Impending Marriage

DFCC Bank has completed due diligence work on MERC Bank and is in the process of firming up the financial bid.
Financial analysts expect DFCC to inject up to Rs. 400 mn in fresh capital for a 76 percent slice in the cash starved MERC Bank.rn

rnDFCC CEO Nihal Fonseka told Lanka Business Online that an announcement spelling out the potential price would be made known next week.rn

rnThe merger is expected to get Central Banks blessings within the course of this month.rn

rnMERC Bank started off with a Rs. 250 mn capital, but has since seen its capital wiped off due to high start up costs. A lack of a foreign exchange dealer licence, also crippled its operations during its formative years of operation.rn

rnMERC is carrying accumulated losses of over Rs. 300 mn.rn

rnThe bank has deposits of around 670 mn, while its lending portfolio is said to be around Rs. 290 mn. rn

rnEconomic Reforms Minister, Milinda Moragoda, whose family owns a 20 percent stake in MERC Bank, is expected reduce its ownership