Seylan Bank shareholders vote for Rs. 4.6 b Rights Issue

At an Extraordinary General Meeting held on Monday Seylan Bank announced its launch of a Rights Issue through which it proposes to raise Rs. 4,691,533,285.

All the proposed resolutions at the EGM were unanimously approved by the large number of shareholders present, thus endorsing their unwavering confidence in Seylan Bank’s future potential.

The Bank will offer 43,333,333 Ordinary Voting Shares to the registered holders of Ordinary Voting Shares in the ratio of one share for every three shares held in the Company at an issue price of Rs. 75/- per ordinary voting share.

It will parallely offer 41,186,666 Non Voting Shares to the registered holders of  Ordinary Non Voting Shares in the ratio of one share for every three shares held in the Company at an issue price of Rs. 35/- per ordinary (non-voting) share.

Seylan Bank Chairman Eastman Narangoda said: “The objectives of the Rights Issue are primarily to increase the Tier 1 Capital of the Bank to have a strong capital base, and for mobilization of long term funds in a bid to fund the proposed increase in the long term lending portfolio of the Bank, especially the housing sector and also to facilitate the future expansion programme of the Bank.”

The Bank’s long term lending will also cover large scale investment projects along with agricultural, small and medium scale projects. Under a proposed expansion programme, Seylan Bank will also increase its branch network island-wide while parallely upgrading and refurbishing existing branches. The Bank also looks forward to investing in advanced IT infrastructure to meet the demands of its expansion drive and to further add value to its customer service enhancement processes in order improve business efficiency as well and meet the envisaged future customer service requirements.

General Manager and CEO Kapila Ariyaratne said: “With our new initiatives focused on productivity improvements, we will henceforth be able to run at a more optimal level of performance and thereby enjoy a further improvement in profitability. We’re looking to further introduce a series of strategic measures.

These include an investment in advanced technology, organisational restructuring and employee job enrichment and engagement processes by benchmarking international best practices from within and outside the country. There would also be further investment on continuous staff training and development.”

Seylan Bank recently posted an impressive Rs. 256.3 Mn profit in the first quarter of 2011 recording a sharp 38% increase compared with the Rs. 185.9 Mn in the corresponding period of the previous year.

The Bank’s pre-tax profit was Rs. 395 Mn, up by nearly 36% from the Rs. 291.7 Mn in the corresponding period of the previous year.

The Bank also recorded a net profit of Rs. 1.2 Bn for 2010 which was a 126% increase compared to Rs. 543 Mn for 2009. Pre-tax profit, at Rs. 1.9 Bn, was up by an impressive 124% from 2009, the highest ever profit figure earned by the Bank since its inception.

Riding high on this all-time high performance, Seylan is geared to further establish the much-envied position it commands as one of Sri Lanka’s top ranking brands.

“We have made great progress and I have no doubt that this latest initiative will facilitate our further maintaining that momentum and propel Seylan Bank forward to even greater levels of success,” Chairman Narangoda added.