MBSL raises a whopping 2.1 billion via a Rights Issue
The Merchant Bank of Sri Lanka and Finance PLC, better known to customers as MBSL, successfully raised a 2.1 billion Rights Issue and is presently geared for an aggressive growth. This significant lift comes together with the strength of its owning giant the iconic Bank of Ceylon (BOC), Sri Lanka’s foremost leader in the national banking sphere. The Rights Issue is a historic milestone in MBSL’s illustrious journey since the inception and it will afford customers, shareholders, and all stakeholders along with the general public, a unique opportunity to share in its remarkable progress across the entire market segment.
As a key Finance institution, the raising of its capital base affords MBSL the added monetary equilibrium in continuing its strategic support of SMEs and other entrepreneurs who form the backbone of the country’s economy, accounting for over 50 percent of the nation’s GDP.
Together with a direct ownership stake in MBSL, the Bank of Ceylon has displayed complete confidence in the Management of its majority-owned subsidiary and warrants a successful outcome to this capital raising exercise. The Rights Issue also reinforces MBSL’s financial stability and ensures that it can sustain a stronger capital reserve, by strengthening its equity base and thereby complying with the Capital Adequacy Ratios (CAR) in line with the stringent guidelines stipulated by the Central Bank. With this venture BOC’s dynamic infusion has successfully met the minimum CAR criteria and MBSL’s tier one capital base currently stands at 11.56 percent.
With the steadfast power manifested by the BOC’s flagship subsidiary, MBSL has planned a major expansion drive in connection with its financial ventures and it is geared and ready to meet a very challenging environment positively and confidently as the country reopens after a protracted Covid-19 affected closure. This needed boost from the Bank of Ceylon will not only help strengthen MBSL’s capital base, it will contribute aggressively towards further enhancing a progressive growth factor. The overall outcome of this Rights Issue will see to a positive growth in investment potential with MBSL catering to various industry sector needs across the spectrum. From commercial agriculture to manufacturing and production, from exports to imports, the opportunities for investors as well as for entrepreneurs in the SME segment will be tremendous.
Under its new Management, MBSL has showcased phenomenal progress by achieving a more than modest 3 percent growth in the first quarter of 2021 alone. This cornerstone is seen as a highly formidable accomplishment considering that the period was constantly subject to lockdowns and a general go-slow with regards to the country’s commercial activity following the upsurge of the pandemic.
Mr. Kanchana Ratwatte, the Chairman of MBSL, who is also the Chairman of the mammoth BOC banking institution, when asked to comment, stated that he was “completely confident in supporting the investment made by the Bank of Ceylon”, and added that he was “extremely optimistic about the future which would see the synergy of resources between these two entities, thereby achieving the desired growth”.
Furthermore, Merchant Bank of Sri Lanka and Finance PLC recently reinforced its strength with the recruitment of reputed banker Mr. Dammika Hapuhinna, who joined MBSL’s esteemed Management as its Chief Executive (CEO) bringing with him over 15 years of hands-on experience in the international arena as a professional banker. Subsequent to MBSL’s Rights Issue Mr. Hapuhinna also declared that he firmly believes a definite value addition to all stakeholders through this much anticipated capital infusion.