends for financial years ended December 31, 2020, 2021, 2022 and 2023, respectively, in view of the possible adverse impact on liquidity and other key performance indicators of banks. However, as per the Banking Act Direction No. 01 of 2021, the Direction No. 11 of 2021 and the Direction No. 02 of 2022, Direction No. 01 of 2023 issued by the CBSL on the same subject, licensed banks incorporated or established in Sri Lanka were instructed to defer payment of cash dividends until the financial statements for the year ended December 31, 2020, 2021, 2022 and 2023, respectively, are finalised and audited by the External Auditors.

Accordingly, the Board of Directors of the Bank after giving due consideration to the requirements stipulated in the Banking Act Directions No. 01 of 2023, has now recommended a final dividend of Rs. 6.50 per share for both ordinary voting and non-voting shares of the Bank. This will be paid in the form of a cash dividend of Rs. 4.50 per share and a scrip dividend of Rs. 2.00 per share for both voting and non-voting shareholders of the Bank for the year ended December 31, 2023. This proposed first and final dividend for the year 2023 will be submitted for the approval of the shareholders at the 55th AGM, to be held on March 28, 2024. (A dividend of Rs. 4.50 per share was declared and paid by the Bank for the year ended December 31, 2022, in the form of issue and allotment of new shares for both voting and non-voting).

3.1 Dividend information (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

Table – 34

Dividends	2023	2022	2021	2020	2019
Cash – Rs. per share
First interim paid	–	–	–	–	1.50
Second interim paid	–	–	–	–	3.00
Final proposed/paid	4.50	–	4.50	4.50	–
Total	4.50	–	4.50	4.50	4.50
Scrip – Rs. per share
Final proposed/allotted	2.00	4.50	3.00	2.00	2.00
Total	6.50	4.50	7.50	6.50	6.50
Gross dividend proposed/paid (Rs. Bn.)
Cash	5.91	–	5.37	5.25	4.62
Scrip	2.63	5.58	3.58	2.34	2.06
Total	8.54	5.58	8.95	7.59	6.68
Dividend payout ratio (%)
Cash	28.90	–	22.77	32.07	27.16
Cash and shares	41.75	24.29	37.94	46.33	39.23

 

4. Shareholders

The Bank had 15,857 ordinary voting shareholders and 5,702 ordinary non-voting shareholders as at December 31, 2023, compared to 17,022 and 5,989 voting and non-voting shareholders as at December 31, 2022 (Table 35 on page 152). With one new investor joining ranks, the percentage of ordinary voting shares held by the 20 largest shareholders as at end 2023 marginally increased to 77.09% from 76.85% as at end 2022. Similarly, with four new investors joining ranks, an increase was witnessed in the non-voting ordinary shares held by the 20 largest shareholders to 36.48% as at end 2023 from 33.90% as at end 2022.

4.1 Number of ordinary shareholders

Table – 35

As at December 31,	2023 Nos.	2022 Nos.
Ordinary shareholders – Voting	15,857	17,022
Ordinary shareholders – Non-voting	5,702	5,989
Total	21,559	23,011

4.2 The names, number of shares and percentages of shares held by the twenty largest shareholders (As per rule No. 7.6 (iii) of the Listing Rules of the CSE)

Voting shareholders

Table – 36

As at December 31,		2023		2022 (*)
Ordinary shares – Voting		Number of shares	%	Number of shares	%
1.	DFCC Bank PLC A/C 1	149,777,568	12.11	141,453,570	12.12
2.	Mr Y S H I Silva	122,327,008	9.89	115,528,595	9.90
3.	Employees Provident Fund	106,485,764	8.61	100,567,740	8.62
4.	Mr D P Pieris	95,321,291	7.71	90,005,231	7.71
5.	CB NY S/A International Finance Corporation	87,919,750	7.11	83,033,546	7.11
6.	Sri Lanka Insurance Corporation Ltd. – Life Fund	62,371,928	5.04	58,905,563	5.05
7.	Melstacorp PLC	51,131,771	4.14	48,290,086	4.14
8.	Mr K D D Perera	45,418,533	3.67	42,894,365	3.67
9.	CB NY S/A IFC Emerging Asia Fund. LP	45,325,490	3.67	42,806,493	3.67
9.	CB NY S/A IFC Financial Institutions Growth Fund LP	45,325,490	3.67	42,806,493	3.67
11.	Sri Lanka Insurance Corporation Ltd. – General Fund	43,737,539	3.54	41,306,794	3.54
12.	Employees Trust Fund Board	20,004,314	1.62	20,330,734	1.74
13.	Renuka Hotels PLC	15,939,738	1.29	15,053,876	1.29
14.	Cargo Boat Development Company PLC	11,186,898	0.90	10,565,178	0.91
15.	Mr M J Fernando (Deceased)	11,109,917	0.90	10,492,476	0.90
16.	Hallsville Frontier Equities Ltd.	10,876,310	0.88	10,271,852	0.88
17.	Renuka Consultants & Services Limited	9,821,527	0.79	9,275,689	0.79
18.	Mr A H Munasinghe	7,123,095	0.58	7,660,822	0.66
19.	SSBT – Global Macro Capital Opportunities Portfolio	6,071,633	0.49	–	–
20.	Seylan Bank PLC/Andaradeniya Estate (Pvt) Ltd.	5,882,457	0.48	5,555,536	0.48
	Subtotal	953,158,021	77.09	896,804,639	76.85
	Other shareholders	283,367,374	22.91	270,431,803	23.15
	Total	1,236,525,395	100.00	1,167,236,442	100.00

