HNB Raises $ 75 Mn
Hatton National Bank plc (HNB) recently entered in to an agreement with the German Development Finance Institution DEG to raise USD ($) 25 million through an eight year subordinated loan which forms part of the Bank’s tier II capital.
The funds raised would be utilised to finance the growth in small and medium enterprises (SMEs) which is one of the most important sectors supporting Sri Lanka’s post conflict growth.
The loan agreement was signed in Colombo by HNB Chairperson Dr. (Ms.) Ranee Jayamaha and Managing Director/CEO Rajendra Theagarajah, and DEG Asia Director Dr. Hubertus Pleister and Vice President Asia Matthias Goulnik.With the signing of the agreement, the total capital and long term debt raised by HNB during the past 10 months surpasses Rs. 21.5 billion.
At the signing ceremony, Jayamaha said, “The funds raised from DEG will not only boost the loanable funds available to HNB, but also form part of a solid foundation in fostering the Bank’s medium to long term growth. This demonstrates the confidence the foreign investor community has placed on HNB as the Bank has been successful in raising foreign funds totalling $ 75 million within a period of a month in 2012.” Theagarajah said, “This transaction is unique as HNB is one of the very first banks to raise tier II capital denominated in $s with a long term tenure of eight years. It clearly demonstrates HNB’s ability to raise long term funds from a well reputed overseas source at an attractive interest rate, no doubt a testament to the strong and stable growth recorded by the Bank in recent years.”Pleister added, “With our commitment, we will strengthen HNB, thereby enabling it to further expand its financial offer. At the same time we are fostering Sri Lanka’s financial sector, facilitating access to long-term investment capital especially for SMEs. These enterprises are a major engine behind economic growth, particularly in developing countries. This is why the promotion of these enterprises is a special concern to DEG.”
DEG, Germany’s KfW subsidiary, is one of the largest European development finance institutions for long-term project and company financing. For 50 years, DEG has been financing and structuring investments of private companies in developing and emerging economies.
DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy, from agriculture to infrastructure and manufacturing to services. It also focuses on investments in the financial sector in order to facilitate reliable access to capital locally. DEG’s aim is to establish and expand private enterprise structures in developing and transition countries and thus create the basis for sustainable growth and a lasting improvement in the local population’s living condition.
HNB is a premier private sector bank in Sri Lanka with a history which traces its origins as far back as 1888. Over the years the Bank has been recognised by prestigous international and local bodies for excellence in all disciplines including banking, human resources management, corporate governance and tranparency.
This year HNB was recognised as the “Best Retail Bank in Sri Lanka” by the Asian Banker for the fifth consecutive year. HNB also became the first Sri Lankan bank to obtain an international credit rating from Moody’s Investors Services.