Fitch rates BOC’s Basel III Sub-Debt ‘AA(lka)’

Fitch Ratings has assigned Bank of Ceylon’s (BOC, AA+(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated unsecured debentures a final National Long-Term Rating of ‘AA(lka)’.

The debentures, totalling up to Rs 8 billion are to have maturities of five and eight years and carry fixed- and floating-rate coupons. The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange.

The debentures are to qualify as Basel III compliant regulatory Tier II capital for the bank and include a non-viability trigger upon the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka.

The final terms indicate that the notes are subject to temporary or permanent write-down as determined by the Monetary Board of Sri Lanka and can be partially or fully written down upon the occurrence of a trigger event. There are no equity conversion provisions in the terms. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on October 26, 2017.
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Nations Trust Bank in rights issue

Nations Trust Bank (NTB) is to undertake a rights issue of 40,105,614 ordinary non-voting convertible shares in the proportion of four shares for every 23 held as on January 12, 2018, subject to approval by the CSE and shareholders, the bank said in a stock exchange filing. The rational to issue non-voting shares with a conversion option, as opposed to another class/type of security is, in its efforts to raise capital to meet regulatory requirements, to augment the anticipated balance sheet growth, NTB said.

Non-voting shares would give the bank the ability to source full subscription from all shareholders for the rights issue despite the restrictions placed by the Central Bank on shareholders carrying voting rights, the bank said.
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Sampath Bank in mega quest to raise Rs. 20 b via Rights, Debt

* Fresh capital-boosting move comes hot on the heels of oversubscribed Rs. 6 b debenture issue

Sampath Bank yesterday announced an unprecedented move to raise a mammoth Rs. 20 billion to boost its capital via equity and debt issues, hot on the heels of raking in Rs. 6 billion via debentures last week.

The third largest private bank and one of the industry’s best performing so far this year, Sampath Bank announced a three for 13 Rights Issue at Rs. 250 each. The move will involve the issuance of 50.13 million shares and raise Rs. 12.5 billion. Additionally, the bank also announced an issue of 50 million five-year Listed, Rated, Unsecured, Subordinated, Redeemable, Basel III Compliant Convertible Debentures with an option to issue up to a further 25 million convertible debentures in the event of an oversubscription at a consideration of Rs. 100 each.

The combined issues will raise a maximum of Rs. 20 billion aimed at boosting the capital of the bank to comply with the stringer Basel III requirements.

The announcement of a fresh round of fundraising comes soon after it raised Rs. 6 billion last week via a Basel III compliant, Tier II, rated, unsecured, subordinated, redeemable, five-year debenture issue, which was oversubscribed on Friday.

Funds raised via the debenture were to be used to support its loan book expansion and to strengthen its Tier II capital base.

Pending yesterday’s announcements, the trading of Sampath Bank shares was suspended but thereafter the stock closed at Rs. 315, down by Rs. 16.20 or 5%.

The net asset value per share as of 30 September 2017 was Rs. 287 at the Bank level and Rs. 317 at the Group level, up from Rs. 239 and Rs. 267 from 31 December 2016.

Continuing its robust growth momentum, Sampath Bank achieved Rs. 8.5 billion in Profit After Tax (PAT) within the first three quarters of 2017, up by 26.2% from a year earlier. Profit Before Tax (PBT) too grew by 32% YoY to reach Rs. 11.8 billion for the nine months ended 30 September 2017.

The Group, which comprises the bank and four fully-owned subsidiary companies, also posted a growth in PAT and PBT of 26.5% and 32.4% respectively for the nine months ended 30 September 2017.

Sampath Bank’s total asset base grew by 14.3% (annualised 19%) during the period under review to reach Rs. 752.8 billion as at 30 September 2017.

