Bank Sale

Dec 27, 2008 (LBO) – Sri Lanka's Ceylinco group will exit Seylan Bank, a licensed commercial bank, as part of a strategy to raise funds and repay depositors in a troubled group company, chairman Lalith Kotelawala said in a public statement. Golden Key Credit Card Company failed to repay customers who had placed funds in the firm as a deposit for a credit card. Kotelawala who met customers on Tuesday promised to repay them.

"I have therefore now taken a decision to divest the investment in my beloved bank, Seylan Bank, which I founded 20 years ago and honour the debts of Golden Key Card holders," Kotelawala said in a public statement placed in newspapers.

"I will be taking necessary steps to obtain permission from the relevant regulatory authorities in this regard."

Kotelawala said Seylan is the third largest private sector bank in the island. The bank has over 100 branches.

LBO learns that discussions are underway to find a local or foreign bank to take-over Seylan.

Seylan Bank closed down 75 cents at 15.75 Friday, but analysts say a controlling stake would be worth much more.

Commercial banking licenses are also no longer issued and the minimum capital requirement for a bank is around two billion rupees. "I