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Nine audit firms appointed, reports by 25 March
Mon Mar 24, 2014 9:39 am
By Mario Andree
Ceylon FT: After several reported concerns, the financial sector regulator, Central Bank of Sri Lanka has appointed nine audit firms to value banks and non-bank financial institutions. According to a senior official the reports would be finalized tomorrow, 25 March.
Assistant Governor of Central Bank C. J. P. Siriwardana told a forum organized by the Institute of Chartered Accountants that the regulator had appointed nine audit firms to submit valuation reports of banks and non-bank financial institutions.
The reports, according to him would be submitted to the Central Bank and the relevant financial institution by 25 March. Siriwardana without disclosing the actual cost borne by the Central Bank said it was a considerable sum which the regulator thought should not be a burden of financial institutions. "Further the Central Bank would bear the cost of consultant fee for necessary advice and guidance provided by other professionals on accounting, tax, valuation of business, HR issues," he said.
Many financial institutions were valued higher than their actual price, and according to Siriwardana values ranged from 1.5 times to 2.3 times higher.
Offers ranged from 1.1 times to 1.5 times higher for smaller entities than its value, while larger companies were valued 1.6 to 1.9 times of value, there are instances companies were valued at 2.3 times higher for acquisitions.
Most of the banks and non-bank financial institutions are currently negotiating with possible entities for mergers and acquisitions, but so far none has been finalized.
The Central Bank has requested merger or acquisition plans by end of this month, in its efforts to strengthen and reduce financial entities of the country to a manageable level.
NBFIs were expected to reduce to 20 including three specialized in micro finance, while, banks would be reduced as well, focusing five banks with more than Rs 1 trillion assets, a strong development bank, and few smaller banks to hold more than Rs 100 billion which would range their business in all aspects. Foreign banks were requested to have a wider presence in the country's economy.
At present there are 21 banks, with Cargills Bank being the last to obtain licence, and 58 non-bank financial institutions operating in the country.
www.ceylontoday.lk
Ceylon FT: After several reported concerns, the financial sector regulator, Central Bank of Sri Lanka has appointed nine audit firms to value banks and non-bank financial institutions. According to a senior official the reports would be finalized tomorrow, 25 March.
Assistant Governor of Central Bank C. J. P. Siriwardana told a forum organized by the Institute of Chartered Accountants that the regulator had appointed nine audit firms to submit valuation reports of banks and non-bank financial institutions.
The reports, according to him would be submitted to the Central Bank and the relevant financial institution by 25 March. Siriwardana without disclosing the actual cost borne by the Central Bank said it was a considerable sum which the regulator thought should not be a burden of financial institutions. "Further the Central Bank would bear the cost of consultant fee for necessary advice and guidance provided by other professionals on accounting, tax, valuation of business, HR issues," he said.
Many financial institutions were valued higher than their actual price, and according to Siriwardana values ranged from 1.5 times to 2.3 times higher.
Offers ranged from 1.1 times to 1.5 times higher for smaller entities than its value, while larger companies were valued 1.6 to 1.9 times of value, there are instances companies were valued at 2.3 times higher for acquisitions.
Most of the banks and non-bank financial institutions are currently negotiating with possible entities for mergers and acquisitions, but so far none has been finalized.
The Central Bank has requested merger or acquisition plans by end of this month, in its efforts to strengthen and reduce financial entities of the country to a manageable level.
NBFIs were expected to reduce to 20 including three specialized in micro finance, while, banks would be reduced as well, focusing five banks with more than Rs 1 trillion assets, a strong development bank, and few smaller banks to hold more than Rs 100 billion which would range their business in all aspects. Foreign banks were requested to have a wider presence in the country's economy.
At present there are 21 banks, with Cargills Bank being the last to obtain licence, and 58 non-bank financial institutions operating in the country.
www.ceylontoday.lk
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