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Wednesday, February 9, 2011

PMB to restructure Peoples Merchant Finance

By Thushantha Jayatilaka

After the recent Central Bank directive to not to acquire 100% of Peoples Merchant Finance (PMF), formerly Silvereen Finance by Peoples Merchant Bank (PMB), the company now hopes to give a much needed impetus for the once ailing finance company by way of restructuring it.

Speaking to DM Business Anura Wickremasinghe, CEO Peoples Merchant Bank said the restructuring process is underway and they hope to expand its level of operations by opening a branch in Colombo, and taking advantage of Peoples Bank's strength and stability.

"We have a brand such as Peoples Bank to leverage upon. It is a trusted Institution locally and internationally, we will leverage PMF on the strength of Peoples Bank."

Further he added the company will be going public before July 2011 as per the directive of the Central Bank and 10% from the total deposit base will be converted into equity. Wickremasinghe stated the main reason to go public is to infuse fresh capital for expansion and to bring transparency to its operations.

Answering a question as to why the Central Bank denied permission for acquisition of Peoples Merchant Finance he said it was a strategic decision and it will in no way impact the core business of PMB.

"Peoples Merchant Bank and Peoples Merchant Finance will operate as separate entities" he added.

Speaking further he said the main reason for PMB to acquire Silvereen was that it had a manageable portfolio and the license from Central Bank to accept public money. According to the CEO the decision to acquire Silvereen was made by previous directors and his primary task is to now restructure the company.

People's Merchant Finance hopes to venture into new business areas such as pawning and savings in the future, in order to give a broad based service to its customers, he added.

The present scale of operation of PMF is relatively small and the deposit base is less than Rs.70 million as at 31st March 2010 according to FY 2009/2010 PMB annual report.

source - www.dailymirror.lk