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In a fresh boost to financial markets and reflecting growing foreign investor appetite, Japan’s Bansei Securities Ltd. yesterday acquired a 15% stake in Pan Asia Bank for Rs. 930 million.
The stake amounting to 44.256 million shares was done at Rs. 21 each. Overall the bank saw 45.18 million of its shares traded hitting an intra-day high of Rs. 21.90 before closing Rs. 1.20 to Rs. 20.30. Pan Asia Bank’s net asset value is Rs. 14, up by 15% over 2011.
Bansei is a trading member of the Tokyo Stock Exchange and has had a working relationship with NWS Holdings Ltd., which structured the deal.
Sellers included a foreign fund holding 27.68 million shares or 9.38% and Royal Ceramics Plc (six million shares or 2%) as well as Pan Asia Bank Chairman Nimal Perera who divested his personal holding of five million shares as per the disclosure to the CSE.
Business leader Dhammika Perera controls Pan Asia Bank with a 29% stake.
NWH Holdings subsidiary New World Securities along with Acuity Stockbrokers figured on the buying and selling side of the transaction.
A spokesman for NWS Holdings said the investment as well as entry into Sri Lanka by Bansei augured well for the financial services industry. Given the fact that Japanese investors control NWS Holdings, the latter has been actively promoting investments into Sri Lanka from Japan.
Taking a cue from a suggestion of President and Finance Minister Mahinda Rajapaksa for stockbrokers to venture overseas and promote investments, New World Securities conducted two road shows in Tokyo in 2011 and 2012, whilst NWS Holdings has been attracting Japanese investments into the Sri Lankan bond market as well.
NWS Chairman Takashi Igarashi also serves as a Director on the Pan Asia Bank Board.
With the purchase of a strategic 15% stake, Bansei becomes one of the few foreign firms with an exposure to a commercial bank whilst Pan Asia Bank also becomes one of the select few to have a strategic foreign shareholder. The public float of Pan Asia Bank is 57%.
PABC’s total assets in 2012 rose by 19% to Rs. 56 billion whilst liabilities saw an equal percentage growth to Rs. 52 billion of which deposits were worth Rs. 46.6 billion, up by 31% over 2011.
Net loans and advances rose by 24% to Rs. 42 billion.
Pan Asia Bank’s profit for 2012 was Rs. 860 million, up by 6% whilst pre-tax profit was Rs. 1.14 billion, down by 0.7%. Operating profit before VAT and taxes was Rs. 1.35 billion, same as in 2011.
Gross income rose by 47% to Rs. 7.76 billion, interest income rose by 52$ to Rs. 6.77 billion whilst net interest income improved by 10% to Rs. 2.4 billion. Equity capital and reserve amounted to Rs. 4.2 billion, up by 15%. In terms of capital adequacy, Pan Asia Bank’s Tier 1 was 13.34%, down by 4% over 2011 whilst the minimum requirement is 5% and Tier 1 and 2 was 15.75% up by 10% over 2011 whilst the minimum requirement is 10%.
Visioning itself to become the most customer preferred commercial bank in Sri Lanka, Pan Asia Bank has been in operation for 18 years with a comprehensive portfolio of corporate, retail and SME banking products and services. It also styles itself as one of the fastest growing banks in the industry. Last year it opened nine branches, bringing the total to 73.
Pan Asia Bank Director and CEO T.C.A. Peiris has said in the 2012 Annual Report that although the bank recorded a modest growth in 2012 despite the challenging market conditions prevalent, its commitment to enhance shareholder wealth remained strong.
“Pan Asia Bank, while continuing on its aggressive branch network expansion, earned a healthy 22.8% return on investment for shareholders in a challenging macroeconomic context,” he added.
The bank’s Board comprises Nimal Perera (Chairman), Eshana De Silva (Deputy Chairman), Anthony Page (Senior Director), Sunil Adhihetty, M.D.S. Goonatilleke, H.K. Seneviratne, Tharana Thoradeniya, Channa De Silva, G.A.R.D. Prasanna, T. Igarashi and T.C.A. Peiris (Director/CEO).
