Sep 19, 2017

Sampath Bank to raise over Rs.7b from a rights issue

Fitch Ratings, a credit ratings agency, has revised  Sampath Bank PLC's sector outlook to negative from stable, a statement said adding that it has assigned Sampath Banks proposed Basel III compliant subordinated debentures an expected National Long-Term Rating of 'A(lka)(EXP)'.

The bank plans to use the proceeds of debentures to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange. The final rating is subject to the receipt of final documentation conforming to information already received

 The bank expects to raise LKR7.6 billion in 4Q17 from a rights issue announced in July 2017. It expects the rights issue along with retained profits to boost the Tier I ratio to over 9% by end-2017 (8.5% at bank level at end-June 2017). In addition, the proposed Basel III Tier II debt would increase the total capital ratio to over 13% by end-2017 (12.2% at end-June 2017). The bank has to meet regulatory Tier 1 and total capital ratio ratios of 8.875% and 12.875% by end-2017. These requirements will be raised to 10% and 14% by end-2018, respectively.