ECONOMYNEXT- Sri Lanka’s Pan Asia Banking Corporation Plc (PABC) said it plans to raise 750 million rupees through a debenture issue with an option to increase by 500 million rupees further in an event of oversubscription.
PABC said it will issue 7.5 million unlisted, unsecured, redeemable subordinated Basel III complaint debentures with a non-viability conversion feature.
The debentures will have a maximum tenure of five years and are subject to shareholder and regulatory approval.
PABC’s core capital to risk weighted assets ratio grew to 12.25 percent at end-September 2019 from 11.51 percent at end-December 2018, against a required minimum of 8.5 percent.
The total capital adequacy grew to 13.68 percent from 13.32 percent, against a regulatory minimum of 12.5 percent.
The bank’s loan book fell 1 percent in the September quarter from nine months earlier, while bad loans accelerated to 6.56 percent from 5.44 percent.
PABC posted a net profit of 270 million rupees, growing 4 percent in 2018 September quarter, compared to the previous year of the same period.
Interest income for the September quarter was flat from a year earlier at 4.8 billion rupees, while interest expenses fell 2 percent to 3.16 billion rupees, leading to net interest income accelerating to 1.69 billion rupees.
PABC had last issued 3 billion debentures in 2014 carrying interest rates between 9.52 and 9.75 percent, which matured in 2019.
Five-year treasury bonds are currently trading around 9.60/70 percent.
(Colombo/Jan17/2020 – Corrected. The bank is issuing Rs750mn in debt not Rs7.5bn)