Announcement To The Colombo Stock Exchange By Dfcc Bank And Hatton National Bank Limited

DFCC Bank and Hatton National Bank are actively considering the set up of an equally owned, Joint Venture Investment Bank to carry out the amalgamated Corporate Finance and Capital Markets businesses of the two Institutions. It is envisaged that the new Investment Bank will also be the Group Holding Company for the other related entities of the two banks including the Stock Broking and Primary Dealership businesses. The primary objective of this undertaking would be, through the pooling of the strengths and resources of DFCC Bank and Hatton National Bank, to attain a critical mass and enable synergies while providing the full service range of a typically integrated investment banking operation. The new entity will have an initial capital of approximately Rs. 500 million.

It is envisaged that Mr. Nihal Fonseka, General Manager and Chief Executive Officer of DFCC Bank, will be the Chairman of the Investment Bank while Mr. Jayantha Perera, Senior Deputy General Manager – Business Development & International, of Hatton National Bank would serve as Managing Director. The rest of the directorate will initially comprise senior management of the two banking groups including Mr. Rajendra Theagarajah, the Managing Director of Hatton National Bank.

The new entity will not need to seek a license under the Banking Act. However, since the two promoters are licensed banks, prior regulatory approval will be required to be obtained for this initiative. The process of setting up the Investment Bank, including the seeking of the required approvals from the Central Bank and other relevant regulatory agencies, would be initiated shortly with a view to commencing operations during the first half of this year.

5th March, 2007