(*) Comparative shareholdings as at December 31, 2022 of the twenty largest voting shareholders as at December 31, 2023.

Non-voting shareholders

Table – 37

As at December 31,		2023		2022 (*)
Ordinary shares – Non-voting		Number of shares	%	Number of shares	%
1.	Employees Trust Fund Board	6,036,439	7.78	5,643,261	7.78
2.	Akbar Brothers (Pvt) Ltd. A/C No. 1	3,764,303	4.85	3,542,491	4.88
3.	GF Capital Global Limited	1,906,146	2.46	1,875,479	2.59
4.	Mr M F Hashim	1,398,829	1.80	1,304,361	1.80
5.	M J F Exports (Pvt) Ltd.	1,327,409	1.71	1,240,950	1.71
6.	Mrs L V C Samarasinha	1,224,239	1.58	1,144,500	1.58
7.	EMFI Capital Limited	1,197,019	1.54	156,024	0.22
8.	Mr T W A Wickramasinghe, Mrs N Wickramasinghe (Joint)	1,180,375	1.52	985,150	1.36
9.	Janashakthi Insurance PLC – Shareholders	1,151,537	1.48	1,076,533	1.48
10.	Saboor Chatoor (Pvt) Ltd.	1,110,307	1.43	1,037,989	1.43
11.	Assetline Finance Limited/Suhada Gas Distributors (Pvt) Ltd.	922,371	1.19	–	–
12.	Mr E Chatoor	918,991	1.18	859,134	1.18
13.	Mr R Gautam	848,054	1.09	786,344	1.08
14.	Mr K S M De Silva	814,467	1.05	758,418	1.05
15.	Mr A L Gooneratne, Mrs C Gooneratne (Joint)	799,839	1.03	747,743	1.03
16.	Mr J D Bandaranayake, Ms N Bandaranayake and Dr V Bandaranayake (Joint)	784,297	1.01	772,196	1.06
17.	Mr J D Bandaranayake, Dr V Bandaranayake and Ms I Bandaranayake (Joint)	764,347	0.99	749,713	1.03
18.	Mr M J Fernando (Deceased)	762,425	0.98	712,766	0.98
19.	Serendip Investments Limited	707,500	0.91	661,418	0.91
20.	Swastika Mills Ltd.	694,940	0.90	542,173	0.75
	Subtotal	28,313,834	36.48	24,596,643	33.90
	Other shareholders	49,281,899	63.52	47,944,962	66.10
	Total	77,595,733	100.00	72,541,605	100.00

(*) Comparative shareholdings as at December 31, 2022 of the twenty largest non-voting shareholders as at December 31, 2023.

4.3 Public shareholding [As per rule No. 7.6 (iv) and 7.13.1 of the Listing Rules of the CSE]

Table – 38

As at December 31,	2023		2022
		%		%
Number of shareholders representing the public holding (Voting)	15,820	99.81	16,989	99.81
Number of shareholders representing the public holding (Non-voting)	5,698	99.88	5,985	99.88
Float adjusted market capitalisation Rs. Bn. (Compliant under Option 1)	124		61

4.4 Directors’ shareholding including the Chief Executive Officer’s shareholding (As per Rule No. 7.6 (v) of the Listing Rules of the CSE)

