Pan Asia Banking Corporation (PABC Bank) is to raise Rs. 1 billion from Japanese investors via a five-year debenture issue, its Deputy Chairman Nimal Perera told the Daily FT on the sidelines of the Sri Lanka Investment Forum in Tokyo on Thursday.
He said that the funds raised would be to boost Tier 2 capital and was in line with recent Central Bank regulations permitting commercial banks to borrow from overseas.
He said funds raised would be at attractive rate of interest but declined to reveal further information. The issue is facilitated by New World Securities and is still being firmed up.
Sans details, the broad plans to raise funds from Japan were disclosed during Perera’s presentation at the Investment Forum in Tokyo attended by nearly 100 Japanese companies and individuals.
PABC’s equity capital and reserves amounted to Rs. 3.4 billion as at 30 September 2011 up from Rs. 2.7 billion a year ago. This figure is inclusive of Rs. 1.54 billion as stated capital, Rs. 80 million as statutory reserves and Rs. 1.77 billion as other reserves.
PABC’s Core Capital (Tier 1 Capital) is Rs. 2.78 billion, whilst total capital base is Rs. 2.89 billion. Core capital adequacy ratio as a percentage of risk weighted assets was 11.46% as against the minimum requirement of 5% whilst total capital adequacy ratio as a percentage of risk weighted assets was 11.92% as against minimum requirement of 10%.
For the nine months ended on 30 September 2011, PABC’s operating profit from ordinary activities before tax topped the Rs. 1 billion mark, up by 48% over the corresponding period of last financial year. Operating profit after tax was Rs. 614.8 million, up by 120% from Rs. 280 million in the first nine months of 2010.