Lanka bank to take over Credit Agricole's Bangladesh operation |
Star Business Report
A leading Sri Lankan bank will take over Bangladesh operation of Credit Agricole Indosuez (CAI).
Commercial Bank of Ceylon Ltd (Commercial Bank) and Credit Agricole Indosuez signed a memorandum of understanding (MoU) on Thursday in Colombo to this effect. Under the MoU, the Sri Lankan bank will acquire CAI Bangladesh's principal office in Dhaka, together with their branch office in Chittagong and two booths.
The banks will now require regulatory approval of the central banks of the two countries for formal acquisition. Once the regulatory approvals are duly obtained in both countries, the two banks intend signing the Sale and Purchase Agreement in Dhaka, concluding the transaction, according to Lanka Business Online news portal.
Credit Agricole Indosuez's exit from the Bangladesh market is part of the group'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.
Though the proposed acquisition will be on the basis of a fully-fledged-branch operation officials say Commercial Bank will try to preserve the national identity of the Bangladesh operation and its unique banking traditions, inherited from CAI.
CAI Bangladesh has been in operation since 1981 in Bangladesh. It is the only French investment in Bangladesh with cent per cent French shareholding.
CAI Bangladesh has a highly diverse customer base comprising mainly of multinationals and large corporates and a very dynamic and skilled staff.
Commercial Bank will absorb the entire 200 staff willing to continue in service after the acquisition.
Bangladesh will be the first overseas outpost for Commercial Bank, the second largest private bank of Sri Lanka. It is the most profitable local bank in the island country.
The International Finance Corporation, World Bank's private sector lending arm, which recently made a strategic investment of 15 per cent in the capital of Commercial Bank, has pledged its fullest cooperation to the proposed acquisition.
CAI Bangladesh became the fourth foreign bank to wind up its Bangladesh operations.
The French Society Generale was the first foreign bank that withdrew from Bangladesh handing over its operations to Canadian bank Nova Scotia.
The Nova Scotia also withdrew after doing business for around a year. The Muslim Commercial Bank of Pakistan was the third bank to wind up its operations.
The local Bank Asia Ltd took over the Bangladesh operations of both Nova Scotia and Muslim Commercial Bank.
CAI now operates in 50 countries.