Table – 39

	Ordinary shares voting		Ordinary shares non-voting
As at December 31,	2023	2022	2023	2022
Prof A K W Jayawardane – Chairman	14,379	13,580	Nil	Nil
Mr Sharhan Muhseen – Deputy Chairman	2,750	2,598	Nil	Nil
Mr S C U Manatunge – Managing Director/Chief Executive Officer	118,599	75,815	Nil	Nil
Mr S Prabagar – Chief Operating Officer	251,136	165,703	26,290	24,578
Mr K Dharmasiri (*)	Nil	Nil	Nil	Nil
Mr L D Niyangoda	Nil	Nil	Nil	Nil
Ms N T M S Cooray	384,987	363,592	60,360	56,429
Ms J Lee	Nil	Nil	Nil	Nil
Mr R Senanayake	Nil	Nil	Nil	Nil
Ms D L T S Wijewardena	Nil	Nil	Nil	Nil
Dr Sivakumar Selliah	28,759	27,161	Nil	Nil
Mr D N L Fernando (**)	Nil	Nil	Nil	Nil
Mr P M Kumarasinghe (***)	Nil	Nil	Nil	Nil

(*) Retired w.e.f. January 8, 2023

(**) Appointed as a Director w.e.f. February 7, 2023

(***) Appointed as a Director w.e.f. April 12, 2023

4.5 Distribution schedule of number of holders and percentage of holding in each class of equity securities (As per rule No. 7.6 (x) of the Listing Rules of the CSE)

Table – 40

		As at December 31, 2023				As at December 31, 2022
		Number of shareholders	Percentage %	Number of shares	Percentage %	Number of shareholders	Percentage %	Number of shares	Percentage %
Ordinary shares – Voting
1	– 1,000	9,060	57.14	1,994,558	0.16	9,449	55.51	2,195,132	0.19
1,001	– 10,000	4,467	28.17	15,856,461	1.28	5,164	30.34	17,649,929	1.51
10,001	– 100,000	1,916	12.08	56,004,738	4.53	2,024	11.89	56,831,179	4.87
100,001	– 1,000,000	348	2.19	96,225,753	7.78	322	1.89	83,764,568	7.18
Over	1,000,000	66	0.42	1,066,443,885	86.25	63	0.37	1,006,795,634	86.25
Total		15,857	100.00	1,236,525,395	100.00	17,022	100.00	1,167,236,442	100.00
Ordinary shares – Non-voting
1	– 1,000	3,215	56.38	742,221	0.96	3,272	54.63	774,139	1.07
1,001	– 10,000	1,722	30.20	6,055,133	7.80	1,936	32.33	6,551,991	9.03
10,001	– 100,000	642	11.26	18,189,009	23.44	669	11.17	18,351,415	25.30
100,001	– 1,000,000	113	1.98	32,312,767	41.64	103	1.72	28,236,318	38.92
Over	1,000,000	10	0.18	20,296,603	26.16	9	0.15	18,627,742	25.68
Total		5,702	100.00	77,595,733	100.00	5,989	100.00	72,541,605	100.00

4.6 Composition of shareholders based on residency and category

Table – 41

	As at December 31, 2023				As at December 31, 2022
	Number of shareholders	Percentage %	Number of shares	Percentage %	Number of shareholders	Percentage %	Number of shares	Percentage %
Ordinary shares – Voting
Resident	15,607	98.42	1,013,925,355	82.00	16,774	98.54	965,754,985	82.74
Non-resident	250	1.58	222,600,040	18.00	248	1.46	201,481,457	17.26
Total	15,857	100.00	1,236,525,395	100.00	17,022	100.00	1,167,236,442	100.00
Individuals	15,197	95.84	441,206,246	35.68	16,369	96.16	427,935,318	36.66
Institutions	660	4.16	795,319,149	64.32	653	3.84	739,301,124	63.34
Total	15,857	100.00	1,236,525,395	100.00	17,022	100.00	1,167,236,442	100.00
Ordinary shares – Non-voting
Resident	5,629	98.72	71,721,622	92.43	5,915	98.76	68,026,397	93.78
Non-resident	73	1.28	5,874,111	7.57	74	1.24	4,515,208	6.22
Total	5,702	100.00	77,595,733	100.00	5,989	100.00	72,541,605	100.00
Individuals	5,464	95.83	48,889,575	63.01	5,752	96.04	47,993,209	66.16
Institutions	238	4.17	28,706,158	36.99	237	3.96	24,548,396	33.84
Total	5,702	100.00	77,595,733	100.00	5,989	100.00	72,541,605	100.00

5. Material foreseeable risk factors (As per Rule No. 7.6 (vi) of the Listing Rules of the CSE)

Information pertaining to the material foreseeable risk factors, that require disclosures as per the Rule No. 7.6 (vi) of the Listing Rules of the CSE is discussed in the Section on “Risk Governance and Management” on pages 232 to 258.

