The merger of Merchant Credit of Sri Lanka (MCSL) and Ceylease Financial Services (CFS) with Merchant Bank of Sri Lanka (MBSL) will not result in any staff reduction, according to officials.
“The due diligence with regard to this merger was completed by Price Waterhouse Coopers and we also wrote to the Central Bank for their sanction and we have also taken a policy decision that we will not retrench any staff following this merger,” M.R. Shah Chairman MBSL told the Business Times.
He said that both firms are subsidiaries of Bank of Ceylon (BOC) along with MBSL and the merger will be concluded by the next quarter of this year, a development that was reported by the Business Times in October last year. “We decided to do this as this will consolidate the businesses as well as eliminate the duplication of businesses along with the additional cost,” he explained, adding that MCSL and CFS are currently into similar business activities as those of MBSL - namely corporate finance, investment banking, etc. He said this merger was on the cards many times, but due to personality clashes and personal agendas of different individuals it was not executed.
“A higher growth rate in profits of MBSL was made possible due to timely investments, reduction in borrowing cost, increased fee income from consultancy services and reduction in non performing accommodations,” Mr. Shah said. He said that Sri Lankan Catering, Pelwatte Dairy and a host of other Initial Public Offerings (IPOs) are in the pipeline while 2011 will see more than 12 IPOs through MBSL. The IPOs bring in more 50% of MBSL revenue,” he added.