The largest private lender of Sri Lanka, Hatton National Bank is likely to acquire an Indian bank that has a chain of branches in southern states of the country if allowed by the Reserve Bank of India (RBI) in the fiscal year 2009-10.
Speaking to FE on the sidelines on the concluding day of Swift Business Forum in Mumbai on Wednesday, Premasiri Ratnayake, chief manager (international operations) said, ?Although the final decision on this issue has not been taken by our board members, an acquisition in south India would blend well with our culture and the future expansion strategy in a bid to encash on the India growth story. Also, we might soon seek an approval from the RBI to upgrade our currently operational Chennai representative office into a full-fledged branch.?
However, he did not divulge more details relevant to his bank?s proposed acquisition plan in southern states of India.
Presently, Hatton National Bank capitalises on the Indo-Sri Lankan trade business through its association with small to mid-sized Indian banks like ING Vysa, Bank of Rajasthan, Bharat Overseas Bank and Tamilnadu Mercantile Bank. Ratnayake also said that his bank is open to liquidate an equity stake in favour of any foreign lender including an Indian bank in future. Currently, German player Deutsche Bank Group holds around 17% stake in Hatton National Bank.
Hatton National Bank is a 120-year-old financial institution in Sri Lanka. The bank?s current balance sheet size is pegged over $1.8 billion, and has 173 branches across Sri Lanka and 5 representative offices in foreign countries.
HMPB Herath, senior manager of Sri Lanka?s apex bank, Central Bank of Sri Lanka said that in the years to come, some acquisitions and consolidations are most likely to happen in Indo-Sri Lankan banking space.