42600 - CBC Equity & Gender DPR

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Summary of Investment Information

Project Number

42600

Company Name

COMMERCIAL BANK OF CEYLON PLC

Date SPI Disclosed

Jul 1, 2020

Country

Sri Lanka

Region

South Asia

Projected Board Date

Jan 20, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Feb 15, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Feb 27, 2020
Signed : Jun 30, 2020
Invested : Sep 29, 2020

Sector

Commercial Banking - General

Project Description

The proposed project entails an equity investment through a private placement to IFC and IFC Asset Management Company (AMC) of up to US$50 million in the form of new common shares in Commercial Bank of Ceylon PLC (CBC or the Bank).

CBC is the largest and leading private sector commercial bank in Sri Lanka. The Bank has over 260 branches and 800 ATMs across Sri Lanka; and a customer base of over 3.5 million. CBC expanded its operations to Bangladesh in 2003, where it currently operates 19 branches and 20 ATMs, serving mainly the corporate segment. The Bank incorporated a joint-venture in Maldives in 2016, established a microfinance subsidiary in Myanmar in 2018 and has an Italian subsidiary focused on providing remittance services.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity	15.0

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Woman-Owned SMEs

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

(i) Playing a strong counter-cyclical role and supporting the country's ability to recover from recent setbacks; (ii) Mobilizing equity capital to the banking sector at a time when FDI flows to the private sector have dried up; (iii) Implementing IFC's green equity principles and maintaining Bank's no-coal exposure status during the life of IFC equity investment; (iv) Standard Setting through Improved Environmental and Social (E&S) policies, and Social and Environmental Management Systems (SEMS) implementation; and (v) Standard Setting through Improved Corporate Governance Policies and Practices.

E&S Category Rationale / Risks and Mitigation

The key E&S risks and impacts derive from the bank's capacity to manage the potential environmental and social risks associated with its operations. The typical risks and impacts in SME segment are limited and site specific (e.g. related to occupational health & safety, emergency response, waste-water discharge, air emissions, labour, etc.). The bank is an existing IFC client and thus the bank has appointed an E&S specialist and is implementing an adequate E&S risk management system (ESMS) including an external communications mechanism. The existing ESMS will continue to be implemented for this project as well. The bank has adequate HR policies in line with IFC Performance Standard - 2 requirements for its operations in Sri Lanka and is in the process of upgrading its HR policies for Bangladesh. The bank will ensure that the upgrades are in line with IFC Performance Standard -2 requirements.

Task Title & Description	Actual Due Date	Status	Completion Date
Other1 Upgrade ESMS for Bangladesh operations	09/30/2022	Rescheduled
Other2 Upgrade the HR procedures for Bank's international operations		Completed	03/31/2021
Other3 Corporate level life and fire safety policy		Completed	06/01/2021
Other4 Recruit E&S specialist for Bangladesh operations		Completed	01/04/2021

Contacts

For Inquiries About the Project, Contact

Commercial Bank of Ceylon PLC
Nandika Buddhipala
CFO
+94 11 2486000
Nandika_Buddhipala@combank.net
Commercial House, No 21, Sir Razik Fareed Mawatha, P.O. Box 856, Colombo 1, Sri Lanka.
https://www.combank.net/

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Telephone: 202-473-3800
Fax: 202-974-4384

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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