Vista Knowledge Ltd, Genting group firm holds 19.4 percent of the Union Bank, and Select Gain another Genting entity holds 7.01 percent of the firm.
By a series of private placements and rights issues the bank had raised 2.5 billion rupees to boost its capital to over 4.5 billion rupees.
According to published results the bank had revenues of 1.56 billion rupees in the nine months to September.
Interest income fell 7 percent to 1,313 million rupees in nine months to September from a year earlier while interest expense fell at a faster 29 percent allowing net interest income to grow 62.3 percent to 546 million rupees.
Other income rose steeply to 250 million rupees from 144 million a year earlier with a 65 million gain on securities.
Officials say unaudited results for the full year indicate a profit of 148 million rupees. Next year with lower corporate and financial value added tax, even if the same profit was made it would result in a bottom line of 223 million rupees, a promoting analyst said.
After the public issue the bank will have about 350 million shares.
At 223 million rupees of profit the bank will earn about 63 cents per share indicating an price to earnings multiple of 39 but promoting analysts are forecasting profits in 2011 to be around 350 million rupees which will cut the earnings multiple down to 25.
Chief executive Anil Amarasuriya says Union Bank is now positioned as a small and medium enterprise and retail sector bank with an island-wide reach. It will have at least 25 branches by the end of the first quarter of this year.
At the beginning it was positioned as a bank serving second tier corporates. However it then ran into large bad loans was supported by Sampath Bank which now holds about 7.9 percent of the bank.
Amarasuriya says the bank plans to rely heavily on technology and is in the process of evaluating a core banking system which may cost between two to three million US dollars.
With the new investors pumping cash in the firm it now has close to 30 percent capital adequacy and is looking to expand credit in a growing economy where interest rates are also low.
The Genting group and firms related to the De Zoysa family including Associated Electricals Corporation and Dubai based investment bank Alexis Lovell will voluntarily hold their shares taken in recent placements until six months after the public offer.
In 2007 Lovell and Faisal Al Abdullah Al Faisal Al Saud first bought into the bank and subsequently other investors also came in.
source - www.lbo.lk
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