‘Mergers are messy’

HNB’s Jonathan Alles:


By Steve A. Morrell

‘Mergers are messy, it means staff displacement, re-allocation of functions, personnel movement, re-deployment of funds, and generally, it would result in dislocation of a going organization merely for some monetary gain. That too an untested situation, CEO/Managing Director HNB Jonathan Alles asked at a MTI Consulting initiated banking forum on Tuesday.

Alles asked,’ Why should you merge? If finance companies think they should minimize their funds base, or broad base their functions, let them. Banks, as they are, do not need to be swallowed up by each other.’ These remarks raised applause from an appreciative audience.

He further said whatever is discussed had to be relevant to long term planning. At least a time frame of ten years. He also raised the position of branding and brands.

Governor Central Bank, Ajith Nivaard Cabraal, keynote speaker , said, subject to current economic progress, per capita GDP would be around $ 10,000 if not more by 2020. ‘The banking sector was strong and created progress in economic activity.’ He said Singapore was a good example of financial stability which could be achieved here as well. Current GDP placing was that Sri Lanka was at $ 3580 Per Capita.

‘Sri Lanka was a growing country, and consolidation has not made us weaker but stronger. The Ceylon Electricity Board which was an organization draining the economy is now stable and contributing to its existence. Similarly the Ceylon Petroleum Corporation was in progress mode. This was achieved through no disruption to industrial peace, Cabraal said.

CEO MTI Consulting, Hilmy Cader, opened discussions indicating preliminary points to be discussed.

Two panels were identified. Personnel on panel one were CEO, National Development Bank, ( NDB), Rajendra Theagarajah, Asst Governor Central Bank, C.J.P. Siriwardena, chairman Colombo Stock Exchange, Krishan Balendra and Director / CEO Union Bank of Colombo Anil Amarasuriya.

Initiating discussions Rajendra Theagarajah said Sri Lanka was a small market and had to create its own space to look at growth, not in the short term but in the long run; and further not looking at gain in the immediate future. That, he said, had to result in a planned situation.

Salient points included mergers and ensuing discussions within this panel also centered on personnel displacement.

Panel two had Jonathan Alles, chairman, The Finance Company, Preethi Jayawardena, MD Sampath Bank, Aravinda Perera, and CEO DFCC Bank Arjun Fernando.

Pix by Saman Abeysiriwardena.

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