Sri Lankan banks announce major capital raising initiatives

Two major Sri Lankan financial institutions have announced significant capital raising plans to strengthen their balance sheets.

Bank of Ceylon (BOC) is launching Sri Lanka’s largest-ever listed debenture issue, with a maximum size of LKR 30 billion. The bank intends to initially raise LKR 10 billion, with options to increase the total amount if oversubscribed. The Basel III compliant, Tier 2 debentures will feature five-year and seven-year maturities, offering both fixed and floating coupon rates. The issue carries an AA (Stable) rating from Lanka Rating Agency.

Separately, Nations Trust Bank PLC (NTB) plans to raise LKR 13.87 billion through a rights issue to bolster its Tier 1 capital. The bank will offer ordinary non-voting convertible shares to eligible shareholders. If fully subscribed, NTB expects its Tier 1 capital ratio to increase from 12.63 percent to 14.98 percent. The proceeds are intended to support lending activities, including term loans and working-capital facilities, following the bank's recent acquisition of HSBC’s retail banking portfolio.