Sri Lanka Amana Bank seeks foreign investors for capital enhancement

Dec 30, 2016 (LBO) – Sri Lanka’s Amana Bank today said its director board is currently in discussions with prospective foreign investors to enhance their capital in line with Central Bank requirements. The budget 2017 proposed to increase the minimum core capital level from the current 10 billion to 20 billion rupees for all licensed commercial banks.

It also proposed to increase the minimum capital of licensed specialized banks to 7.5 billion and primary dealers to 1.5 billion rupees. “The Bank is seeking to enhance the required capital as per CBSL requirements,” Amana Bank said in a stock exchange filing. Amana Bank said such raising of funds, by way of equity would be subject to the approvals of the Central Bank, Exchange Control Department, SEC, CSE and shareholders. “The Bank would make further Announcements to the market, on the progress of such discussions, upon receiving firm commitments.” The government is of the view that consolidation of financial institutions will be beneficial in the long term and encourages voluntary consolidation especially for the private banks. The government said it will enhance the size of the banks, facilitate the fund raising from diversified sources, enhance risk taking capacities and enable banks to participate in large state and private sector projects. Sri Lanka’s banking sector is relatively polarized with 6 banks out of the total 34 banks in the country accounting for almost 65 percent of the assets at around 5,600 billion rupees.