The Sri Lankan banking sector is quite steady and had made fabulous profits during the recent past despite the allegation by some that bank heads and major shareholders were selling their shares and moving out of the banking sector since it is going to collapse.
However, all commercial banks both state and private made heavy profits during the last few years despite all odds, banking sources said.
Recently top investors U.K Sharma sold 10 percent of his shares in the National Trust Bank, a subsidiary of John Keells Holding, while Nimal Perera, Chairman, Pan Asia Bank sold 15 percent shares to a Japanese investment bank.
Banking sources said that these transactions by individuals were not done with the intention of departing the banking sector but to earn a higher return on their investment or for the best interests of their respective companies .
Further, Union Bank Chairman Alex Lovell who also contemplated selling his shares in the stock market had subsequently changed the decision due to manifold reasons, certain media reported. But, banking sources said these transactions occurred mainly for capital gains, as bank share prices was going up in the stock market. Pan Asia Bank Chairman Nimal Perera told Daily News Business that he had a commitment towards the company to sell 15 percent of his shares to pave the way for the leading Japanese investment bank “Bansai Securities” to enter Pan Asia.
“I sacrifice my shares for the best interest of our bank, because 15 percent shares were not available in the local market. This enticed me to sell them to Bansai Securities. Therefore, I will not get any profits since I am now trying to re-purchase them soon,” Perera said.
Perera held more than 500,000 shares in the Pan Asian Bank and would acquire them shortly despite the speculations that he was leaving the sector.
Head of Marketing and Sales, Lanka Securities Pvt Limited, Eardley Kern said that during the last few years almost all the banks in the country made profits and there is no reason for anybody to exit the local banking sector.
He said that as shareholders they buy and sell shares for capital gains. In Pan Asia's case Nimal Perera sold his shares for a particular reason but he still remains its chairman. The opinion of the majority of bankers was that Sri Lanka’s banking industry was on the right track, Rating agencies said.