HNB Investment Bank to transform financial landscape

HNB Managing Director and CEO Damith Pallewatte (right) with HNB Investment Bank Group CEO and Managing Director Ray Abeywardena at launch of new entity yesterday – Pic by Sameera Wijesinghe  

• Aims to create seamless financial ecosystem by integrating stockbroking, securities and investment banking
• HNB PLC Managing Director and CEO Damith Pallewatte aims to attract more investors, including upper-middle class individuals beyond corporate clients
• Plans sector-specific investment funds for SMEs, fintech, agritech, meditech and export industries
• Supports Colombo Port City development to woo FDIs
• Assures commitment to bridging local businesses with global capital for economic recovery
• Explores potential stock market listing in future based on performance
• Shares participation in two major investment roadshows in 1H
• HNB Investment Bank Group CEO and Managing Director Ray Abeywardena says poised to set a new benchmark, creating a powerful force in financial services industry
• Asserts firm well positioned to introduce digital investment banking services, enhancing accessibility and efficiency for broader range of investors

By Charumini de Silva

Hatton National Bank PLC (HNB) yesterday announced the successful acquisition of full ownership of Acuity Partners Ltd., whilst rebranding the entity as HNB Investment Bank, reinforcing its commitment to offering a more integrated and sophisticated suite of financial solutions to transform the country’s financial landscape. 

On 20 January 2025, HNB PLC declared  the conclusion of the purchase of the remaining 50% stake in Acuity Partners Ltd., from DFCC Bank for Rs. 6.5 billion. 

Acuity Partners, previously a joint venture between HNB and DFCC Bank PLC has played a significant role in the financial sector through a network of subsidiaries specialising in corporate finance, stockbroking, primary dealer service and venture capital investments.

HNB Investment Bank aims to create a seamless financial ecosystem, integrating its stockbroking, investment banking and Government securities under one roof. With the acquisition, its subsidiaries will now operate under the HNB Investment Bank umbrella, bringing together a diverse range of financial services under a single brand.

Acuity Stockbrokers will now operate as HNB Stockbrokers, while Government securities trading will be conducted through HNB Securities. HNB Investment Bank will provide capital market solutions, corporate advisory and financing services, and consolidation expertise across these sectors.

The HNB Investment Bank will provide advisory services in mergers and acquisitions, capital markets and corporate finance, strengthening its position in a sector that is undergoing rapid transformation. The move also aligns with HNB’s broader vision of expanding its influence in both domestic and international financial markets, capitalising on its financial strength, and deep industry expertise.

Speaking at the launch, HNB PLC Managing Director and CEO Damith Pallewatte described the acquisitions as a landmark moment for the bank. “We are pleased to welcome Acuity Partners as a wholly owned subsidiary and unveil its new identity as HNB Investment Bank,” he said, adding that the company had a long-term bold vision in the acquisition. 

He asserted that the rebranding represents more than a change in name — and more of its commitment to delivering a full spectrum of investment banking solutions and elevating its role in the capital markets.

“We see a lot of growth of opportunities, particularly in the equity related investments, private equity and capital market and wealth management,” he said, asserting that HNB Investment Bank is also open for collaborations.

Pallewatte spoke of a new era for Sri Lanka’s financial sector, positioning the bank as a key driver of economic recovery and investment growth. He highlighted the importance of bridging the gap between Sri Lankan enterprises and global capital, particularly as the country seeks to re-establish itself following economic turbulence.

“Sri Lanka stands at a pivotal moment of its economic recovery. We are emerging from one of the most challenging periods in our history. As global markets evolve, there has never been a more critical time for forward-thinking investment banks that can connect local businesses with international investors,” he said.

Pallewatte told the Daily FT that one of the core strategies of HNB Investment Bank is to widen access to investment opportunities beyond traditional corporate clients and high-net worth individuals. The firm aims to develop investment tailored for upper-middle class investors, addressing a long-standing gap in the market.

“We want to break the barrier that limits investment banking to large corporations. Our goal is to introduce long-term investment opportunities that encourage a more structured approach to wealth creation, rather than the current pattern where investors simply shift between equities and fixed income depending on interest rates,” he added.

Pallewatte said another key initiative is the creation of sector-specific investment funds to channel capital into high-growth industries. “HNB Investment Bank is considering funds focused on SMEs, fintech, agritech, meditech and other emerging sectors, providing both investors with stable returns and entrepreneurs with access to essential growth capital,” he noted.

Rather than focusing on sectors that require high levels of imported raw materials, he said HNB Investment Bank plans to promote industries that maximise local value addition, such as seafood processing, export-oriented agriculture and horticulture. These industries, Pallewatte argued, offer higher returns while ensuring that a greater share of investment proceeds remains within the local economy.

HNB PLC Managing Director said the bank also sees significant potential in Colombo Port City to attract foreign direct investments (FDIs).

“FDI is the need of the hour. We want to see the referrals for investments being translated into actual investments. As an investment bank, we are committed to align with the national agenda as the HNB PLC had done in the past 130 years,” he stated.

Having worked closely with Port City Developers over the past five years; he said HNB Investment Bank aims to provide a trusted investment platform for global investors’ entering the Sri Lankan market.

“When foreign investors look at Port City, they need global standard investment options. They want to know where they can park their funds while waiting for deployment and they need a reliable financial institution to manage their capital. We see a clear opportunity to fill that gap and support global standard investment flow,” he said.

When inquired about plans to list HNB Investment Ltd., Pallewatte said they would first want to develop the company and depending on the performance after a few years, the firm would decide on it.

He also revealed that HNB Investment Bank is set to participate in two major investment roadshows within the first half of this year, with a focus on promoting Sri Lanka as a destination for global investors.

HNB Investment Bank Group CEO and Managing Director Ray Abeywardena described the transformation as a strategic fusion of legacy and innovation, positioning the institute as a major player in the region’s financial services industry.

“We are poised to set a new benchmark in the financial arena,” he added.

Abeywardena reiterated its commitment to expanding investment banking and advisory services, enhancing financial inclusivity for a broader range of investors, leveraging digital transformation to improve client experiences and strengthening capital markets and economic development.

“HNB’s century-old legacy, combined with our specialised investment banking expertise, creates a powerful force in the financial services industry,” he stressed.

“The financial services landscape is evolving rapidly and technology will play a crucial role in delivering next generation investment banking solutions. With the full backing of the HNB PLC, we are well-positioned to introduce digital investment banking services that enhance accessibility and efficiency for a broader range of investors,” Abeywardena added.