Hatton National Bank Plcis a pioneer in microfinance in Sri Lanka and has been operating through its internationally renowned ‘GamiPubuduwa’ programme for over 25 years. Considering the opportunity to be part of the upliftment of the rural economy in line with the national vision of Sri Lanka, the Bank was keen to further penetrate in to the untapped market potential in microfinance.
Subsequent to evaluation of several options the Board of Directors of HNB Plc has decided to acquire a stake of 51% in Prime Grameen Micro Finance Limited for a consideration of Rs. 660Mn, subject to obtaining regulatory clearance, completion of a detailed due diligence and entering in to a shareholder agreement setting out the rights of HNB as the Major Shareholder.
Prime Grameen Micro Finance Limited incorporated inthe year 2000 is a flagship microfinance operator in Sri Lanka which is modelled based on the world famous Grameen concept and is adapted to suit domestic conditions. Over the years, the Prime Grameen has touched the lives of over 450,000 micro enterprises through its microfinance programme. Prime Grameen is currently owned by Prime Lands Pvt Limited, a market leader in real estate development.
Over the recent past Prime Grameen has recorded impressive performance with an annual loan growth of 24%, deposit growth of 33% and a return on equity of over 50% for the financial year 2013/14 while maintaining a high quality asset portfolio with a NPA level of below 1%.
Commenting on the acquisition Jonathan Alles, Managing Director / CEO of HNBPlc stated that “HNB’s expertise in serving the microfinance sector for over two and a half decades coupled with HNB’s strong brand equity, will enable Prime Grameen to accelerate growth while securing funding at attractive rates from local as well as foreign sources.As such,we are confident that theinvestmentin the professionally managed Prime Grameen Micro Finance Limitedwill further strengthen HNB’s commitment as a Groupin serving the financial services sector in the Country”.
Premalal Chairman Prime Grameen Micro Finance Ltd further added “We at Prime Grameen are absolutely delighted to enter into a partnership with HNB drawing up new vistas for the micro finance industry. The once troubled giant Grameen was restructured and resurrected within a period of three years and this partnership will provide the impetus for us to reach greater heights in the finance sector. We look forward to a great future with HNB and make a telling contribution towards the betterment of the national economy”
The proposed acquisition is also in line with the financial sector consolidation plans outlined by the Central Bank of Sri Lanka, under the financial sector road map 2014 and HNB Plc has made an announcement to the CSE in this regard in accordance with the disclosure requirementsof the CSE.
