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| Thursday, 20 May 2004 |
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Sampath Bank goes for five-year debenture issue Sampath Bank will launch a five-year debenture issue of one billion rupees with an option to increase it by a further Rs. 500 million if the issue is oversubscribed. The debentures have been rated A (Sri) by Fitch Rating (Lanka) Limited and will be listed on the main board of the Colombo Stock Exchange and therefore easily tradable in the secondary market. The issue will be launched on Thursday, May 27. Managing Director/Chief Executive Officer, Sampath Bank Anil Amarasuriya, told a media briefing at the Galle Face Hotel on Tuesday that the debenture is a an attractive investment offer for investors who will have the added benefit of a choice of three options available to receive interest. The Fixed interest rate of 10% p.a. is payable annually or fixed interest rate of 9.75% p.a.) payable bi-annually (annual effective rate of 9.99% p.a.) or floating interest rate of 2% p.a. above the three months Treasury Bill rate (net of withholding tax) payable quarterly. A total of 10,000,000 unsecured, subordinated redeemable debentures (2004/2009) of Rs. 100 will be on offer with an option to issue a further 5,000,000 if the issue is over-subscribed. The closing date is the date the issue is oversubscribed or June 16, 2004. The minimum subscription is 100 debentures - Rs. 10,000 and any excess shall be in multiples of Rs. 5,000. The redemption date is five years from the date of allotment. Deutsche Bank, Colombo will act as the trustees for the issue. Amarasuriya said that the purpose of the issue is to expand the capital base of the bank in order to fund the bank's expansion and to mobilise medium term funds to match the medium to long term lending of the bank. It will provide the members of the public an opportunity to invest in fixed income securities with a higher return and help to develop a secondary market in Sri Lanka for listed debt instruments. Investors will benefit from this issue due to the choice of regular income (annually, bi-annually or quarterly), no capital loss if held to maturity and investors who wish to liquidate their investment prior to maturity can do so through the Colombo Stock Exchange with the possibility of even capital gains. The debentures can also be used as security to obtain credit facilities from financial institutions other than Sampath Bank. Sampath Bank, which commenced business in 1987 has a network of 64 branches all online real time. They introduced networked ATMs to Sri Lanka with the 'SET' and they now have 84 ATMs islandwide which are also linked to the Cirrus and Visa Plus international networks thereby providing global access. Another concept pioneered by Sampath is the easy Banking Centres with a number of electronic banking facilities which are open 24 hours a day seven days a week to provide maximum customer convenience. "Our bank has won a number of awards locally and internationally. At the last annual report award Sampath Bank won three awards, Runner-up in the banking institutions category, joint Second Runner-up-overall and Second Runner-up in the Good Corporate Disclosure category. Sampath Bank is the acknowledged leaders in IT in Sri Lanka's financial services industry and we have achieved many firsts not only in Sri Lanka but also in the region. We offer our customers a comprehensive range of innovative electronic banking products and services and a wide range of credit and debit card products, We are the only bank in Sri Lanka to offer the exclusive VISA Platinum cards", Amarasuriya said. He said that the 1,600 employees branded the Sampath team is the main thrust and driving force of the bank. The Bank has an authorised capital of Rs. 1,450,000,000 in ordinary shares of Rs. 10 each and Rs. 50,000,000 in preference shares of Rs. 10 each. The issued and paid-up capital is Rs. 442,849,040 in ordinary shares. The bank already has an unsecured subordinated debentures quoted on the Colombo Stock Exchange of Rs. 1,000 each issued in 1999 redeemable on July 21, 2004 for Rs. 500,000,000 and a long term bond issued on August 2004 maturity August 1, 2003 for Rs. 627,500,000. As at December 31, 2003 the bank's capital adequacy rates for Tier I and for Tier 1 + II was 9.6% and 11.0%. The debenture issue will help to improve this ratio further. Sampath Bank in the year 2003 recorded a further improvement over their performance during the year 2002. As at December 31, 2003 the profit after tax grew by 27.2% to Rs. 561 million the total deposits by 24.4% to Rs. 42,031 million, the total advances by 18.7% to Rs. 37,662 million and the total assets by 25.7% to Rs. 54,054 million. The shareholders' funds stood at Rs. 3,382.93 million and the return on shareholders' funds increased to 17.9%. The bank has a return on Assets ratio of 1.2%, Return on Equity of 17.9%, and a cost to income ratio of 60.8%. The Bank's non performing advances as at December 31, 2003 net of interest in suspense has decreased to 10.8%. The bank has Sampath Surakum Ltd., Sampath Centre (Pvt) Ltd., and SC Securities (Pvt) Ltd., as subsidiaries with shareholdings of 100%, 65.2% and 51% and an associate company in Vanik Bangladesh Ltd. with a shareholding of 20%. |
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