6. Material issues pertaining to employees and industrial relations pertaining to the Bank (As per Rule No. 7.6 (vii) of the Listing Rules of the CSE)

During the year under review, there were no material issues relating to employees and industrial relations pertaining to the Bank, which warrant disclosure.

7. Information on movement in number of shares represented by the stated capital (As per rule No. 7.6 (ix) of the Listing Rules of the CSE)

Table – 42

Year	Description	Type of share	Basis	Number of shares issued/(redeemed)	Number of shares
					Ordinary shares – voting	Ordinary shares non-voting	Cumulative redeemable preference shares
1987	As at December 31, 1987			–	3,000,000	–	–
1988	Bonus Issue	Voting	2 for 3	2,000,000	5,000,000	–	–
1990	Bonus Issue	Voting	1 for 1	5,000,000	10,000,000	–	–
1993	Rights Issue	Voting	1 for 4	2,500,000	12,500,000	–	–
1996	Bonus Issue	Voting	3 for 5	7,500,000	20,000,000	–	–
	Rights Issue	Voting	1 for 4	5,000,000	25,000,000	–	–
	Share Swap	Non-voting		894,275	25,000,000	894,275	–
	Bonus Issue	Non-voting	3 for 5	536,565	25,000,000	1,430,840	–
	Rights Issue	Non-voting	1 for 4	357,710	25,000,000	1,788,550	–
1998	Bonus Issue	Voting	3 for 10	7,500,000	32,500,000	1,788,550	–
	Bonus Issue	Non-voting	3 for 10	536,565	32,500,000	2,325,115	–
2001	Bonus Issue	Voting	1 for 5	6,500,000	39,000,000	2,325,115	–
	Bonus Issue	Non-voting	1 for 5	465,023	39,000,000	2,790,138	–
	Issue of cumulative redeemable preference shares			90,655,500	39,000,000	2,790,138	90,655,500
2003	Bonus Issue	Voting	1 for 3	13,000,000	52,000,000	2,790,138	90,655,500
	Rights Issue	Voting	1 for 4	13,000,000	65,000,000	2,790,138	90,655,500
	Bonus Issue	Non-voting	1 for 3	930,046	65,000,000	3,720,184	90,655,500
	Rights Issue	Non-voting	1 for 4	930,046	65,000,000	4,650,230	90,655,500
	Issue of cumulative redeemable preference shares			100,000,000	65,000,000	4,650,230	190,655,500
2004	ESOP	Voting		29,769	65,029,769	4,650,230	190,655,500
2005	ESOP	Voting		1,361,591	66,391,360	4,650,230	190,655,500
	Bonus Issue	Voting	1 for 1	66,389,162	132,780,522	4,650,230	190,655,500
	Bonus Issue	Non-voting	1 for 1	4,650,230	132,780,522	9,300,460	190,655,500
2006	ESOP	Voting		737,742	133,518,264	9,300,460	190,655,500
	Redemption of cumulative redeemable preference shares			(90,655,500)	133,518,264	9,300,460	100,000,000
2007	Rights Issue	Voting	3 for 10	40,288,996	173,807,260	9,300,460	100,000,000
	Bonus Issue	Voting	1 for 3	58,204,268	232,011,528	9,300,460	100,000,000
	ESOP	Voting		919,649	232,931,177	9,300,460	100,000,000
	Rights Issue	Non-voting	3 for 10	2,790,138	232,931,177	12,090,598	100,000,000
	Bonus Issue	Non-voting	1 for 3	4,030,199	232,931,177	16,120,797	100,000,000
2008	Redemption of cumulative redeemable preference shares			(100,000,000)	232,931,177	16,120,797	–
	ESOP	Voting		350,049	233,281,226	16,120,797	–
2009	ESOP	Voting		540,045	233,821,271	16,120,797	–
2010	Share Split	Voting	1 for 2	117,402,608	351,223,879	16,120,797	–
	Share Split	Non-voting	1 for 2	8,060,398	351,223,879	24,181,195	–
	ESOP	Voting		2,081,508	353,305,387	24,181,195	–
2011	Scrip issue for final dividend 2010	Voting	Rs. 2.00 per share	2,277,195	355,582,582	24,181,195	–
	Scrip issue for final dividend 2010	Non-voting		255,734	355,582,582	24,436,929	–
	ESOP	Voting		1,457,645	357,040,227	24,436,929	–
	Rights Issue	Voting	1 for 14	25,502,433	382,542,660	24,436,929	–
	Rights Issue	Non-voting	1 for 14	1,745,494	382,542,660	26,182,423	–
	Share Split	Voting	1 for 1	382,542,660	765,085,320	26,182,423	–
