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FINANCIAL CHRONICLE™ » EXPERT CHRONICLE™ » NTB to inject fresh capital. Will it be equity infusion or debt infusion.?

NTB to inject fresh capital. Will it be equity infusion or debt infusion.?

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seyon

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Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Nations Trust Bank (NTB) is in talks with foreign parties in a bid to raise funds for their tier two capital, officials said. “We are discussing with different parties, many of whom are development finance institutions,” Saliya Rajakaruna, CEO NTB told the Business Times on the sidelines of an Investor Forum to launch its results. Tier two capital is capital which can absorb losses in the event of a bank winding-up.

He also said that NTB plans to set up four new branches during the coming quarter while adding upto 10 branches in 2012 bringing the total branch network to 60 service points by the end of next year.
He also added that most new branches are to be opened outside the western province moving from its “western province bank” model to a “nationwide” bank. This, he said will launch NTB to the mass market as well from its city centric model.

NTB recorded a net income of Rs 1.7 billion during the third quarter. NTB managed to post 38% year on year growth in profit to Rs 1.2 billion during the first nine months of 2011. Mr. Rajakaruna added that next year NTB will focus on the masses and the SME sector with their branch expansion.

NTB plans to launch a customer centric unique selling proposition to capture the growing SME sector as well. The bank's prime focus is an aggressive service oriented business model to meet working capital and trade financing requirements.

http://www.sundaytimes.lk/111120/BusinessTimes/bt06.html



Last edited by rijayasooriya on Sun Nov 20, 2011 10:01 am; edited 1 time in total (Reason for editing : title shortened.)

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slstock

How do u look into this fresh capital infusion, as per the statement, Management in discussion with foreign investor to inject fresh capital. this will be either equity capital by way of private placement or debt capital. as per my understnding tier two capital includes both source of fund.

New capital infusion would give the growth in business, however, How will impact the share price

@seyon wrote:slstock

How do u look into this fresh capital infusion, as per the statement, Management in discussion with foreign investor to inject fresh capital. this will be either equity capital by way of private placement or debt capital. as per my understnding tier two capital includes both source of fund.

New capital infusion would give the growth in business, however, How will impact the share price


The commons ways they can raise capital is as you say through equity or debt.
If they need to raise short term capital I guess they can go for

Equity based : though maybe a private placement or a right issue
Debt : They can take a loan , on go for debentures

But then they already went for warrant issue this year it appears ( also hope) they will not tax their shareholders further in the short term .

From what it says below
"Nations Trust Bank (NTB) is in talks with foreign parties in a bid to raise funds for their tier two capital, officials said. “We are discussing with different parties, many of whom are development finance institutions,”

It appears they are looking for a foriegn loan as the interest rates will be lower than from SL system.

@slstock wrote:
@seyon wrote:slstock

How do u look into this fresh capital infusion, as per the statement, Management in discussion with foreign investor to inject fresh capital. this will be either equity capital by way of private placement or debt capital. as per my understnding tier two capital includes both source of fund.

New capital infusion would give the growth in business, however, How will impact the share price


The commons ways they can raise capital is as you say through equity or debt.
If they need to raise short term capital I guess they can go for

Equity based : though maybe a private placement or a right issue
Debt : They can take a loan , on go for debentures

But then they already went for warrant issue this year it appears ( also hope) they will not tax their shareholders further in the short term .

From what it says below
"Nations Trust Bank (NTB) is in talks with foreign parties in a bid to raise funds for their tier two capital, officials said. “We are discussing with different parties, many of whom are development finance institutions,”

It appears they are looking for a foriegn loan as the interest rates will be lower than from SL system.


Fine if the mgt go to raise debt by way of foreign loan. After i saw this statement i am bit of scared that mgt will come out with right issue or private placement. Since I was collecting some NTB last week also.

@seyon wrote:
@slstock wrote:
@seyon wrote:slstock

How do u look into this fresh capital infusion, as per the statement, Management in discussion with foreign investor to inject fresh capital. this will be either equity capital by way of private placement or debt capital. as per my understnding tier two capital includes both source of fund.

New capital infusion would give the growth in business, however, How will impact the share price


The commons ways they can raise capital is as you say through equity or debt.
If they need to raise short term capital I guess they can go for

Equity based : though maybe a private placement or a right issue
Debt : They can take a loan , on go for debentures

But then they already went for warrant issue this year it appears ( also hope) they will not tax their shareholders further in the short term .

From what it says below
"Nations Trust Bank (NTB) is in talks with foreign parties in a bid to raise funds for their tier two capital, officials said. “We are discussing with different parties, many of whom are development finance institutions,”

It appears they are looking for a foriegn loan as the interest rates will be lower than from SL system.


Fine if the mgt go to raise debt by way of foreign loan. After i saw this statement i am bit of scared that mgt will come out with right issue or private placement. Since I was collecting some NTB last week also.

Though it is possible, I hope the NTB management does not have that short sight to have right issue at this stage. NTB share is trading at 52 low. After the warrant conversion the NTb price started coming down.

I presume NTB is looking at foriegn loans. DFCC also did the same few months ago. With JKH influence , guess NTB moght have a few contacts too.
Let hope for the best.

Moved to expert chamber.

@slstock wrote:
@seyon wrote:
@slstock wrote:
@seyon wrote:slstock

How do u look into this fresh capital infusion, as per the statement, Management in discussion with foreign investor to inject fresh capital. this will be either equity capital by way of private placement or debt capital. as per my understnding tier two capital includes both source of fund.

New capital infusion would give the growth in business, however, How will impact the share price


The commons ways they can raise capital is as you say through equity or debt.
If they need to raise short term capital I guess they can go for

Equity based : though maybe a private placement or a right issue
Debt : They can take a loan , on go for debentures

But then they already went for warrant issue this year it appears ( also hope) they will not tax their shareholders further in the short term .

From what it says below
"Nations Trust Bank (NTB) is in talks with foreign parties in a bid to raise funds for their tier two capital, officials said. “We are discussing with different parties, many of whom are development finance institutions,”

It appears they are looking for a foriegn loan as the interest rates will be lower than from SL system.


Fine if the mgt go to raise debt by way of foreign loan. After i saw this statement i am bit of scared that mgt will come out with right issue or private placement. Since I was collecting some NTB last week also.

Though it is possible, I hope the NTB management does not have that short sight to have right issue at this stage. NTB share is trading at 52 low. After the warrant conversion the NTb price started coming down.

I presume NTB is looking at foriegn loans. DFCC also did the same few months ago. With JKH influence , guess NTB moght have a few contacts too.
Let hope for the best.


Yes Hope for the best, now my strategy to hold for alleast five years.

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