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NDB summons EGM to get shareholders approval to raise Rs. 11 bn. zero cost equity

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The National Development Bank PLC (NDB) has summoned a virtual extraordinary General Meeting on April 9 to get shareholder approval for a rights issued and a private placement of shares to the Norwegian Development Fund for Developing Countries fully owned by the Government of Norway to raise over Rs. 11.1 billion zero cost equity capital for the bank.

Existing shareholders of NDB will get their rights shares at Rs. 75 per share while the Norwegian fund will pay Rs. 82.50 – both less than half the bank’s net asset value per share of Rs. 192.49.

The rights issue/private placement will see the bank issuing approx. 106.78 million new shares by way of rights and up to approx. 37.67 million shares through the private placement in the proportion of 28 new shares for every 61 already held (rights) at Rs. 75 a share. Unsubscribed shares will be aggregated and allotted to shareholders seeking additional shares at the same 75-rupee price on what the bank’s directors regard to be a “reasonable basis” depending on availability and subject to shareholding restrictions placed by the Banking Act.

Shares remaining unsubscribed will be initially allotted to Norfund up to 9.99% of bank’s equity and thereafter, if available, to others including legal entities seeking unsubscribed shares, NDB said last week in a circular to shareholders. This will be subject to Banking Act restrictions.

It said that the maximum number of shares Norfund can subscribe for will not trigger the SEC’s mandatory offer requirement under its Takeovers and Mergers Code. This requires any person/entity acquiring up to 30% of any listed company to offer other shareholders the highest price paid for the share in the preceding 12-month period.

Norfund which currently hold a stake in Soflogic Life Insurance as its only investment here

is looking for further potential investments in Sri Lanka, NDB said. This fund which has committed investments worth over 2.88 million USD up to the end of 2019 prioritizes investments in clean energy, financial institutions, green infrastructure and scalable enterprises aligned with UN sustainable development goals, has invested in 163 projects in 29 core strategy countries in Asia, Africa and Latin America.

If it succeeds in achieving its objective of investing in a 9.99% stake in NDB, it will be the second largest shareholder in the bank behind the EPF which holds 10%. Other big shareholders include the Bank of Ceylon (8.36%) Sri Lanka Insurance Corporation (SLIC) general fund (6.39%), SLIC life fund (4.37%) and Dr. Sena Yaddehige (4.37%).

Softlogic Insurance, ETF and Perpetual Treasuries, Richard Pieris, HNB and Phoenix ventures are the other biggest private shareholders while individually, Messers. Ashok Pathirage and Merril J. Fernando are also in the Top 20 list of shareholders of NDB.

In the event Norfund is unable to to secure any shares under the rights issue, a maximum of 37.67 million ordinary shares will be allotted to it at the Rs. 82.50 price raising over Rs. 3.1 billion zero cost equity for NDB.

“The private placement will only take place in the event Norfund is unable to get the 9.99% stake under the rights issue,” NDB said.

The funds raised will be used to further strengthen NDB’s equity base and improve its capital adequacy ratios in line with Central Bank guidelines, NDB said

Two years ago an NDB rights issue (at a much higher price than this) was heavily under-subscribed in the context of the bank’s share trading in the secondary market at prices substantially below the rights price. Given the structuring of the present offer, analysts do not expect an under-subscription of this issue.

The NDB share closed on Thursday at Rs. 80, trading between Rs. 79-80 for a small quantity of 28,343 shares transacted in 66 trades. Friday’s close was also Rs. 80 with 30,060 shares transacted between Rs. 79.20 – 80 in 47 trades.

The rights may be traded on the CSE and brokers expect them to command a price.

 

 



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OPPO releases new OPPO A54 in Sri Lanka

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OPPO, the leading global smart device brand, announces the launch of OPPO A54 in Sri Lanka.

A54’s attention to design and great usability is evident in both its exquisite appearance and how it helps to capture great looking shots. This starts with the Material of the Rear Cover, which uses metallic material for its 3D panel, but contributes to a stronger and less bendable structure but also a comfortable in-hand feel. As a result, A54 weighs about 192g and is 8.4mm thin. To align the overall look and feel of the phone, close attention is paid to the Middle Frame Process.

“A Series is designed to enhance or complement our users’ lifestyles and OPPO A54 achieves just this with a phone that manages to balance a high-end performance with contemporary design. Its large 5000mAh battery and 18W Fast Charge makes sure you’re fully powered to get you through your day. With A54, you’ll also have enough storage and memory to make sure that you’ll enjoy your entertainment without the frustrations of an underperforming smartphone,” said Bob Li, CEO, XINDA Lanka (OPPO Sri Lanka).

