SDBL meets regulatory Minimum Capital Requirement

SANASA Development Bank Ltd (SDBL) achieved its regulatory Minimum Capital Requirement of Rs: 1,500 million as at October 31, 2009, said SDBL’s General Manager/CEO, Nimal Mamaduwa.

Nimal Mamaduwa

In April 2005, the Central Bank of Sri Lanka imposed a Regulatory Minimum Capital Requirement to all Licensed Specialized Bank to increase their capital Rs. 1,500 million by the end of 2007, which was subsequently extended to December 2009. The Bank’s main Shareholders comprised SANASA Primary Societies all over the island and over 8,500 Primary Societies collectively owned approximately 75 percent of SDBL.

These Primary Societies are in turn owned by their members mainly comprising individuals from the low income stratum of the economy. SDBL has successfully secured Capital injection from several local institutions and Global Micro financing bodies in the recent years, supported by a transfer of loan funds to capital by the Canadian International Development Agency, through Canadian Corporative Associations with whom the SANASA Movement has been having a close relationship during the Past 30 years.

This, together with continuous Capital Infusion by the SANASA Primary Societies having placed confidence over the years, the Bank had been able to meet its Minimum Capital Requirement, he said.

Mamaduwa said the Bank’s Tier 1 Capital and Overall RWCARs stands at 11.42 percent and 11.86 percent as against the regulatory requirement of 5 percent and 10 percent as at September 30, 2009.

SDBL’s financial performance as at the third quarter ending September 30, 2009 remained healthy. SDBL’s performance has been driven by the robust expansion of its loan book and higher yields on its portfolio. Its net interest margin widened to 7.81 percent as at end December 2008, broadening further to 8.39 percent as at end of September 2009.

SDBL’s deposit base recorded strong growth of 22 percent during the first nine months of the year increasing the deposit base from 8.2 billion to 10.1 billion, driven by the rapid expansion of the Bank’s network with 50 branches.

SDBL’s gross Loan Book has also consistently augmented faster than the industry. The Bank’s Loan Portfolio has shown an increase of 14 percent during the first nine months increasing from Rs. 8.7 billion to Rs. 9.9 billion.