National Development Bank PLC (NDB) yesterday said it was pursuing the debenture issue announced this February.
The bank has upsized the issue by Rs.2.5 billion to Rs.10 billion, subject to regulatory approvals.
Accordingly, NDB will issue listed, rated, unsecured, subordinated, redeemable debentures amounting to Rs.7.5 billion with an option to raise up to Rs.10 billion.
According to NDB Bank Managing Director/CEO Rajendra Theagarajah, the funds are raised to expand the bank’s asset base.
NDB expanded its loan book by 28 percent in 2014 to Rs.175.2 billion when the industry private credit was lagging behind at 7.5 percent.
“We want to continue with this kind of growth. We can’t do that with three to six months’ deposits,” Theagarajah remarked.
However, in the first quarter of FY15, NDB’s loan book growth remained flat.
NDB raised Rs.10 billion through a debenture issue in December 2013.
Meanwhile, speculation is rife in the market about a possible acquisition of a significant stake in another commercial bank by NDB.
NDB acquired an 8.5 percent stake of Seylan Bank PLC in a Rs.1.6 billion deal this March.
“It’s not a strategic investment but as time goes on, it could turn out to be,” Theagarajah said.