NDB launches full service investment banking operations

By Cheranka Mendis

NDB Group yesterday introduced full service investment banking operations with the re-launch of Capital Development and Investment Company (CDIC) under a new corporate identity as NDB Capital Holdings Plc.

NDB Capital Holdings CEO and Director Vajira Kulatilaka (second from left) addresses the media yesterday. Others from left are NDB Capital Holdings Chief Operating Officer Kusal Jayawardana, NDB Capital Holdings and NDB Deputy Chairman Ashok Pathirage, NDB Group Chairman Hemaka Amarasuriya and NDB Group CEO Russell de Mel – Pic by Daminda Harsha Perera

Led by a team of market experts, the re-launch was a result of a three month restructuring exercise conducted by the Group. All NDB Group companies involved in investment banking activities have been brought under one roof, establishing a full service investment banking operation. Running on a complimentary business portfolio that includes fee-based investment banking and corporate advisory services, stock broking, wealth management, and fund based operations consisting of private equity and strategic investments.

NDB Capital Holdings Chairman Ashok Pathirage who is also Deputy Chairman of NDB yesterday noted that this was the perfect time to set up a full service investment banking operation in the country based on the growing economy, increasing commitment to infrastructure development across sectors and concentrated efforts on improving tourism.

“The country’s medium term GDP growth is expected to be in the region of 7% and the CBSL projects Per Capita GDP to reach US$4000 by 2016. With this the middle class is growing steadily and the general purchasing power and living standards would improve.”

He noted that the private sector is expected to play a vital role in facilitating the development process initiated by the Government which would require colossal capital investments that cannot finance by the traditional form of bank borrowings. A study done by Mackenzie confirmed that the banking sector cannot provide the country’s capital requirements in the future with the type of growth expected and that the capital market is expected to be the key driver of providing various forms of capital for the development of the country.

“Such projects would require innovative solutions and we believe capital markets would play a vital role in channelling finances for the corporate sector. This would create ample opportunities for credible banking service providers,” Pathirage said. On the other hand investors would look for investment products to suit their varying levels of profiles. “I am confident that NDB Capital Holding would act as a catalyst of the development process of the country offering a full range of investment banking services.”

NDB Capital Holdings CEO and Director Vajira Kulatilaka said that initiatives will be carried out through NDB Investment Bank, NDB Stockbrokers, NDB Aviva Wealth Management and NDB Capital on the investment banking cluster while Aviva NDB Insurance will provide the strategic investment. The need is to get better synergies and coordinated efforts to carry out investment banking and related activities, he said. Kulatilaka also acknowledged the strategic alliance with DBS Singapore and commented that the future plans include expending similar alliances with other foreign entities.

“We provide full range of services which includes fund raisings- IPOs etc which NDB Investment Bank has been doing along with corporate advisory; we also provide fund based services and NDB Capital now has a huge fund base which can be used for underwriting, private equity, other investment purposes. Stock brokering and wealth management is also undertaken.”

He emphasised that a number of landmark projects have been carried out with the likes of Lanka IOC, BOI etc along with new product introduction to the market. “In all products we have raised large number of funds in different companies in Sri Lanka as well as in Bangladesh.” In wealth management the company is managing approximately Rs. 50 billion worth of funds making it the largest private sector wealth management company in the country. On stock brokering the number of customers has been increasing over the years, he said.

“Issuers will be looking for low cost funds at an acceptable quantity and investors will look for returns to suit the risk profile. We connect investors and issuers that in capital market through equity, debt, hybrid and private equity by proper design of products done by NDB Investment Bank.” Risk will be managed primarily by NDB Insurance in the capital market.

NDB Group CEO Russell de Mel in a statement mentioned that there would be an enhanced level of activity in the areas of mergers and acquisitions and financial restructuring. “Sri Lankan entrepreneurs would be seeking joint ventures with regional and global players and risk management and mitigation products as the scale and complexity of business grow, giving ample opportunities for credible investment banking service providers.”

The officials noted that the Company represents the future of the capital market of the country.