The much awaited listing of the Union Bank IPO will take place on March 29 at the Colombo Stock Exchange.Having created history with its heavily over-subscribed IPO, Union Bank plans to consolidate the momentum gained, in its plans for the future.
As the Bank enters a new phase of growth and utilizes opportunities in a post-war scenario in Sri Lanka, it remains confident of blazing new trials in a sector recognized widely as a key stake holder in the country’s burgeoning economy.
Following the IPO which was oversubscribed by an astounding 417 times in the public category and 215 times in the customer category, Union Bank was also assigned BBB and P3 by RAM Ratings Lanka, which further confirms the Bank’s stability.
The ratings are premised on the bank’s healthy capitalisation as well as adequate funding and liquidity positions. Although Union Bank is seen as a smaller bank with a limited reach, the rapidly growing branch network will strengthen the bank’s presence throughout the island. Future plans include opening of over 45 new branches by 2013, using the new capital infusion, the Union Bank CEO and Director Anil Amarasuriya said.
The innovative fund raiser which comprised three stages including a Rights Issue and a Private placement prior to the IPO was handled in an extremely efficient and meticulous manner throughout the process by the Bank and its joint managers.
Analysts maintain that the response to the Union Bank IPO was up to date the highest ever oversubscription in Sri Lanka and is easily one of the highest globally.
The investor response clearly confirmed Union Bank’s status as a Power House in banking, able to attract and retain a very high level of interest and confidence.
Union Bank’s portfolio of services covers a range of banking solutions covering SME, corporate banking, personal banking, trade and treasury services, Amarasuriya says that providing banking services to the SME sector gives them the edge in a competitive market.
“We are small enough to offer the kind of flexibility to growing SME customers’ needs and large enough to fuel their growth into big time.” Amarasuriya said.
Union Bank’s recent acquisition of Sri Lanka’s oldest asset management company National Asset Management Limited (NAMAL) highlights the fast and positive results of Union Bank’s initiatives with regard to its growth and diversification objectives.
Union Bank acquired 51 percent of NAMAL from Milford Holdings for an undisclosed sum. Other key shareholders of NAMAL are DFCC (30 percent) and Ennid Capital in which company B P De Silva Holdings (Singapore) Ltd has a majority shareholding.
Amarasuriya highlighted that the acquisition of NAMAL fits well with the Union Bank’s expansion strategy. We see future opportunities to grow the asset management and unit trust business with the positive post war economic development and capital market development.
He further stated that the acquisition will also enable the bank to offer unit trust products to the retail customer base.
With a strong product line up and recovery of non-performing loans gathering momentum, Union Bank remains confident of its own unique footprint in the banking industry.
The fact that its Rights Issue was oversubscribed by four times and its Private Placement was oversubscribed by three times, together with the phenomenal success of the IPO, speaks volumes for the public confidence placed in the bank’s ability to deliver results.
The new infusion of capital will also ensure that the Union Bank is able to meet Central Bank’s core capital requirements successfully.
source - www.dailynews.lk
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