The Commercial Bank of Ceylon PLC has announced plans to raise Rs 5 billion, with an option to raise upto a further Rs. 5 billion in the event of an over subscription, for its capital through a Basel III compliant debenture issue that opens on Monday, 16th July 2018, offering qualified investors an opportunity to invest in the growth of Sri Lanka’s benchmark private bank.
Applications for the debentures are accepted from now on. The Bank said it will make an initial issue of 50 million Basel III compliant – Tier 2, Listed, Rated, Unsecured, Subordinated, Redeemable Debentures with a Non-Viability Conversion, with an option to issue up to a further 50 million Debentures, in the event of an over subscription of the initial issue. The par value of the debenture will be Rs 100.
The funds raised through this issue would strengthen the Bank’s lending portfolio, improve the Tier 2 capital base and reduce maturity gaps in the assets and liabilities of the Bank.
The debentures are rated AA- (lka) by Fitch Ratings Lanka Limited. Commercial Bank’s National Long-Term Rating has been affirmed at AA (lka)/Stable by Fitch Ratings Lanka Limited. The Investment Banking Division of Commercial Bank of Ceylon PLC is the Manager to the Issue.
The Debenture Issue is open to Qualified Investors only, as defined in the Prospectus. Investment and secondary market trading is limited to qualified investors. The minimum subscription per application is Rs. 10,000/- (100 Debentures) other than in the case of individual Qualified Investors. The minimum subscription requirement for an individual Qualified Investor applying for Basel III compliant Debt Securities shall be Rs. 5 million. Applications in excess of the minimum subscription shall be in multiples of Rs. 10,000/- (100 Debentures).
The debentures will be offered in two tenures – Type A with a five year tenure and Type B with a 10 year tenure, the Bank said.
The five-year debentures will carry a fixed interest rate of 12.00% p.a. (AER 12.36%) payable semi-annually, while the ten-year debenture will offer a fixed interest rate of 12.50% p.a. (AER 12.89%), also payable semi-annually.
More details of the debenture issue can be obtained from the prospectus on the Bank’s website www.combank.lk and the Colombo Stock Exchange’s website www.cse.lk and are available at all Commercial Bank Branches and Members and Trading Members of the CSE.
For the Financial year 2017, Commercial Bank reported total assets of Rs 1.143 trillion, gross income of Rs 115.6 billion, net profit of Rs 16.5 billion, a deposits base of Rs 850.1 billion and total loans & receivables of Rs 754.7 billion. In terms of Capital Adequacy Ratios, the Bank’s Total Tier 1 capital ratio (with capital buffers) at 12.11% as at 31st December 2017 was well above the 7.75% required under Basel III. The Total Capital Ratio of 15.75% at the end of 2017 was comfortably above the Basel III requirement of 11.75%.
The only Sri Lankan bank to be ranked among the world’s top 1000 banks for eight years consecutively, (The Banker Top 1000 Banks in the World Ranking), the Commercial Bank of Ceylon plays a pivotal role in the economy of the country, especially in terms of empowering small and medium industries. In the past year it paid Rs. 11.5 billion in taxes to the government and lent Rs.131.8 billion to SMEs. The Bank also channelled 10.56% of the country’s imports and 18.58% of its exports in 2017, and was the Sri Lankan bank with the largest footprint in Asia.
Commercial Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets, Myanmar, where it has a Representative Office in Yangon, the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake and Italy, where the Bank operates its own money transfer service.