January 24 (LBO) – The proposed merger of Sri Lanka’s National Development Bank and Commercial Bank will give the merged entity more clout to spread its wings in the region, officials said. “We want to create a large bank to go regional,” says Harris Premarathne Senior DGM of Commercial Bank.
“The challenge we have is to convince the shareholders. We want to merge through a true integration.”
Commercial Bank already has a presence in Bangladesh after it acquired a former Credit Agricole lndosuez branch in 2003.
A 30 percent stake of Commercial Bank is held by DFCC Bank, but attempts to combine the operations through a complex holding structure fell through earlier.
Both DFCC and NDB, were set up as development banks to give medium term capital to using state-guaranteed refinance from abroad has faced growth constraints with concessionary credit lines drying up.
After failing to consolidate with Commercial Bank, DFCC went ahead with buying up a small commercial bank.
NDB also acquired a foreign bank and later merged with it. However the bank does not have a large branch network to mobilize deposits unlike commercial bank.