Banking Synergy

June 19, 2008 (LBO) – Sri Lanka's Hatton National Bank (HNB) and DFCC Bank have set up a joint venture investment bank that they said would be better able to compete in local and regional markets. The joint venture called Acuity Partners (Pvt) Ltd., with an initial capital of 500 million rupees, will see the merger of investment banking units which are involved in equity and debt markets.

"Apart from the synergistic effects of bringing the individual companies together, the merger would release valuable regulatory capital and enable savings in operational costs," Rajendra Theagarajah, managing director of HNB, told reporters Thursday.

"Also, this will help retain intellectual capital in our capital markets, which could be used for the benefit of both groups and for the capital markets.

"Today, in Sri Lanka we see talent migration as one of our biggest problems," he said.

Acuity Partners would also look at regional markets, in the near future, Theagarajah said.

The Acuity Partners joint venture would be backed by the combined assets of both commercial banks which now have some 340 billion rupees.

DFCC chief executive Nihal Fonseka said the new investment bank will

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