Merchant Credit of Sri Lanka (MCSL) and Ceylease Financial Services (CFS) will be merged with the Merchant Bank of Sri Lanka (MBSL), according to officials. “The due diligence with regard to this merger is being carried out currently by PriceWaterhouse Coopers and we also wrote to the Central Bank for their sanction,” 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 first quarter of next 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.
Mr. Shah noted that since he took up office in May, he has insisted on staff motivation and as a result, from August to September, MBSL recorded the highest leasing income in its 28 year-history. “This was solely because of the staff’s motivation.
The Kurunegala Branch staff from the manager to labourer was sent on a 5-day tour to Malaysia as they recorded the highest sales. This was done as a way to further motivate them,” Mr. Shah said, adding that he recognizes human resources as a most important factor to help bring MBSL profitability up.
MBSL Group posted Rs. 534 million pre-tax profit for the nine months to 30th September 2010, up 74% growth from the same period in 2009.
Post-tax profit of the Group rose to Rs 338.7 million, recording a growth of 44 % over the post-tax profit of Rs 235.2 million for the corresponding period of last year. “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, Pelawatte Dairy and a host of other Initial Public Offerings (IPOs) are in the pipeline while 2011 will see more than 12 IPOs. “The IPOs bring in more 50% of MBSL revenue (through advisory services to these IPOs,” he added, noting that restructuring of Ceylinco Investment Realty and Finance and Guarantee will be concluded in January. |
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