Sri Lanka’s Union Bank gets Malaysian, US capital, plans IPO

May 01, 2010 (LBO) – Union Bank (UB), has inked a deal to raise 1.5 billion rupees in capital from Genting Group, a Malaysian conglomerate and Shorecap, a US based banking fund and is hoping to go public within an year, an official said. "Genting is giving 1.0 billion (rupees), Shorecap 500 million rupees," Union Bank chairman Ajita de Soyza said.

"The balance 500mn, some are foreign and some are local. In a couple of months we will be planning an IPO (initial public offering) as well."

Under a private placement Genting would get a 20 percent stake in the bank and Shorecap would get 13 percent, Soyza said.

The bank is planning to go public within a year to comply with a central bank directive that all banks, finance, leasing and insurance companies have to be publically quoted at the Colombo Stock Exchange (CSE) to be more transparent.

But Sri Lanka's three largest banks, state-run Bank of Ceylon (BOC), Peoples Bank and National Savings Bank are not listed.

"We hope to list at the end of this year or early next year," Amarasuriya said.

In 2006 the Central Bank had increased a minimum capital requirement for licensed commercial banks from 0.5 billion to 2.5 billion, to be met by end 2009.

UB was sh