Union Bank to announce IPO in February

Following a highly successful Rights Issue and a Private Placement, Union Bank of Colombo Ltd. will announce its much-anticipated IPO in February subject to regulatory approvals.

The bank’s recently announced Rights Issue was oversubscribed by four times while the Private Placement was oversubscribed by three times, reaching record levels of investor confidence.

The Rights Issue, Private Placement and the IPO were launched in an innovative, three tiered process that gave the bank unique leverage in building investor interest.

Widely seen as the last investment opportunity currently available in the banking sector, market sources confirm that Union Bank’s IPO has attracted much interest both locally and overseas.

The IPO is part of the bank’s Rs. 1.1 billion fund raising exercise.

The IPO will further facilitate the expansion of the bank’s operations and increase its lending capacity while enhancing new product development. The funding will also enable the bank to maintain a wider slice of visibility in a highly competitive market.

Union Bank’s portfolio of services covers corporate banking, personal banking, and trade and treasury services. The outstanding success of the Rights Issue, and Private Placement and the IPO means that the Union Bank will be able to fulfill Central Bank requirements of core capital adequately.

Union Bank CEO and Director Anil Amarasuriya said that a novel method of combined book building and a tender process was adopted in the Private Placement, ensuring wider scope for investor confidence.

The banking sector is considered a key growth area in the Sri Lankan economy and consists of licensed commercial banks and licensed specialised banks.

With a total asset base of Rs. 2.50 trillion and total deposits amounting to Rs. 1.85 trillion in 2009 alone, the banking industry is expected to lead the economic growth at a national level and build investor confidence in the country’s economy, ready to surge forward in the post-war recovery phase.

The bank is celebrating its 15th year of operations and Amarasuriya said: “We hope to make this anniversary year a special one aimed at making great strides in the banking world.”

He pointed out that in keeping with economic growth earmarked for small and medium enterprises, Union Bank will be offering innovative services and products targeted to suit the needs of the SME sector.

Union Bank’s branch network consists of 21 branches island-wide and is considering rapid expansion and growth with up to 10 new branches expected to open in the coming months.

The bank has made innovation its foundation and is well known for its many technological firsts and new products developed based on identifying and meeting specific customer needs. Credited with the fastest cheque clearing system in the country and known for prompt utilisation of advanced technology in its operations, Union Bank has sustained BB+ rating from Fitch Ratings.

“Our core strengths make us who we are – our base of shareholders among whom are some of the world’s best known investors, our financial stability and our range of innovative products fuels Union Bank’s unique promise to the investors,” said Amarasuriya.