Sri Lanka's Sampath Bank gets $62.5M syndicate loan from India

Sampath Bank will infuse capital to support the fund base by securing a US $ 62.5 million syndicate loan from India's Bank Mascat.

One of the mandated lead arranger, Citi Group Global Markets Asia Limited and the Citibank Colombo Country Head and CEO Ravin Basnayake said Sampath Bank has achieved phenomenal growth and revenue by reaching all targets. This transaction will be a benchmark and will boost the confidence of international markets, he said.

He pointed out that there is a need to access foreign capital markets to conclude this deal, one of the largest deals in recent time.

“We have successfully concluded the fund raising initiative through a syndicated loan which opened for $ 30 million and over subscribed by two-fold to close at $ 62.5million. The bank's strong balance sheet and related financials, coupled with tremendous growth resulted in overwhelming responses by the syndicate participants amid prevailing global economic issues ,” Sampath Bank Managing Director Aravinda Perera told Daily News.

“The confidence of foreign investors in the Bank's performance to date and its ability to sustain growth was amply evidenced by the interest shown in the syndication by the foreign market. We were received with a lot of enthusiasm and was accepted as a leading bank in the backdrop of recognizing Sri Lanka as a safe destination for investment,” he said.

"The over subscription is evidence of confidence in Sri Lanka and the banking sector. We are looking forward to be a part of the strong economic growth of the country," said Bank Mascat Chief Executive Officer Abdul Razak Ali.

The funds raised will be utilized to meet the forecasted asset growth where the bank recorded a growth of Rs 43.5 billion in its advance portfolio for 2011, a growth of over 35 percent. An impressive 23 percent growth is forecasted for this year.

This was Sampath Bank's second venture to raise funds off shore, having raised $ 45 million in 2007 through a similar syndication which was paid off as scheduled. It has been one of the first private banks to tap the off shore market for funds.