Sampath Bank to raise Rs. 12.1 b via Rights Issue

Reflecting an aggressive capital raising, Sampath Bank has announced a Rs. 12.1 billion Rights Issue. 

The Bank’s Board, at its meeting, last week resolved to issue 89 million shares at Rs. 136 each via a Rights Issue of seven new voting shares for every 23 held. The basis is after considering the number of shares to be issued as scrip dividend (11.548 million ordinary voting shares), which is up for approval at the AGM on 29 March.

The current stated capital of Sampath Bank is Rs. 32.79 billion.

Funds raised via Rights will be to increase the Tier 1 capital of the Bank to comply with Basel III requirements. 

A fortnight ago, Sampath Bank successfully raised Rs. 5 billion via its third BASEL III compliant Debenture Issue.

Having pioneered Basel III compliant debentures in the Sri Lankan market in 2017, the sum raised by way of the debenture will go towards strengthening the Bank’s Tier 2 Capital base and further boost the Bank’s already strong Total Capital Adequacy ratio.  The proceeds will also be used to fund expansion of the Bank’s ongoing business activities.

In 2018, Sampath Bank’s total asset base crossed the Rs. 900 billion mark for the first time in its history and finished the year at Rs. 914.2 billion, up 15% from 2017. The Bank’s loan growth slowed down during the year predominantly due to low credit demand. Also, with portfolio quality affected as a result of weak economic conditions, the Bank began consolidating its activities and gross loans, which stood at Rs. 571.5 billion as at 31 December 2017, grew by only Rs. 99 billion (17.3%) to reach Rs. 670.3 billion by end 2018. 

Sampath Bank recorded a Profit before Tax (PBT) of Rs. 18.3 billion for the year ended 31 December 2018, up by 10.5% against Rs. 16.6 b earned in 2017.