NDB to raise Rs.6.2bn via rights issue

National Development Bank PLC (NDB) yesterday conveyed its plans to the Colombo bourse to raise Rs.6.2 billion via a rights issue.

Accordingly, the bank plans to issue 59.1 million new shares in the proportion of one new ordinary voting share for every three ordinary voting shares held at a price of Rs.105 per share.

NDB share yesterday closed at Rs.132.70. As at March 31, 2018, the book value stood at Rs.189.32.

NDB’s current stated capital stands at Rs.3.01 billion, represented by 177.5 million shares.

The bank said the rights issue proceeds would be utilized to further strengthen its equity base and thereby its capital adequacy and, to part finance the growth in the loan portfolio. As at March 31, 2018 NDB’s BASEL III compliant tier I capital ratio stood at 8.73 percent whereas the regulatory minimum is 7.875 percent. 

The tier II ratio stood at 13.35 percent against the regulatory minimum of 11.875 percent. 

Regulatory minimums of both ratios go up to 8.5 percent and 12.5 percent by January 1, 2019 when the BASEL III comes into full effect. 

The government holds over 30 percent stake in NDB through various State-controlled entities. 

As at March 31, the controversial Perpetual group held a 6.52 percent stake in the NDB.

Sri Lanka’s large banks have raised Rs.42 billion in equity and Rs.11 billion in debt to stay compliant with the BASEL III thresholds that are in effect from January 1, 2018.