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| Sunday, 27 July 2003 |
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Commercial Bank to acquire CAI Bangladesh The Commercial Bank of Ceylon Limited and Credit Agricole Indosuez (CAI) signed a Memorandum of Understanding last week for the acquisition by Commercial Bank of CAI's banking operations in Bangladesh subject to the approval of regulatory authorities. The MoU signed in Colombo formalises an agreement between the two institutions, under which Commercial Bank will acquire CAI Bangladesh's principal office in Dhaka, together with a branch office in Chittagong and two booths. Once the regulatory approvals are obtained in both countries, the two banks intend signing the sale and purchase agreement in Dhaka, concluding the transaction. Though the proposed acquisition will be on the basis of a fully-fledged branch operation, Commercial Bank will do its best to preserve the national identity of the Bangladesh operation and its banking traditions inherited from CAI, a statement said.CAI's intended disposal of CAI Bangladesh despite its positive contribution to the Group is part of CAI's global repositioning to develop into a major European wholesale bank with an international network at the service of large corporate and financial institutions, CAI Bangladesh Country Manager Gerard Marchand said. CAI Bangladesh has been in operation since 1981 and is the second largest foreign bank in Bangladesh. It is also a well capitalised and profitable bank with healthy financial ratios. Commercial Bank will absorb the entire staff if there is an acquisition. This is part of Commercial Bank's stated goal of becoming a regional player with a focus on the SAARC region, Commercial Bank Managing Director Amitha Gooneratne said. The transaction, on completion, would represent the Commercial Bank's first acquisition of a banking operation outside Sri Lanka. The bank intends to develop the retail banking capabilities of CAI Bangladesh after the acquisition, while retaining its current strengths in trade finance. The International Finance Corporation, which made a strategic investment of 15 per cent in the capital of Commercial Bank recently, has pledged its fullest co-operation to the proposed Bangladesh operation. CAI is Credit Agricole SA's 100 per cent owned corporate and investment banking subsidiary specialising in capital market and financing activities and private banking. Credit Agricole, one of the largest banks in France, acquired Banque Indosuez in 1996 to create the wholesale international banking arm. Today, CAI operates in 50 countries and reported net banking income of EUR 2,644 million (about Rs. 286 billion) in 2002. |
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