In comparison, the total asset position as at 31 December 2016 stood at Rs. 658.5 billion. Gross loans and receivables grew by 17.2% (annualised 23%) to hit Rs. 549.2 billion as at 30 September 2017, growing by Rs. 80.7 billion for the nine-month period. The total deposit base too increased by Rs. 95.4 billion for the same period, to reach Rs. 611.6 billion as at the reporting date, a growth of 18.5% (annualised 25%).

However, at 34.1%, the CASA ratio as at 30 September showed a decline compared to the 38.4% registered on 31 December 2016. The decline can be attributed to the higher growth recorded in the fixed deposit base.

Post third quarter results, the bank said its Common Equity Tier I Capital, Tier I Capital and Total Capital Adequacy ratios as at 30 September 2017,which stood at 8.46%, 8.46% and 11.85% respectively, have been computed based on Basel III requirements for the first time. All three ratios stood well above the minimum regulatory requirement of 6.25%, 7.75% and 11.75% respectively.

Vallibel One Plc, controlled by business leader Dhammika Perera, owns 15% stake in Sampath Bank followed by Ishara Silva (10%), the Employees Provident Fund (10%) and Rosewood Ltd. (5%).

www.ft.lk

Sri Lankan stocks fall for 4th straight session

Reuters: Sri Lankan shares fell for a fourth straight session on Wednesday, as investors offloaded stocks of beverages and oil palm companies, while a block deal pushed up turnover.

The Colombo Stock Index ended 0.06 percent weaker at 6,321.36, its lowest close since April 11. The index was down 0.4 percent last week, its sixth consecutive weekly decline.

“Today is also a very dull day. But a block deal pushed the turnover,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“The dull sentiment will continue with the holidays ahead.”

Sampath Bank Plc, which announced a rights issue to increase its tier 1 capital to comply with Basel III requirements, dropped 1.4 percent. Nestle Lanka Plc fell 2 percent.

Turnover stood at 897.3 million rupees ($5.86 million), less than this year’s daily average of 933.3 million rupees.

Foreign investors net sold 79.6 million rupees worth of shares on Wednesday, but they have net bought 18.3 billion rupees worth of equities so far this year. 

($1 = 153.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Sri Lanka buys aviation fuel from LIOC to meet rising demand

ECONOMYNEXT – Sri Lanka’s state-owned refiner Ceylon petroleum Corporation has bought 14,000 metric tonnes of aviation fuel from the local unit of Indian Oil Corporation to maintain stocks owing to a hike in demand.

The Ministry of Petroleum Resource Development said in a statement the fuel, bought from Lanka IOC, was being unloaded and had met the required quality standards.

The tanker which brought the stock of fuel had berthed on December 10.

The first sample drawn to test the fuel did not meet the required quality levels, apparently because of rust, the statement said.

But a second sample drawn on December 17 met the standard as the rust had settled in the hold, it said.

Nathan Sivagananathan on Sri Lanka’s Dunamis Capital Board

ECONOMYNEXT – Sri Lanka’s Dunamis Capital, which has interests in financial services and real estate, has announced the appointment of Nathan Sivagananathan as a director of its board with effect from 18th December 2017.

Sivagananathanis is an entrepreneur and Chief Growth Officer and a member of the board of a leading apparel company, a statement said.

He holds a BSc. in Engineering Management from the University of Hertfordshire, UK and has completed the Advanced Management Program at Harvard University, USA.

Sivagananathan an active angel investor in the island, trying to uplift startups and take them global.

Sri Lanka 03-month Treasury Bill yield falls to 7.69-pct

ECONOMYNEXT – Sri Lankan Treasury Bills yields fell across maturities at an auction Wednesday with the 03-month bill yield falling 28 basis points to 7.69 percent from the previous auction.

The central bank’s public debt department said the 06-month bill yield fell 08 basis points to 8.40 percent at the auction from 8.48 percent last week.

The 01-year bill yield fell 12 basis points to 8.92 percent from 9.04 percent last week, it said.

The public debt department got bids worth Rs36.4 billion and accepted bids worth Rs14.5 billion.