HNB raises $ 50 m from Chinese Development Bank

Thursday, 29 March 2012 00:06 - - {{hitsCtrl.values.hits}}

Hatton National Bank PLC (HNB) yesterday signed an agreement to raise US$ 50 million through a five-year long-term loan from China Development Bank Corporation (CDB).

This is part of the bank’s capital raising plan which commenced in mid-2011 to raise over Rs. 20 billion in equity and debt capital. Under the program the bank has thus far raised over Rs. 18.5 billion through a combination of tier I and tier II capital and senior debt to finance the development in post war Sri Lanka.

China Development Bank is one of the State-owned banks of the People’s Republic of China with a total asset base of approximately US$ 1 trillion. It has successfully managed the balance between growth and risk as indicated by the NPA level which has been below 1% over the past eight years.

China Development Bank is the strongest rated bank in China and has been awarded an international credit rating equivalent to the sovereign rating of China by Fitch Ratings and an international rating which is one notch below the sovereign rating by Standard & Poor’s.

CDB has entered into financial collaboration agreements with over 50 countries around the globe, including BRICS and ASEAN countries and European nations. This is the first-ever transaction by China Development Bank with a private bank in Sri Lanka and it marks the beginning of continuous cooperation between the two parties for mutual benefit.

The agreement was signed by Chairperson Dr. Ranee Jayamaha and Managing Director/CEO Rajendra Theagarajah on behalf of Hatton National Bank PLC and Deputy General Manager Guangxi Branch Wei Peng on behalf of China Development Bank Corporation.

Speaking at the occasion, Dr. Jayamaha stated: “The funds raised from China Development Bank will boost the loanable funds available to HNB and the bank hopes to benefit from the cooperation and new relationship with China Development Bank in the future.”

Theagarajah said: “The ability of the bank to raise funds during a short period of time from a well-reputed foreign source at a very attractive rate of interest is a testament to the strong and sustainable growth recorded by the bank over the past.”

Political Counsellor/Acting Ambassador representing the Embassy of the People’s Republic of China Ren Faqiang added: “China Development Bank Corporation is extremely pleased to join HNB on this historic occasion to sign this financial cooperation agreement to support developments in Sri Lanka. This marks the disbursement of more than US$ 1 billion by China Development Bank to Sri Lanka during the past one year and we look forward to further opportunities of collaboration to support the development efforts of this country.”

Qui Xiaoyu from China Development Bank said: “This US$ 50 m loan symbolises the strong relationship between our two banks. CDB is willing to provide financing and other supports to Sri Lanka and also willing to explore more opportunities for cooperation with HNB.”