	Share Split	Non-voting	1 for 1	26,182,423	765,085,320	52,364,846	–
2012	Scrip issue for final dividend 2011	Voting	Rs. 2.00 per share	13,587,144	778,672,464	52,364,846	–
	Scrip issue for final dividend 2011	Non-voting		1,108,902	778,672,464	53,473,748	–
	ESOP	Voting		1,341,768	780,014,232	53,473,748	–
2013	Scrip issue for final dividend 2012	Voting	Rs. 2.00 per share	13,076,189	793,090,421	53,473,748	–
	Scrip issue for final dividend 2012	Non-voting		1,069,474	793,090,421	54,543,222	–
	ESOP	Voting		1,445,398	794,535,819	54,543,222	–
2014	Scrip issue for final dividend 2013	Voting	Rs. 2.00 per share	12,504,344	807,040,163	54,543,222	–
	Scrip issue for final dividend 2013	Non-voting		1,036,724	807,040,163	55,579,946	–
	ESOP	Voting		3,237,566	810,277,729	55,579,946	–
2015	Scrip issue for final dividend 2014	Voting	Rs. 2.00 per share	8,118,773	818,396,502	55,579,946	–
	Scrip issue for final dividend 2014	Non-voting		719,740	818,396,502	56,299,686	–
	ESOP	Voting		2,170,613	820,567,115	56,299,686	–
2016	Scrip issue for final dividend 2015	Voting	Rs. 2.00 per share	11,818,040	832,385,155	56,299,686	–
	Scrip issue for final dividend 2015	Non-voting		912,967	832,385,155	57,212,653	–
	ESOP	Voting		1,136,732	833,521,887	57,212,653	–
2017	Scrip issue for final dividend 2016	Voting	Rs. 2.00 per share	10,521,802	844,043,689	57,212,653	–
	Scrip issue for final dividend 2016	Non-voting		903,357	844,043,689	58,116,010	–
	Rights Issue	Voting	1 for 10	84,649,465	928,693,154	58,116,010	–
	Rights Issue	Non-voting	1 for 10	5,811,601	928,693,154	63,927,611	–
	ESOP	Voting		3,278,537	931,971,691	63,927,611	–
2018	Scrip issue for final dividend 2017	Voting	Rs. 2.00 per share	11,998,388	943,970,079	63,927,611	–
	Scrip issue for final dividend 2017	Non-voting		1,085,563	943,970,079	65,013,174	–
	ESOP	Voting		1,739,324	945,709,403	65,013,174	–
2019	Scrip issue for final dividend 2018	Voting	Rs. 2.00 per share	15,249,529	960,958,932	65,013,174	–
	Scrip issue for final dividend 2018	Non-voting		1,241,095	960,958,932	66,254,269	–
	ESOP	Voting		293,385.00	961,252,317	66,254,269	–
2020	Scrip issue for final dividend 2019	Voting	Rs. 2.00 per share	22,485,434	983,737,751	66,254,269	–
	Scrip issue for final dividend 2019	Non-voting		1,716,432	983,737,751	67,970,701	–
	Issue of shares via a private placement	Voting		115,197,186	1,098,934,937	67,970,701	–
2021	Scrip issue for final dividend 2020	Voting	Rs. 2.00 per share	25,071,337	1,124,006,274	67,970,701	–
	Scrip issue for final dividend 2020	Non-voting		1,770,070	1,124,006,274	69,740,771	–
	ESOP	Voting		474,254	1,124,480,528	69,740,771	–
2022	Scrip issue for final dividend 2021	Voting	Rs. 3.00 per share	42,755,914	1,167,236,442	69,740,771	–
	Scrip issue for final dividend 2021	Non-voting		2,800,834	1,167,236,442	72,541,605	–
2023	Scrip issue for final dividend 2022	Voting	Rs. 4.50 per share	68,687,375	1,235,923,817	72,541,605	–
	Scrip issue for final dividend 2022	Non-voting		5,054,128	1,235,923,817	77,595,733	–
	ESOP	Voting		601,578	1,236,525,395	77,595,733	–

 

8. Engaging with shareholders

The Bank has in place a comprehensive Shareholder Communication Policy, which outlines the various formal channels through which it engages with shareholders. It covers the timely communication of quarterly performance of the Group and the Bank as set out on pages 132 to 137 in “Summary of Interim Financial Statements – Group and Bank”. It also records significant events that may reasonably be expected to impact the share price. (More details are given in Financial Calendar on page 261).

