Nepali business giant Binod says investment in Union Bank shows commitment to SL

  • With existing investments in SL’s hospitality sector, Nepal’s only multinational ventures into future financial services despite challenges
  • CG Corp’s global affiliate CG Capital Partners Singapore will buy TPG’s Culture Financial Holdings, which owns a 71% stake in Union Bank of Colombo, for Rs. 136.7 billion assets
  • CG Corp Global holds a controlling stake in Nepal’s first private commercial bank

By Nistar Qasim


Dr. Binod K. Choudhary


Nepali entrepreneur, politician and philanthropist Dr. Binod K. Choudhary said on Friday that his CG Corp Global’s acquisition of a controlling stake in Union Bank of Colombo (UBC) reaffirms its commitment to Sri Lanka despite the toughest of times.

UBC said Thursday that Singapore-based CG Capital Partners Global Ltd. entered into a share sale and purchase agreement with TPG Asia VI SF Ltd. to buy Culture Financial Holdings Ltd., which in turn owns 71% share in Union Bank of Colombo.

The transaction is subject to several conditions precedent, including regulatory approvals, according to UBC’s filing with the CSE.

“The acquisition reaffirms our continued commitment to Sri Lanka despite difficult times,” said Choudhary, who is listed by Forbes magazine as Nepal’s only billionaire. CG Corp Global is the only multinational company in Nepal and has over 160 companies with over 15,000 employees in 32 countries. His group through joint ventures has interests in Taj Lanka Hotels PLC and Jetwing Symphony PLC.

“Sri Lanka is going through difficult times amid a currency crisis and a reserve crisis. However, we decided to immerse ourselves in Sri Lanka in these difficult times. We know it won’t be easy, but it will be hard. This is the essence of our relationship with Sri Lanka,” Choudhary told the Daily FT.

“When times get tough, it gets tougher,” he quipped, adding that the latest investment reaffirms his and CG Corp Global’s strong trust and confidence in Sri Lanka.

Recalling his first investment in Taj Samudra Colombo in 2001 during the then raging North East conflict, CG Corp Global and Choudhary Group chairman Choudhary said, “We also got behind Sri Lanka when we saw the future potential.” He noted that then the investment was appreciated by the then government, the private sector and the people of Sri Lanka in general.

CG is also a leading player in Nepal’s financial services sector, including commercial and investment banking, insurance and the number one main agent of Western Union in Nepal. CG Corp Global owns the controlling stake in Nabil Bank Ltd., the country’s first private commercial bank. Nabil has been developing his business since July 1984.

Apart from financial services, CG Corp Global, whose origins date back to 1935, has extensive interests in a wide range of businesses, including food and beverage, hospitality (141 hotels and resorts in 12 countries with over 8,399 keys), cement, electronics, infrastructure , packaging, communications, real estate and education.

Following the announcement of the CG Corp global deal, shares of UBOC on Thursday rose one rupee or 13.3% to close at Rs. 8.50 but closed at Rs. 8.10 on Friday.

UBC’s total assets stand at Rs. 136.7 billion as of September 30, 2022, an increase of 15% over the end of FY21. The Union Bank group consisting of UB Finance Company Ltd. and National Asset Management Ltd., has assets worth Rs. 144 billion, a growth of 16%.

The bank continued to maintain robust capital adequacy, well above regulatory requirements, and the bank’s total capital ratio was 17.02% as of September 30. Publicly traded UBOC is 29% owned by 29,000 shareholders as of September 30, 2022.

In the third quarter of FY22, Union Bank said it saw an improved core banking performance amid challenges. It saw an improved core banking performance with total income of Rs. 5,343 million for the third quarter, an increase of 109% over the comparative period. For the nine months ended September 30, the bank’s total income rose 55% to Rs. 12.769 million.

The results of operating activities for the quarter stood at Rs. 298 million and the bank’s profit before tax (PBT) including the reported share in subsidiaries for the third quarter was Rs. 93 million and the bank’s profit after tax (PAT) was Rs. 74 million. The group recorded PBT of Rs. 130 million for the quarter and Rs. 525 million for the nine months ended September 30.

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