UB Finance IPO to open on July 20

UB Finance Company Limited (UBF), a subsidiary of Union Bank of Colombo PLC would be the latest addition to the Colombo Stock Exchange (CSE) as it plans to carry out an Initial Public Offering (IPO) of 55 million ordinary voting shares at Rs.1.00 per share. 
IPO is scheduled to open on 20th July 2023, and is a prime opportunity to invest in a Licensed Finance Company (LFC) backed by a licensed commercial bank. 

The company is set to debut on the Diri Savi Board of the CSE subject to compliance with the CSE Listing rules and will be one of the first IPOs post announcing of the local debt restructuring framework.  The issue will be managed by NDB Investment Bank Limited (NDBIB). The company embarked on the listing process in compliance with the Central Bank requirement for all LFCs to be listed on the CSE.

In 2021, UBF successfully raised Rs.1.99 billion via a rights issue to strengthen the company’s balance sheet and meet the revised capital thresholds set out by the Central Bank.
The company has a high capitalisation ratio with an unimpaired core capital of Rs.2.54 billion and a Tier 1 Capital Adequacy Ratio and Total Capital Adequacy Ratio of 31.07 percent and 31.07 percent respectively as at 31st March 2023 comfortably exceeding the Central Bank thresholds.

The company has established itself as a leading LFC in the financial services space since its acquisition in 2011 by Union Bank of Colombo PLC together with its strategic investment partner ShoreCap II Limited (a US-based social impact fund). 
UBF specializes in asset-backed financing for SMEs, successfully catering to its customers’ diverse needs with an extensive range of financial products and services, including fixed deposits, savings, leasing, loans, mortgages, easy drafts, real estate, gold loan solutions etc. 

The company’s contribution towards serving the non-banked space of the economy is notably influenced by the social impact mindset of UBF’s second largest shareholder, ShoreCap II Limited. 
Fitch Ratings recently assigned UBF a first time National Long-Term Rating of ‘BB (lka)’ (RWN).