Shareholders are kindly requested to provide their valuable feedback on the content of this Annual Report using the “Stakeholder Feedback Form” given at the end of this Annual Report for continuous improvements in the presentation and disclosures made in the Annual Report.

9. Quarterly performance in 2023 compared to 2022 (As per Rule No. 7.5 (a) (i) of the Listing Rules of the CSE)

We wish to inform the shareholders that the Bank duly submitted the Interim Financial Statements for the year 2023 to the CSE within applicable statutory deadlines (The Bank duly complied with this requirement for 2022 as well). Please refer “Financial Calendar” on page 261 for details of the requirements and how the Bank complied with same. Further, a summary of the Income Statement and the Statement of Financial Position depicting quarterly performance during 2023 together with comparatives for 2022 is given in Summary of Interim Financial Statements – Group and Bank on pages 132 to 137 for the information of stakeholders.

The Annual Report comprising of Audited Financial Statements for the year ended December 31, 2023 and the Audited Statement of Financial Position as at December 31, 2023 will be submitted to the CSE within three months from the year end, which is well within the required deadline as required by Rule No. 7.5 (a) of the Listing Rules of the CSE. (The Bank duly complied with this requirement for 2022).

This Annual Report in its entirety is available on the Bank’s website both as a PDF file and as well as an interactive version (http://www.combank.lk/investors).

Shareholders may also elect to receive a hard copy of the Annual Report on request. The Company Secretary of the Bank will respond to individual letters received from shareholders based on the requests made through the specimen request letter included in the booklet sent to shareholders.

10. Debt securities

Details of debentures issued and redeemed by the Bank during the year as well as the balances outstanding and other relevant information is as shown in the Note 50 to the Financial Statements on Subordinated Liabilities on page 368.

10.1 Debenture composition (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

Please refer to Note 50 to the Financial Statements on Subordinated Liabilities on page 368 for full details.

Please refer “Financial Highlights” and “Core Financial Soundness Indicators” on pages 16 to 125 for a comprehensive list of financial indicators.

11. Key shareholder return indicators (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

Table – 43

Year	2023	2022
Key financial indicators
Interest margin (%)	3.32	3.74
Return on assets (before tax) (%)	1.27	1.03
Return on equity (%)	9.78	12.46
Net asset value per share (Rs.)	163.55	164.30
Regulatory liquidity
Liquid assets ratio (%) (Minimum requirement 20%)
Consolidated (Sri Lankan operations)	46.06	35.88
Liquidity coverage ratio – LCR (%) (Current minimum requirement 100%)
Rupee	491.61	405.91
All currencies	516.27	293.91
Net stable funding ratio – NSFR (%) (Current minimum requirement 100%)	193.70	173.58
Debt service related ratios
Debt equity ratio (%)	16.97	34.02
Interest cover (Times)	8.84	7.31
Debt service coverage ratio (%)	127.11	56.84

 

12. Credit ratings (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

12.1 National Long-term ratings

Fitch Ratings upgraded the rating Outlook of the Bank’s credit rating to Stable from Negative in October 2023, largely due to ease in downside risks for the banking sector with upgrades to Sri Lanka’s Long-Term-Local-Currency Issuer Default Rating to CCC- from RD (Restricted Default). Earlier in January 2023, Fitch Ratings downgraded the rating assigned to the Bank from AA-(lka) with a Negative Outlook to A (lka) amidst the sovereign downgrade and recalibration of the agency’s Sri Lanka’s national rating scale, along with nine other banks.

Meanwhile, the Bank’s Bangladesh Operation’s credit rating was reaffirmed at AAA by Credit Rating Information Services Ltd in June 2023 for the 13th consecutive year.

The ratings reflect the Bank’s intrinsic financial strength, the established domestic franchise as Sri Lanka’s third-largest bank and the entrenched domestic deposit franchise that underpins the Bank’s funding and liquidity profile.

12.2 Credit ratings – Debentures (As per Rule No. 7.6 (xi) of the Listing Rules of the CSE)

The credit rating of the Bank’s Subordinated Debentures was affirmed as BBB+(lka) by Fitch Ratings Lanka Ltd., in November 2023.