US-based investment giant TPG reaffirms long-term commitment to Union Bank

As announced to the CSE by the bank, its major shareholder Culture Financial Holdings Ltd., through which TPG – the US-based investment giant holds 70% of Union Bank shares, has informed that they will not accept the offer to repurchase their shares, thus affirming its continued commitment towards the future progress of the bank.  

Union Bank announced a share repurchase offer which opens today and is scheduled to close on 11 July.  

The share repurchase of up to a maximum of 7,851,844 ordinary shares from its shareholders at the price of Rs. 15 per shares, amounting to a maximum distribution of Rs. 117,777,660 was approved by shareholders at an extraordinary general meeting convened by the bank on 11 June. 

The offer is made by the bank with the intention of improving the price of the bank’s shares to reflect its true underlying value and consequently improve the returns to the shareholders.

As per applicable law, the said offer is made to all shareholders of the bank, on a prorata basis. Accordingly, the offer will be made on the basis of one ordinary share for every 139 ordinary shares held by each shareholder.  

Where a shareholder does not accept the offer or accepts the offer only in part, the bank will repurchase additional shares from any shareholder who tenders shares over and above their prorata entitlement for repurchase by the bank (on a prorata basis) up to the aforesaid maximum number of shares that the bank intends to repurchase.

Union Bank has been making steady progress as a fully-feldged commercial bank over the years, having embarked on an accelerated growth strategy since the acqusition by the US investment giant TPG in 2014.  

The bank offers a wide gamut of banking propositions serving a diverse clientele across Retail, SME and Corporate segments and operates via an islandwide network of 67 branches along with digital banking platforms delivering seamless banking convenience. 

Union Bank is currently one of the fastest growing banks in Sri Lanka which has been doubling its Profit Before Tax (PBT) over the years and marked a milestone achievement with its PBT crossing Rs. 1 billion by the end of 2018. The bank is significantly over capitalised and is well-positioned in the market with the strength to grow organically as well as inorganically. 

Fitch Ratings Lanka recently upgraded Union Bank’s rating to ‘BBB-(lka)’  from  ‘BB+(lka)’ with a Stable Outlook, reflecting the bank’s better risk profile through a more diversified loan book, increased  profitability and higher-than-average capitalisation amongst other rating drivers.