DFCC-HNB venture proposal sent to CB

The corporate plan of the proposed Rs. 500 million Joint Venture Investment Bank by the DFCC Bank and Hatton National Bank has been sent to the regulator for approval.

“We are awaiting approval to start the company by end of June subject to approval of the principle business plan of the company,” Nihal Fonseka, designate Chairman of the new firm told The Sunday Times FT.

He said that a name has not been assigned yet to the new company, but it is still being worked at by a team. He said that there will not be duplication of staff, new work areas but a ‘synergisation’ of the two companies’ strengths. “Both DFCC and HNB are into areas such as primary dealership, corporate finance and stock brokering, but we deal with different market segments,” another senior DFCC official explained adding that HNB is more into retail areas in these business while DFCC has a strong corporate base. “We do not have common clients and we need all the staff, because we will not be duplicating any function,” this official explained. The official said that the equally owned, Joint Venture Investment Bank will carry out the amalgamated Corporate Finance and Capital Markets businesses of the two Institutions and will also be the Group Holding Company for the other related entities of the two banks including the Stock Broking and Primary Dealership businesses.

“The objective is to pool the strengths and resources of DFCC Bank and Hatton National Bank, to attain a critical mass and enable synergies while providing the full service range of a typically integrated investment banking operation,” he said.