CB permits JKH/LOLC to hold excess shares in 2 banks
The Central Bank has granted permission to two large firms holding shares in banks, in excess of regulator’s stipulated period, for two more years.
Director of Bank Supervision of the Central Bank of Sri Lanka (CB) has by letter informed the two banks – NTB and Seylan – that their major shareholders, John Keells Holdings (JKH) and LOLC Group owning in excess of the stipulated maximum shareholding by the regulator can hold these till 2020.
The NTB earlier this month said that the CB permitted the John Keells Group to retain its current shareholdings at NTB Bank till 31 December 2020 and to reduce it to 15 per cent with effect from that date. The same was communicated to LOLC, LOLC officials told the Business Times.
The Monetary Board has also required NTB to limit the voting rights of the John Keells Group (now at 29 per cent) and LOLC (now at 43.93 per cent) to 10 per cent with effect from 31 March 2018. In two years time they will have to shed these holding to 15 per cent.
The founder shareholders at NTB, including JKH, had written to the regulator requesting an extension of the deadline and were awaiting a response, which was conveyed last month. LOLC had also written to CB to extend this timeline to shed their holding.
JKH directly holds 20 per cent stake in NTB whilst related party Mackinnons Keells Ltd owns a further 9.9 per cent.