April 05, 2008 (LBO) – The Merchant Bank of Sri Lanka (MBSL), a unit of state-run Bank of Ceylon , said it plans to get a banking license and expand its activities. . The bank will seek a licence from the regulator to operate as a ‘licensed specialised bank’, MBSL’s new chairman Janaka Ratnayake said in a note to shareholders accompanying the 2007 annual report.
Sri Lanka has a number of ‘merchant banks’ that were first set up by established commercial banks to engage in capital market activities and leasing.
The Merchant Bank also intends to take some of its corporate clients public in the third quarter of the year to raise about 3.5 billion rupees in funds, Ratnayake said.
The MBSL group reported net profit grew 17.6 percent to 264 million rupees in 2007 while group income grew by 24 percent to reach 1.44 billion rupees.
But the bank reported interest costs were rising faster than interest income.
The bank’s interest income grew 26.4 percent to 770 million rupees in the year while interest expenses rose 77.6 percent to 335.7 million.
The bank’s net interest income grew only 3.4 percent to 435 million rupees.
It also reported lo