Tuesday, February 5, 2013

Sri Lanka's Commercial Bank gets US$75mn from IFC capital fund

Feb 05, 2013 (LBO) - International Finance Corporation, a unit of the World Bank has injected 75 million US dollars (9.6 billion rupees) as a subordinated loan to Commercial Bank of Ceylon which will boost its debt capital.

 The funds will be used to fund 16,000 small businesses which may create up to 170,000 direct and indirect job opportunities, Commercial Bank said in a statement.

 "This investment by IFC is much more than a milestone for Sri Lanka and Commercial Bank,” said Ravi Dias, managing director of Commercial Bank said in a statement.

"It will be a noteworthy infusion in to the national economy, given the significance of the SME sector.

"As Sri Lanka’s largest private bank, Commercial Bank is fully committed to exploring every possible opportunity to support post-conflict growth in the country."

The subordinated debt, qualify as Tier II capital under Sri Lanka's regulations, an IFC official said.

Jin-Yong Cai, IFC executive vice president and chief executive said the money will help the bank expand financing options to the underserved which is a key focus of the agency's work in South Asia.

The money will come as a 10 year loan from IFC Capitalization Fund, an asset management company started by IFC and the Japan Bank for International Co-operation to invest in banks "considered vital to the financial system of emerging-market countries," the statement said.

 "The agreement also demonstrates Sri Lanka’s long-term potential as a destination for investment and should serve as a positive signal for international investors," said Marcos Brujis, head of the IFC Capitalization Fund.

IFC said it had a committed portfolio of 274 million dollars in Sri Lanka covering infrastructure, tourism, renewable energy, finance, and health care.

Commercial Bank is the largest private bank in Sri Lanka.

source - www.lbo.lk

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