Commercial Bank, NDB shop for strategic mergers

Hiran H. Senewiratne

The Commercial Bank and the NDB Bank are looking at possibilities to go for mergers or joint ventures following the failure of both banks in its earlier attempt on merging with strategic partners.

The Central Bank (CB) also welcomes banks in the country to be merged within the sector according to specified monetary and banking regulations to create a strong and consolidated banking sector in the country, its sources said.

The merging of banks in the country would help them to be competitive in the sector. CB welcomes this happening according to stipulated regulations, CB sources said.

Commercial Bank's Senior Deputy General Manager (Finance and Planning) Ranjith Samaranayake told the Daily News Business they are looking for market opportunities in the sector to merge or form strategic alliances.

He said banks and business entities need to find new options in the business world to be globally competitive in the market.

NDB Bank sources said they are looking forward to go for a possible merger or any other option to be competitive in the banking sector to face challenges in the region following the failure of the proposed Commercial Bank merger.

Hatton National Bank does not have any plans of a merger now as they had to stick to their five-year development plan, a high ranking official said.

The Securities and Exchange Commission (SEC) also welcomes consolidation in the banking industry which is important now to face global competition. The SEC likes companies to be bigger and stronger to meet the capital requirements to compete regionally at least with India.

A strong banking sector is good for the country and it would support large-scale development and infrastructure projects in the country, the Central Bank said.

If banks adopt an appropriate management model, which is comfortable for them adhering to all laws and regulations pertaining to the sector like the Monetary Laws, Banking Act, a Central Bank official said.