Sampath Bank successfully raises Rs. 7 b through Basel III compliant Debenture

Friday, 22 February 2019 00:00 - - {{hitsCtrl.values.hits}}

Sampath Bank yesterday announced that its third BASEL III compliant Debenture issue, to raise Rs. 7 billion, had been oversubscribed within a few hours of its opening on 20 February.

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.

The Bank’s Capital Management Process was revamped as part of its ongoing efforts to comply with the new Basel III guidelines. This comes in light of the Central Bank of Sri Lanka’s (CBSL’s) decision to introduce the Basel III Capital Standards to Sri Lanka in three stages commencing from 1st July 2017 and ending on 1 January 2019.

Sampath Bank has remained proactive in its efforts to increase capital levels since 2017, successfully raising Rs. 20 billion worth of Tier 1 capital and Rs. 13.5 billion worth of Tier 2 capital during the latter part of 2017 and in 2018. With this, the Bank has been able to maintain its Tier I and Total Capital Adequacy ratios at 12.08% and 15.73%, respectively, as at 31 December 2018. The strong Total Capital Adequacy ratio is an indication that Sampath Bank has more than adequate capital buffers to absorb potential losses and safeguard depositors’ funds.

“The oversubscription of the current Debenture issue within hours of its opening is a reflection of the market’s confidence in Sampath Bank’s strong fundamentals. Our Total Capital Adequacy ratio stands above the 14% minimum rate stipulated for the 6 Domestic Systemically Important Banks (DSIB) in Sri Lanka by the Central Bank of Sri Lanka, effective from 1 January 2019,” said Sampath Bank Managing Director Nanda Fernando.