Home
Register
Seylan in merger talks with NDB
By Duruthu Edirimuni Chandrasekera
If successful, it would be the third largest local private bank after Commercial and HNB
The National Development Bank (NDB) would hopefully be third time lucky in trying to find a bride. This time it has proposed to Seylan Bank and initiated discussions on a possible merger, officials involved in the process, said. NDB which holds 10 per cent stock in Seylan has initiated this discussion some months ago, according to them. “These are at very preliminary stages and we’d like to see where this goes,” an NDB official told the Business Times. While venturing into commercial banking only in the past few years after being a solid state-led development bank, its interest in Seylan lies with expanding retail and corporate trade sectors, analyst said.
If merged, this new entity will be the third largest bank behind Commercial Bank and HNB, industry analysts said. This will amount to the new entity possessing Rs 521 billion in assets and 8.8 per cent of loans and 7.5 per cent of deposits, analysts said. These discussions have come after the NDB, DFCC and DFCC Vardhana banks’ consolidation strategy, according to the 2013 Budget statement, was dropped two years ago. These talks fell through in the midst of the last regime’s efforts to create a large development bank.
An earlier effort by NDB in 2007 happened when it proposed a merger between them and the Commercial Bank but it didn’t materialise with the entire staff of the Commercial Bank, opposing the move as being not beneficial to the bank. Three trade unions representing the staff- Ceylon Bank Employees Union, the Association of Commercial Bank Executives and Staff Association of Commercial Bank opposed this. During the past regime, a Master Plan on the Consolidation of the Financial Sector was presented in January 2014 designed for the reforming of the institutions belonging banks and non-bank financial institutions (NBFIs), which together account for 65 per cent of the financial sector of the country.
But in the post-Rajapaksa era, a committee, headed by Dinesh Weerakkody examining proposed financial reforms in the banking sector appointed soon after the advent of the new regime said that, “Mergers to be carried out within a stipulated time frame as stipulated in the Central Bank (CB) master plan will have even less chance of succeeding and therefore should be avoided in the future. When banks consolidate voluntarily, they take the needed measures to protect their own interests and would not participate in any Merger or Acquisition unless it is driven to benefit all stakeholders.”
It also added that mergers should occur only among consenting parties and on a voluntary basis, subject to economically viable and sustainable criteria that encourage institutions to consolidate. While some analysts say that the small financial institutions are generally more exposed to internal and external shocks and tend to threaten the stability of the entire financial system of the country, Central Bank Governor Arjuna Mahendran disagrees. He told the Business Times that in terms of finance companies, better run are the smaller ones. ”The larger these entities are, the less they are able to merge. I am questioning mergers.” Those who proposed the banking sector consolidation say that when larger banks grow, it will be difficult for smaller banks to remain competitive, and therefore, small banks are encouraged to merge with strong partners.
http://www.sundaytimes.lk/160306/busine ... 85136.html
By Duruthu Edirimuni Chandrasekera
If successful, it would be the third largest local private bank after Commercial and HNB
The National Development Bank (NDB) would hopefully be third time lucky in trying to find a bride. This time it has proposed to Seylan Bank and initiated discussions on a possible merger, officials involved in the process, said. NDB which holds 10 per cent stock in Seylan has initiated this discussion some months ago, according to them. “These are at very preliminary stages and we’d like to see where this goes,” an NDB official told the Business Times. While venturing into commercial banking only in the past few years after being a solid state-led development bank, its interest in Seylan lies with expanding retail and corporate trade sectors, analyst said.
If merged, this new entity will be the third largest bank behind Commercial Bank and HNB, industry analysts said. This will amount to the new entity possessing Rs 521 billion in assets and 8.8 per cent of loans and 7.5 per cent of deposits, analysts said. These discussions have come after the NDB, DFCC and DFCC Vardhana banks’ consolidation strategy, according to the 2013 Budget statement, was dropped two years ago. These talks fell through in the midst of the last regime’s efforts to create a large development bank.
An earlier effort by NDB in 2007 happened when it proposed a merger between them and the Commercial Bank but it didn’t materialise with the entire staff of the Commercial Bank, opposing the move as being not beneficial to the bank. Three trade unions representing the staff- Ceylon Bank Employees Union, the Association of Commercial Bank Executives and Staff Association of Commercial Bank opposed this. During the past regime, a Master Plan on the Consolidation of the Financial Sector was presented in January 2014 designed for the reforming of the institutions belonging banks and non-bank financial institutions (NBFIs), which together account for 65 per cent of the financial sector of the country.
