Coming off a hugely successful quarter, recording 282 percent increase in profit compared to the corresponding quarter in the previous year, SDB bank and its diverse shareholder base are set to enter another period of consistent growth with plans for a second public offering (SPO) facilitate the second phase of their continued growth journey in an effort to create greater value for its shareholders,
The bank’s extended growth phase comes on the back of its long-term SME development efforts which have resulted in loan growth across the sector; its digital transformation initiatives which have improved access to solutions and service delivery; and its support of key segments including female-led enterprises, the bank said in a media release.
The bank embarked on a two phased capital raising plan last year to support business growth over the next 3-4 years with the first phase carried out via the bank’s extremely successful rights issue in FY2020, which led to Rs. 1.5 billion being raised. This issue had the twin distinctions of being the first-ever digital rights issue by a Colombo Stock Exchange-listed entity plus the first local digital share subscription to be oversubscribed.
SDB bank’s decision to go for an SPO — a capital raising exercise by a company that is already listed on the CSE and involves the sale of new shares to the public through a secondary offering - is based on its decision to invite their customers, shareholders and other stakeholders as well as the general public to take part in this journey. This is a result of its extended growth phase and the culmination of its two-phase capital plan plus its commitment to create even more value for its shareholders.
With 68 million new ordinary voting shares to be issued to the public via the SPO at a share price of Rs.51.50, and 20 million additional shares in case of an oversubscription, the fresh capital raising effort will enable in further reinforcing the bank’s equity base and consequently improve its capital adequacy ratios in adherence with the BASEL III guidelines of the Central Bank. Equally, the funds raised via the SPO will support SDB bank’s expected loan portfolio growth for the period 2021-2022, the release said.
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