HNB DFCC in JV for investment banking

Two of the top finance and banking institutions have emerged as a new entity in forming Acuity Partners, a joint venture of the HNB and DFCC banks that is certain to retain talent.

"Apart from the synergistic effects of bringing the individual companies together, the merger would release valuable regulatory capital and enable savings in operational costs," HNB Managing Director and Acuity Director Rajendra Theagarajah said.

He noted that this would certainly be a boost to retaining talent within the two institutions once merged as talent migration has been one of the biggest problems observed today.

The company’s new chairman Nihal Fonseka, currently the CEO at DFCC, addressing the media yesterday asserted that the rationale for the joint venture in investment banking is that a fundamental problem identified is in the proliferation of scale and ability to attract talent.

He noted that the merger of the subsidiaries of the institutions are set to take place within a period of one year while Acuity will be located separate from the two banking institutions.

No strangers to working together, the two entities under the new Acuity Partners (Private) Ltd. will act under a capital base of Rs.500 million.

The primary objective of Acuity Partners is to be Sri Lanka’s premier Investment Banking Group offering an unrivalled array of products and services to institutional and individual clients. In doing so, the Acuity Group would leverage on the track records of DFCC and HNB, and pool the experience, strengths and resources of the two institutions and their subsidiaries.

Commenting on the timing of entering into such a venture, Fonseka opined that having brought on the idea since last year and despite the “despondent” environment present today “one has to remain optimistic.”

It was asserted that there was a need to build up the skill through the strong entities of two stockbroking companies and securities company.

Fonseka also pointed out that the Acuity’s intention was to become a power house and a premier investment banking name in the regional market.

The company will be venturing into the possibility of moving out into the region and into countries like the Maldives, South India and Bangladesh in search of the potential of such investment banking solutions in those markets as well.

He noted that in the future with most companies finding it difficult to obtain the level of knowledge and skills in the business of finance as there were no proper people “who are good in the investment banking”.Moreover the “dominance of the banking sector will have to diminish” that would result in most of the larger companies forced to venture into the capital market.

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HNB DFCC in JV for investment banking