LankaClear (Private) Limited, the operator of Sri Lanka’s national payment network LankaPay, held its 14th Annual General Meeting recently at Galadari Hotel, Colombo.

Incorporated in 2002 under the guidance and approval of the Central Bank of Sri Lanka as the National Cheque Clearing House, LankaClear is owned by the Central Bank and all the registered commercial banks in the country. The company, today, facilitates a host of domestic interbank payments on behalf of all member banks and financial institutes, under the brand name of LankaPay, providing the critical backbone network for the country’s banking and financial system.

LankaClear recorded an impressive 16 percent year-on-year growth in revenue compared to a 12 percent growth previous year, surpassing the Rs.600 million revenue threshold for the first time. This is the highest ever revenue growth recorded by the company since its incorporation, which is mainly attributable to the volume growth in new electronic payment instruments. Primarily owing to the significant revenue growth experienced during the latter part of the year, the company was able to successfully reverse the negative profit growth trend experienced during the two previous years, recording an impressive profit of Rs.174 million for the year compared to Rs.129 million a year ago. 
The company also maintained a healthy return on assets ratio of 12 percent and return on equity ratio of 13 percent during the year under review. LankaClear closed the year with a strong balance sheet with net assets reaching Rs.1.34 billion, which was a 12 percent growth compared to the previous year. The company also declared the highest ever dividend for the shareholders in 2015/16.
Continuing the increased rate of adoption of the previous year, the financial year 2015/16 saw an even greater penetration of electronic payments as opposed to the paper-based instruments.

The revenue from Cheque Imaging and Truncation System continued to be the most significant revenue stream with a contribution of 55 percent to the total revenue from operations for the year. Revenue from Common Card and Payment Switch (CCAPS) and Sri Lanka Interbank Payment System (SLIPS) continued the impressive upwards trend recording a remarkable 81 percent and 24 percent growth, respectively. 

During the year 2015/16, the total number of banks connected to the Common ATM Switch (CAS) grew to 14, while connecting over 3000 ATMs islandwide accounting for almost 90 percent of the total ATMs in the country. The total volume of inter-bank cash withdrawals grew to 14.18 million from 7.89 million in the preceding year with an average approved transactions of 54,586 a day. 

The Common Electronic Fund Transfer Switch launched in August 2015 saw an exponential growth with 15 members getting on board as at the year end. The total value of the transactions cleared through LankaPay CEFTS during the year stood at 5.74 billion.

Addressing the AGM, LankaClear Chairman Anil Amarasuriya stated, “I am pleased to report that LankaClear has made significant progress towards developing and deploying a comprehensive common electronic payment network in the country. A key achievement for the company 
during the current financial year is the 

marked improvement in its financial health, evinced through strong revenue growth and improved profitability. 
Under the guidance of the Central Bank and the participation of all banks who are also the shareholders of the company, we were able to reach several significant milestones in our journey, whilst regaining momentum from a declining profitability trend experienced during the last couple of years. We will continue to consolidate and strengthen the country’s national payment network by driving electronic payments with the support of member banks and financial institutions, thereby assisting the nation to move towards a cashless economy.”

LankaClear General Manager and Chief Executive Officer Channa de Silva, commenting on the company’s performance said, “We believed the remarkable growth that we experienced during the year under review is a testimony to the confidence reposed on us by our shareholders. Our 
focus at a broader national level was on facilitating financial inclusivity for all communities by leveraging on rapid technological advancements. 

We have been transferring this macro concept of financial inclusivity to implementation level by building a ‘chain of trust’ from end consumers and all the way back to LankaClear. 
At a micro level, our priority was to strengthen the company’s financial base through improved revenues and profit growth. This is in line with our commitment to invest in future technologies without having to depend on outside funding sources. Our focus for the year was to consolidate the products that were already deployed and implement a host 
of innovative electronic payment 
instruments to keep pace with rapidly changing technology landscape. 

During the current financial year, a number of new innovations such as Online US Dollar clearing facility, Common Electronic Fund Transfer Switch (CEFTS), Common Mobile Switch (CMobs) and Common POS Switch (CPOS) went live. In this process, I believe we have also addressed our national value creation objective of supporting financial inclusivity in the country, by helping to link distant and even remote communities to the conveniences 
and cost benefits of high-quality electronic financial transactions.”