But in the post-Rajapaksa era, a committee, headed by Dinesh Weerakkody examining proposed financial reforms in the banking sector appointed soon after the advent of the new regime said that, “Mergers to be carried out within a stipulated time frame as stipulated in the Central Bank (CB) master plan will have even less chance of succeeding and therefore should be avoided in the future. When banks consolidate voluntarily, they take the needed measures to protect their own interests and would not participate in any Merger or Acquisition unless it is driven to benefit all stakeholders.”
It also added that mergers should occur only among consenting parties and on a voluntary basis, subject to economically viable and sustainable criteria that encourage institutions to consolidate. While some analysts say that the small financial institutions are generally more exposed to internal and external shocks and tend to threaten the stability of the entire financial system of the country, Central Bank Governor Arjuna Mahendran disagrees. He told the Business Times that in terms of finance companies, better run are the smaller ones. ”The larger these entities are, the less they are able to merge. I am questioning mergers.” Those who proposed the banking sector consolidation say that when larger banks grow, it will be difficult for smaller banks to remain competitive, and therefore, small banks are encouraged to merge with strong partners.
http://www.sundaytimes.lk/160306/busine ... 85136.html
» CCS.N0000 ( Ceylon Cold Stores)
» Sri Lanka plans to allow tourists from August, no mandatory quarantine
» When Will It Be Safe To Invest In The Stock Market Again?
» Dividend Announcements
» MAINTENANCE NOTICE / නඩත්තු දැනුම්දීම
» ඩොලර් මිලියනයක මුදල් සම්මානයක් සහ “ෆීල්ඩ්ස් පදක්කම” පිළිගැනීම ප්රතික්ෂේප කළ ගණිතඥයා
» SEYB.N0000 (Seylan Bank PLC)
» Here's what blind prophet Baba Vanga predicted for 2016 and beyond: It's not good
» The Korean Way !
» In the Meantime Within Our Shores!
» What is Known as Dementia?
» SRI LANKA TELECOM PLC (SLTL.N0000)
» THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)
» Equinox ( වසන්ත විෂුවය ) !
» COMB.N0000 (Commercial Bank of Ceylon PLC)
» REXP.N0000 (Richard Pieris Exports PLC)
» RICH.N0000 (Richard Pieris and Company PLC)
» Do You Have Computer Vision Syndrome?
» LAXAPANA BATTERIES PLC (LITE.N0000)
» What a Bank Run ?
» 104 Technical trading experiments by HUNTER
» GLAS.N0000 (Piramal Glass Ceylon PLC)
» Cboe Volatility Index
» AHPL.N0000
» TJL.N0000 (Tee Jey Lanka PLC.)
» CTBL.N0000 ( CEYLON TEA BROKERS PLC)
» COMMERCIAL DEVELOPMENT COMPANY PLC (COMD. N.0000))
» Bitcoin and Cryptocurrency
» CSD.N0000 (Seylan Developments PLC)
» PLC.N0000 (People's Leasing and Finance PLC)
» Bakery Products ?
» NTB.N0000 (Nations Trust Bank PLC)
» Going South
» When Seagulls Follow the Trawler
» Re-activating
» අපි තමයි හොඳටම කරේ !
» මේ අර් බුධය කිසිසේත්ම මා විසින් නිර්මාණය කල එකක් නොවේ
» SAMP.N0000 (Sampath Bank PLC)
» APLA.N0000 (ACL Plastics PLC)
» AVOID FALLING INTO ALLURING WEEKEND FAMILY PACKAGES.
» Banks, Finance & Insurance Sector Chart
» VPEL.N0000 (Vallibel Power Erathna PLC)
» DEADLY COCKTAIL OF ISLAND MENTALITY AND PARANOID PERSONALITY DISORDER MIX.
» WATA - Watawala
» KFP.N0000(Keels Food Products PLC)
» Capital Trust Broker in difficulty?
» IS PIRATING INTELLECTUAL PROPERTY A BOON OR BANE?
» What Industry Would You Choose to Focus?
» Should I Stick Around, or Should I Follow Others' Lead?