Pan Asia Banking Corporation PLC this week announced successful completion of its rights issue to raise up to Rs.2.06 billion placing the bank on a much stronger footing to pursue a higher wave of growth in 2017 and beyond.
The Bank in December 2016 announced to issue 147.5 million shares at one new share for every two shares held at an issue price of Rs.14/- to fund its future growth while maintaining a strong capital base.
The Bank’s share issue carried further significance given the fact that this was the first rights issue in the Colombo Stock Exchange for 2017 which would certainly have led to enhanced investor sentiments about the capital market in Sri Lanka.
Speaking on the share issue, the bank’s Acting Chief Executive Officer, Lalith Jayakody attributed the success to the strong investor confidence placed on the bank’s current and future strategies by its shareholders. “When we announced this rights issue we had the full confidence in our shareholders that they would be behind us. They knew that we have chosen a growth path which is both steadfast and sustainable. So, I believe this was the reason behind our successfully raising over two billion rupees and close the issue on a high note,” Jayakody said.
Pan Asia Bank is the fastest growing commercial bank in Sri Lanka with its assets growing by over 20 percent to be slightly below Rs.130 billion as of end of 2016.
The bank also increased its profit after tax by 20 percent to Rs.1.25 billion, recording the highest ever after tax profit earned by the bank in its 21 years history.
This is also not the first instance where the bank saw increased investor appeal for its call for capital. Whenever the bank has made a capital call, both its existing and new investors have responded overwhelmingly to become part of the bank’s growth story. This was amply demonstrated by the two back to back debenture issues made by the bank in 2014 and 2015 where the bank raised Rs.3.0 billion and Rs.4.0 billion respectively on their first days of the openings as these issues were oversubscribed by multiple times since few hours of their openings.
The rights issue also places Pan Asia Bank well above the minimum core capital requirement of Rs.7.5 billion which needs to be met by March 31, 2017 as the bank now has a core capital base of Rs.8.67 billion.
During 2016 the Tier I Capital Adequacy Ratio (CAR) improved to 8.37% from 7.82% a year ago due to the strong internal capital generation during the period under review.