Capital Boost

Sept 20, 2007 (LBO) –Sri Lanka’s Seylan Bank said it was going ahead with a plan to raise new debt to beef up its capital base and meet Central Bank requirements. A bank statement said it plans to make a public quoted issue of unsecured subordinated redeemable five-year debentures the details of which are to be made known later.

Unsecured debentures can be used as tier II capital of a bank.

Fitch Rating has rated the bank A- (lka). Its subordinated debt has previously been rated a notch below at BBB + (lka) also in the investment grade.

Seylan Bank’s June quarter profits surged 78 percent with revenues going up by 21 percent despite flat loan growth, according to interim results filed with the Colombo Stock Exchange.

Group net profit after tax grew to 458.6 million rupees in the three months ended June 2007 from 257.7 million while revenues grew to 3,745 million rupees from 3,091 million.

Net interest income went up 9 percent to 1,718 million while other income improved sharply by 56 percent to 861 million rupees.