NDB back to state control?
By Indika Sakalasooriya
Mar 10, 2010
This was speculated in the backdrop of NDB’s Chief Executive Officer, Eran Wickramaratne’s name appearing in the national list of the United National Front, the main opposition alliance in the upcoming general election and his subsequent resignation from the bank which was announced last week.
Market sources believe that Employees’ Trust Fund (ETF) and Employees’ Provident Fund (EPF) have been very active in buying NDB shares for the last few months. According to brokers, the buying spree started with the Galleon Fund’s decision to divest its assets in Asian markets. Galleon Diversified Fund had a 10 percent stake in NDB.
As they further pointed out, for the month of March up till now several crossings took place amounting to nearly 4 million shares between Rs.222 and Rs.222.50.
“It is the foreigners who have sold. In March up to now nearly 5 percent of NDB shares were reportedly bought by EPF and ETF”, a broker said.
According to NDB’s December 2009 interim report filed in the Colombo Stock Exchange, Bank of Ceylon (BoC) had been the largest single stakeholder of the bank. BoC had exactly 10 percent while state owned Sri Lanka Insurance Corporation’s Life and General Funds had 4.58 and 5.42 percent respectively.
EPF also had a stake of 4.6 percent while ETF had 1.81 as per the same interim financial report. Thus, the government already owns little more than 26 percent of NDB through its proxy institutions.
NDB was incorporated under the state ownership in 1979 to bring about the development banking concept to the country. In a bid to enhance its competitiveness and commercial outlook the bank was privatised in 1993. NDB acquired the Sri Lankan branch of ABN AMRO bank in 2001 and formed NBL.
Lately NDB initiated a merger with NDB Bank (NBL), the commercial banking wing of NDB group in 2005 and slowly transformed into a diversified banking giant in the country.
Courtesy: Bottom Line