Union Bank shares debut today

The much awaited listing of the historic Union Bank IPO will take place today on the Colombo Stock Exchange.

Having created history with its heavily over-subscribed IPO, Union Bank plans to consolidate the momentum gained, in its plans for the future. As the Bank enters a new phase of growth and utilises opportunities in a post-war scenario in Sri Lanka, it remains confident of blazing new trials in a sector recognised widely as a key stake holder in the country’s burgeoning economy.

Following the IPO which was over- subscribed by an astounding 417 times in the public category and 215 times in the customer category, Union Bank was also assigned BBB and P3 by RAM Ratings Lanka, which further confirms the Bank’s stability. The ratings are premised on the bank’s healthy capitalisation as well as adequate funding and liquidity positions.  Although Union Bank is seen as a smaller bank with a limited reach, the rapidly growing branch network will strengthen the bank’s presence throughout the island. Future plans include opening of over 45 new branches by 2013, using the new capital infusion, said Union Bank Director and CEO Anil Amarasuriya under whose stewardship the bank has set out to reach greater heights.

The innovative fund raiser which comprised of three stages including a Rights Issue and a Private placement prior to the IPO was handled in an extremely efficient and meticulous manner throughout the process by the Bank and its joint managers. Analysts maintain that the response to the Union Bank IPO was up to date the highest ever oversubscription in Sri Lanka and is easily one of the highest globally. The investor response clearly confirmed Union Bank’s status as a Power House in banking, able to attract and retain a very high level of interest and confidence.   

Union Bank’s portfolio of services covers a range of banking solutions covering SME, corporate banking, personal banking, trade and treasury services, Amarasuriya says that providing banking services to the SME sector gives them the edge in a competitive market. “We are small enough to offer the kind of flexibility to growing SME customers’ needs and large enough to fuel their growth into big time,” he added.

According to Amarasuriya the SME sector of today becomes the large corporations of tomorrow whose expansion and sustainability depends on reliable banking services provided from the inception.

With a strong product line up and recovery of non-performing loans gathering momentum, Union Bank remains confident of its own unique footprint in the banking industry. The fact that its Rights Issue was oversubscribed by four times and its Private Placement was oversubscribed by three times, together with the phenomenal success of the IPO, speaks volumes for the public confidence placed in the bank’s ability to deliver results.

The new infusion of capital will also ensure that the Union Bank is able to meet Central Bank’s core capital requirements successfully. The Bank’s branch network currently at 23, is set to expand to over ten branches being opened within the year, strengthening its reach among customers island-wide.  

Amarasuriya asserts that the Union Bank’s core strengths reinforce its stable position. “The bank is backed by a strong team of shareholders among whom are some of the world’s best known investors. With a solid financial presence and a range of innovative products, we are able to take on the challenges of a country experiencing a boom following the end of the war,” he added.

Amarasuriya said that the infusion of funds will also enable the Bank to maintain a wider visibility, seen as vital in a highly competitive banking sector. The banking sector has always been seen as a catalyst for economic growth in the country. “On the whole, Union Bank is confident of the role it plays in the banking sector, fueling growth and expansion while providing a highly customer focused service,” he added.