Bank leadership changes

aj · 1 Bank leadership changes Thu Dec 29, 2011 8:54 am

aj

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So far two of the major banks has changes in the leadership.

Dhammika to be appointed Chairman of Sampath Bank
http://www.ft.lk/2011/12/29/dhammika-to-be-appointed-chairman-of-sampath-bank/

Mahendra resigns as COMBank Chairman; Captains’ buy in
http://www.ft.lk/2011/12/29/mahendra-resigns-as-combank-chairman-captains-buy-in/

In the case of Sampath almost the whole board is replaced by a new set of people. Harris resigned earlier from CEO position. He was a great person. Now the leadership has gone to a big player. For investors I think this is not going to be good news. He will play his own agenda, he owns part of the bank, he will think of it as part of his private business. not what is good for investors. May be that's one reason Sampath has been falling. It's not a good thing that a whole experienced leadership is changed to new set of people.

Long term investors be aware of these things.

godswen · 2 Re: Bank leadership changes Thu Dec 29, 2011 9:26 am

godswen

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aj wrote: He will play his own agenda, he owns part of the bank, he will think of it as part of his private business. not what is good for investors. May be that's one reason Sampath has been falling. It's not a good thing that a whole experienced leadership is changed to new set of people.

Long term investors be aware of these things.

Just a thought here, Wouldn't he do his best Since he owns a part of Sampath Bank, If he try out his 'own agendas' and fail his investment will also fail! His investment to be a success, the whole bank has to do well.

Plus I don't think DP is new/inexperienced at all to this sector. And he is a good investor him self, he has his own ways of investing.

aj · 3 Re: Bank leadership changes Thu Dec 29, 2011 9:41 am

aj

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godswen wrote:
Just a thought here, Wouldn't he do his best Since he owns a part of Sampath Bank, If he try out his 'own agendas' and fail his investment will also fail! His investment to be a success, the whole bank has to do well.

Plus I don't think DP is new/inexperienced at all to this sector. And he is a good investor him self, he has his own ways of investing.

Some banks had this power struggle for a long time. Think about tile companies who instead of concentrating on tile business go on buying conglomerate shares. Big players won't fail. They always win. Big players want power not good businesses. Think about alcohol companies instead of developing their core business which is produce and sell liquor go on buying other companies not related to their expertise. When you have big players like these, the minority investors always fail. Samapth used to give a healthy dividend.

godswen · 4 Re: Bank leadership changes Thu Dec 29, 2011 9:45 am

godswen

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aj wrote:
Some banks had this power struggle for a long time. Think about tile companies who instead of concentrating on tile business go on buying conglomerate shares. Big players won't fail. They always win. Big players want power not good businesses. Think about alcohol companies instead of developing their core business which is produce and sell liquor go on buying other companies not related to their expertise. When you have big players like these, the minority investors always fail. Samapth used to give a healthy dividend.

Yes you have a point there aj, will see what's going to happen. We, small scale investors have to be careful always as you said.

sriranga · 5 Re: Bank leadership changes Thu Dec 29, 2011 11:29 am

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Thanks aj and godswen.
Very interesting points to be noted.

smallville · 6 Re: Bank leadership changes Thu Dec 29, 2011 9:33 pm

smallville

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Unrelated diversification is also a strategy to make more money from unknown businesses, if a correct feasibility study being carried out before moving in, it can turn out to be a profit making venture..

Sometimes there wont be much to develop on core business other than to maintain the market share, in that case, its always profitable to diversify in to another area... whether known or unknown is up to the company Wink

See how LOLC is goin into many business ventures..

Whether this is a power struggle or not, in this case I think DP wont let the company fall due to his baby VONE gets affected on bottom line performance, similarly LFIN, RCL would also have to perform well..
not sure his agendas on selling his property for LFIN head office, it can be a wise move to keep money rolled or a bad move as he's not selling it at a low price than market Wink

However, I dont think we should get panicked now..

TortoizePlus · 7 Re: Bank leadership changes Fri Dec 30, 2011 12:56 am

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I also believe that Mr DP’s appointment as SAMP chairman as a plus point. He is the major shareholder of SAMP (through VONE) and will do his best to maximizing shareholder wealth.

There is one rule that I strongly follow when selecting stocks , ‘The stock should have ownership by top management.’