Commercial Bank of Ceylon PLC (ComBank) yesterday announced the oversubscription of its Rs.10.1 billion rights issue, which was aimed at beefing up the bank’s capital base and aiding future growth.
ComBank is Sri Lanka’s largest private sector lender with a total asset base of Rs.1.05 trillion as at March 31, 2017.
The bank issued 84.5 million ordinary voting shares in the ratio of one new share for every 10 shares held at an issue price of Rs.113.60 a share to raise Rs.9.6 billion.
The bank further issued 5.8 million ordinary non-voting shares in the ratio of one new share for every 10 held at Rs.90.8 a share. Through non-voting shares the bank raised Rs.527.7 million.
The number of rights shares under both categories will be calculated after adjusting for the number of shares to be issued as scrip dividend amounting to Rs.2.0 a share.
As of March 31, 2016, the bank had a core-capital base of Rs.75.5 billion and a total capital base of Rs.1036 billion.
The Tier I capital adequacy ratio stood at 11.08 percent while the Tier II at 15.21 percent, comfortably higher than the required regulatory minimums. While the BASEL III demands higher capital adequacy and some additional capital buffers on top of it, ComBank stays even well above those requirements. The BASEL III transitional phase begins from July 1, 2017, with interim capital adequacy requirements till the banks meet the final ratios, which are substantially higher than the existing 5.0 percent and 10 percent.