Considerable progress achieved in mergers - Central Bank

Considerable progress has been made in the consolidation process during March, a Central Bank release said.

Several banks and finance and leasing companies (NBFIs) have short-listed potential merger and acquisition counterparts and are carrying out internal evaluations on such companies.

The Central Bank has also approved in principle, certain possible consolidation activities among a few banks and finance companies.

The National Development Bank PLC and DFCC Bank have entered into a Memorandum of Understanding to proceed with the merger process.

Several audit firms which were appointed by the Central Bank to carry out due diligence and valuation of the companies are finalising reports. The Central Bank has continuously liaised with the audit firms to deal with any issues arising in connection with the due diligence and valuation processes, to ensure timely completion of assignments.

Several strategic investors have indicated their willingness to infuse fresh capital to some of the banks and NBFIs and such investments will strengthen the balance sheets of those entities while enabling them to expand their business operations.

The Central Bank has also granted approval in principle for such strategic investments.