The Rear Cameras itself feature a 13MP Main Camera, 2MP Macro Camera for close range shots, and 2MP Bokehfor brilliant bokeh shots that blur the background and highlight the subject of the photo. A54 enhances shots in all environments with Dazzle Color, balancing the saturation and brightness. A54 also supports filming videos including SLO-MO at 720P at 90FPS with the rear camera, and up to 10 video Filters including Original, Gentle, Noon, Subtle and more.

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Pan Asia Bank records best-ever Q1 results in challenging times – Profit After Tax soars by 81% to post Rs. 750 mn.

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Pan Asia Banking Corporation PLC reported the best-ever first quarter financial results during the quarter ended 31st March 2021 to report a Pre-Tax Profit of Rs. 986 Mn and a Post-Tax Profit of Rs. 750 Mn after recording impressive growth rates of 51% and 81% respectively, demonstrating the resilience amidst challenging macro economic conditions. The Bank’s performance was characterised by strength and resilience, despite the heightened uncertainty due to the impact of the COVID-19 pandemic.

Against the backdrop of the COVID-19 impact on the Sri Lankan economy, the Bank’s Operating Profits before VAT on Financial Services reached Rs. 1,197 Mn with an increase of 47%, reflecting excellence in core banking performance and the success of cost containment measures evidenced by improvement in all key matrices which now rank among the industry bests. This feat was achieved even after setting aside provisions for probable loan losses amounting to Rs. 638 Mn. The Bank increased the provision buffers for probable deterioration in credit quality through management overlays, experience adjustments and adjustments for the exposures in the elevated risk industries during the quarter. As a result, total impairment charges for the quarter increased by 21% on YoY basis.

The Bank’s Net Interest Income for the period witnessed an increase of 17% due to significant reduction in financial cost of funds at a rate faster than the drop in interest yields of interest bearing assets. Consequently, the Bank’s Net Interest Margin for the quarter improved to 5.07% from 4.41% reported three months ago. In the meantime, the Bank’s Net Fee and Commission Income recorded a growth of 28% with the rebound in demand for credit due to revival of economic activity amidst the low interest rate regime. The volatility in foreign exchange rates enabled the Bank to increase its Foreign Exchange Income substantially as reflected in Other Operating Income.

The Bank is committed to revenue maximisation and cost management despite sector vulnerabilities that prevailed since last year. The Bank’s Cost-to-Income Ratio improved from 45.66% to 38.08% within a three months period owing to the excellence in core banking performance which is reflected in the noteworthy overall growth in key revenue lines and various strategies and measures taken to contain overhead costs. In fact, the Bank managed to bring down its Other Operating Expenses by 9% in 2021 Q1 compared to 2020 Q1. Meanwhile, increased allocations for performance bonuses, development of human capital and staff welfare led to an increase in personnel costs during the reporting period compared to 2020 Q1.

The Bank’s Post-Tax Profits for the reporting quarter also gained to an extent due to application of lower corporate income tax rate of 24% for tax provisioning in accordance with the guideline issued by CA Sri Lanka on 23rd April 2021.

The Bank continues to report solid Key Profitability Indicators which rank among the highest in the industry. The Bank’s Pre-Tax Return on Assets also improved to 2.24% from 1.70%. Further, the Bank reported a stunning Return on Equity (ROE) of 19.27% during the quarter under review which stands among the industry best. The ROE is the most important performance indicator to gauge the attractiveness of the Banking sector and Pan Asia Bank during its last few years has consistently remained an outlier in the industry.

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SLIIT nurtures school children at ‘Soft Skills + 2021’

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The SLIIT Business School (SBS) organised ‘Soft Skills+ 2021’ concluded on an extremely successful note recently helping students engage, cooperate and thrive in building their talents towards personal development and career progression.

SLIIT Soft Skills+ event is an annual flagship CSR Project of the SLIIT Business School organized with the primary objective of developing secondary school students’ soft skills in positive thinking, creativity, analytical thinking, leadership skills, problem-solving skills, communication skills, and teamwork.

Over the years, the programme has garnered much popularity among schools and participants. Due to its tremendous success achieved in previous programmes, Soft Skills+ 2021 followed an upgraded structure. For the first time in the Soft Skills+ programme history, the event was held via online platforms, including a Soft Skills-based online quiz and an online workshop for students and teachers.

During the Grand Finale, Prof. Samantha Thelijjagoda, Dean of SLIIT Business School welcomed the participants and distinguished guests. Prof. Lalith Gamage, Vice Chancellor, SLIIT also addressed the gathering.

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