Proposed DFCC-HNB venture in mid August

The proposed Rs. 500 million joint venture investment bank by the DFCC Bank and HNB due to start last month is now expected to take off in August – as soon as regulator approval is given.

“We are awaiting approval to start the company by mid August and we are expecting the approval of the Central Bank anytime soon,” Nihal Fonseka, Chairman designate of the new firm told The Sunday Times FT. “Most probably the approval will come through when the Monetary Board meets next,” he said, adding that the new entity (whose name is still being worked at) will also seek the Securities and Exchange Commission sanction to start operations.

He said that the two entities have sorted out the organisational structure of the new company.

He said that there will not be duplication of staff, new work areas, but a synergy of the two companies’ strengths. “We have agreed on the staffing and have identified two to three people to recruit from outside,” he said.

He said that Jayantha Perera of DFCC will be the managing director and there will be executive and non executive directors from both institutions.

HNB is more into retail areas in these business, while DFCC has a strong corporate base and the joint venture 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.