NDB Group concludes deal with AIA Group

Following a strategic rearrangement of investments within the group, NDB recently entered a share sale and purchase agreement with AIA Group Limited (AIA), which is headquartered in Hong Kong, whereby NDB Group agreed to sell its shareholding in the Aviva NDB Holdings Lanka (Pvt.) Ltd. (Aviva NDB Holdings or ANI) to AIA.

In September 2012, AIA agreed to acquire a 92.3 per cent stake in ANI, representing both NDB Group’s shareholding as well as the shareholding in ANI of British insurer Aviva. Having met the necessary regulatory and legal requirements, the transaction has now reached finality and thereby NDB group earned a net receipt of US$ 59 million arising from the transaction.

With the objective of continuing to provide all financial services under one roof, NDB also entered into an exclusive Bancassurance agreement with AIA for a period of 20 years. The long term arrangement stands witness to the commitment of NDB Group and the new controlling shareholder, AIA to continue to provide their customers with a wide and leading range of Insurance products.

Pursuant to this transaction, as part of the group’s plans to realign the resources gained from the above sales proceeds, NDB entered into a second transaction to purchase the balance of the shareholding of NDB Aviva Wealth Management PLC from AIA.

With the completion of this transaction, NDB Capital Holdings, which now owns 100% of the wealth management arm of the group, will be able to further harness the strengths of the wealth management portfolio of the company, thus consolidating its position as the market leader in wealth management in Sri Lanka. Concurrently, a fund management agreement has also been placed to manage ANI’s insurance funds exclusively for a period of 20 years.

Commenting on this transaction, CEO of NDB Group, Russell De Mel said, “We are indeed pleased to have finalised our agreement with AIA, one of the world’s leading insurance companies. Our partnership with AIA will further strengthen NDB group’s current success in the Bancassurance and insurance arena.

“Through the agreement, insurance, the third pillar of the NDB Group, will continue to exist with an even stronger alliance in Bancassurance with AIA. The net receipts of US$ 59 million, arising out of these transactions, have given an opportunity for the NDB Group to further strengthen the strategic alliances within the financial services sector whilst enhancing and releasing core capital; a prerequisite to boost organic and inorganic growth of the NDB Group. This is very timely to take on the emerging opportunities to become a significant national and regional player in the financial sector and contribute further to the growth of Sri Lanka.”

The NDB Group will continue to invest in the aggressive growth of its core banking activities of project and infrastructure financing, corporate banking, retail banking, and SME financing; while strengthening the strategic investments in its investment banking cluster for the growth of its investment banking operations in Sri Lanka and Bangladesh, while harnessing its wealth management and stock brokering businesses under the recently formed NDB Capital Holdings PLC.

NDB is one of the fastest growing financial conglomerates in Sri Lanka, with regional operations spanning to Bangladesh and Maldives. Its unique financial positioning of the universal banking proposition is firmly backed by the bank’s strong financial profile in terms of its capital base, profitability and asset quality. Maintaining the highest standards of competence and probity, the NDB Group is firmly positioned to take on the economic growth taking place in Sri Lanka.