NTB proposes Rs. 13.87 b Rights Issue to nearly double stated capital

Wednesday, 9 September 2026 00:23 - - {{hitsCtrl.values.hits}}

Nations Trust Bank PLC yesterday said it proposes to float a Rs. 13.87 billion Rights Issue that, if fully subscribed, will nearly double its stated capital to Rs. 27.86 billion from Rs. 13.99 billion, while strengthening its Common Equity Tier 1 capital position to support growth and provide greater buffers against heightened risks.

The bank’s Board of Directors, at a meeting held on 7 September, resolved to issue up to 45.47 million Ordinary Non-Voting Convertible Shares to existing Ordinary Voting and Ordinary Non-Voting Convertible shareholders.

The shares will be issued at Rs. 305 each in the proportion of three new Ordinary Non-Voting Convertible Shares for every 22 Ordinary Voting and/or Ordinary Non-Voting Convertible Shares held on the relevant record date.

Nations Trust Bank’s current stated capital stands at Rs. 13.99 billion, represented by 288.49 million Ordinary Voting Shares and 44.94 million Ordinary Non-Voting Convertible Shares. Following the Rights Issue, if fully subscribed, the number of Ordinary Non-Voting Convertible Shares will increase to 90.40 million, while the number of Ordinary Voting Shares will remain unchanged at 288.49 million.

The proposed issue would increase stated capital by Rs. 13.87 billion to Rs. 27.86 billion, equivalent to an increase of about 99%, effectively nearly doubling the bank’s stated capital.

The bank said the purpose of the issue is to strengthen its Common Equity Tier 1 capital position, enabling sustainable growth and greater scale while maintaining adequate buffers to absorb heightened risks.

Shareholder funds stood at Rs.103.93 billion as at 30 June 2026 and would increase to about Rs. 117.80 billion following completion of the Rights Issue, if fully subscribed.

The Rights Issue is subject to in-principle approval from the Colombo Stock Exchange for the issue and listing of the new shares, as well as shareholder approval by way of a Special Resolution at a General Meeting.

The proposed Rights Issue gives NTB a relatively straightforward way to strengthen its Common Equity Tier 1 capital and almost double stated capital without taking on additional debt, providing greater capacity to support balance-sheet growth following its Rs. 18 billion acquisition of HSBC Sri Lanka’s retail banking business last year.

NTB absorbed Rs. 36.6 billion in assets and Rs. 142.8 billion in liabilities following the acquisition, compared with pre-acquisition loans and advances of Rs. 430.4 billion and deposits of Rs. 502.2 billion.

The bank posted retained earnings of Rs. 84.5 billion at end-June 2026, up 21% from December 2025.

John Keells Holdings was the largest voting shareholder with 19.72%, followed by HWIC Asia Fund with 15%, Central Finance Company PLC with 9.84% and Mackinnons Keells Ltd., with 9.76%, while the public float was 35.79%. Following yesterday’s announcement, NTB voting shares traded unchanged at Rs. 312.75, while the non-voting shares fell Rs. 12.25 to Rs. 385.