CG Capital Partners Global completes acquisition of Union Bank’s control
Daily FT: Union Bank has formally announced the completion of the acquisition of its majority control by CG Capital Partners Global Ltd., backed by Nepal’s only Forbes list billionaire and long-standing investor in Sri Lanka, Dr. Binod K. Choudhary. CG Capital Partners Global Ltd., acquired the 70.84% stake held in Union Bank by Culture Financial Holdings.
The formal announcement follows Union Bank saying that on 24 October 2023, the Board of Directors of Union Bank received formal notification that the transaction had been completed and the Colombo Stock Exchange (CSE) was notified of the same.
The completion of the acquisition comes nearly 10 months after Culture Financial Holdings TPG Asia VI SF in December 2022, entered into a sales and purchase agreement for the sale of the stake held in Union Bank to CG Capital Partners.
TPG nominees Atul Malik (Chairman), Puneet Bhatia and Michael J O’Hanlon announced their resignation from the Union Bank Board.
CG Corp separately announced the appointment of veteran banker formerly from HSBC Sri Lanka and Bank of Ceylon, Trevin Fernandopulle as the new Non-Executive Chairman of Union Bank. CG Corp Global Chairman Dr. Binod K. Choudhary’s son Nirvana Kumar Chaudhary who is also Managing Director of CG Capital Partners Global Ltd., Singapore and Malay Mukherjee, Director of Nabil Bank Nepal, and former Managing Director and Chief Executive Officer of IFCI Ltd., India, were appointed as Non-Executive Non-Independent Directors of Union Bank.
CG Corp Global (CG) takes pride as one of the leading conglomerates in Asia with over 160 companies and 123 brands in the global market with the strength of more than 15,000 employees. It is a major player in many industries such as banking and finance, hospitality, cement, hydropower, telecommunication, and education. The company is a major player in the financial services sector in Nepal and Nabil Bank where it is the largest shareholder and is listed as the largest private bank in the Nepalese Stock Exchange.
In a statement, Union Bank said this is not the first time CG has set its sights on Sri Lanka. It holds major shares in several high-end properties, luxury hotels and resorts across the country and is further expanding its investments towards the financial services sector as well.
“This comes as a reaffirmation of its commitment to Sri Lanka, by being a source of support and strength during these challenging and transitioning times, whilst reiterating the foreign investor confidence in Sri Lanka. This is a major milestone for Union Bank to have such an international powerhouse as the main shareholder,” Union Bank statement said.
In the statement it quoted CG Corp Global Chairman Dr. Binod K. Choudhary as saying, “This is a major investment towards the financial service sector in Sri Lanka and to Union Bank. The Bank has had a strong track record and has further potential to grow and do greater things to achieve more milestones in the banking sector. We are taking a strategic growth approach to make Union Bank to be amongst the top private commercial banks in Sri Lanka. This growth expansion could see further consolidations and acquisitions.”
He said CG Group’s acquisition and transition of Nabil Bank to become Nepal’s largest bank is a fine example.
“Based on CG’s core competencies and expertise, we want to also look at the possibility of Union Bank’s expansion to emerging and frontier markets such as Africa, Nepal, and Bhutan. It is great to be associated with this well-reputed and well capitalized bank in Sri Lanka. I believe, together much can be done as we move forward,” Choudhary added. As at end June 2023, Union Bank’s total assets stood at Rs. 129 billion.
Union Bank CEO lndrajit Wickramasinghe said, “Union Bank has established itself as one of the leading and reliable banks in the country. The partnership with CG Capital Partners Ltd., will be an immense boost to the bank’s next stage of growth, its staff, and its customers as it progresses to take on new opportunities. Being amongst the banks with a highest Capital Adequacy Ratio, this partnership reaffirms the bank’s financial stability and further supports its future strategic expansion and will act as a catalyst for the bank’s growth journey.”
CG Capital Partners Global Ltd., is an affiliate company of CG Corp Global. Established in 1935, CG Corp Global is a multi-business conglomerate synonymous with a Global Growth Company in Asia. Headquartered in Dubai, UAE with a strong presence in 35 countries, its core competencies include food and beverages, financial services, infrastructure, real estate, and hospitality.
With over 28 years of experience in the financial services sector in Sri Lanka, Union Bank offers a complete range of products and services to customers in the personal, corporate and SME banking segments with an island-wide branch network. Listed in the Colombo Stock Exchange, since 2011
Union Bank continues to remain resolute with a strong capital position well above the regulatory requirements. The Bank’s strategic diversifications include National Asset Management Ltd., (NAMAL), Sri Lanka’s premier asset management company and UB Finance Company Ltd. Brand Finance has ranked Union Bank amongst Sri Lanka’s most valuable 100 brands since 2012.
OSL take:
The latest acquisition of a Sri Lankan private bank by a foreign group is indicative of the growth potential in Sri Lanka, especially in the banking sector. Sri Lanka’s economic resilience to external and internal challenges through the years is also due to the strong banking network in the country. A strong banking system is a pre-requisite for a country looking at becoming an emerging business destination. Sri Lanka’s banking network that has withstood many challenges through the years is a confidence booster for foreign businesses/investors exploring business/investment opportunities in Sri Lanka. Foreign businesses/investors could also look at partnerships or acquisitions of local private banks due to the country’s overall growth and business potential as well as Sri Lanka’s potential to serve as a base for foreign businesses to engage with other countries in the region.
| Article Code : | VBS/AT/20231026/Z_2 |