Chaudhary Group completes deal to acquire majority stake in Union Bank

• “We are taking a strategic growth approach to make Union Bank to be amongst top private commercial banks in Sri Lanka”- Binod Chaudhary

The Colombo Stock Exchange was yesterday informed that the Nepalese billionaire Binod Chaudhary’s CG Corp Group has completed the deal to acquire the majority stake of Union Bank of Colombo PLC.
The deal was first announced in December 2022 and received the Central Bank and Finance Ministry nod in September 2023.
Accordingly, CG Capital Partners Global Ltd, a private company incorporated under the laws of Singapore, has acquired Culture Financial Holdings, which owns 71 percent shares of Union Bank.

The transaction was carried out as an off-market deal, at an undisclosed price. The Union Bank share closed at Rs.10.30 yesterday, up 10 cents or 0.98 percent from the previous close.   CG Corp Global is one of the leading conglomerates in Asia, with over 160 companies and 123 brands in the global market, along with the strength of more than 15,000 employees.  It is a major player in many industries such as banking and finance, hospitality, cement, hydropower, telecommunication and education. 
The company is a major player in the financial services sector in Nepal and Nabil Bank, where it is the largest shareholder, is listed as the largest private bank in the Nepalese Stock Exchange.

This is not the first time CG Group has set its sights on Sri Lanka, as it already holds major shares in several high-end properties, luxury hotels and resorts across the country and is further expanding its investments towards the financial services sector as well.  “This is a major investment towards the financial service sector in Sri Lanka and to Union Bank. The bank has had a strong track record and has further potential to grow and do greater things to achieve more milestones in the banking sector. We are taking a strategic growth approach to make Union Bank to be amongst the top private commercial banks in Sri Lanka,” CG Corp Global Chairman Dr. Binod K. Choudhary said in a statement.

“This growth expansion could see further consolidations and acquisitions. The acquisition and transition of Nabil Bank to become Nepal’s largest bank is a fine example. Based on CG’s core competencies and expertise, we want to also look at the possibility of Union Bank’s expansion to emerging and frontier markets such as Africa, Nepal and Bhutan. It is great to be associated with this well-reputed and well capitalised bank in Sri Lanka,” he added. Union Bank CEO Indrajit Wickramasinghe said the partnership with CG Capital would be an immense boost to the bank’s next stage of growth, its staff and its customers as it progresses to take on new opportunities. “Being amongst the banks with a highest capital adequacy ratio, this partnership reaffirms the bank’s financial stability and further supports its future strategic expansion and will act as a catalyst for the bank’s growth journey,” he added.

New Directors, Acting Chairman appointed

 Following the completion of the acquisition, CG Group yesterday announced its appointments to the board of directors of Union Bank.
Accordingly, Nirvana Chaudhary and Malay Mukherjee have been appointed as Non-Independent Non-Executive Directors of the bank, with effect from October 26, 2023, subject to the approval of the Central Bank. Chaudhary is presently Managing Director of CG Capital Partners Global Pte. Ltd Singapore and he is also Director of Nabil Bank Limited, Nepal. Mukherejee, with over 42 years of banking experience, also serves as a Director of Nabil Bank, Nepal. 

Their appointments come in the wake of the resignations of Chairman Atul Malik and Directors Puneet Bhatia and Michael J. O’Hanion, who represented the interests of Culture Financial Holdings on the Union Bank’s board. Meanwhile, current Deputy Chairman Trevine Fernandopulle, has been appointed as Acting Chairman of Union Bank, with effect from October 25, following Malik’s resignation. Fernandopulle is a veteran banker, with over 40 years’ experience in the financial services sector.