Even if the proposed rights issue will not come through, Sampath Bank's capital adequacy ratio can be managed during the next few years, according to senior officials in the bank.
"Even if the proposed rights issue is not approved by the shareholders (at the Extra-ordinary General Meeting (EGM) to be held next Wednesday), the bank's capital adequacy ratio can be managed in the coming few years," Ranjith Samaranayake, Chief Financial Officer, Sampath Bank told media at the unveiling of its financials for the first nine months of 2008.
Harris Premaratne, Sampath's CEO Designate said that the share price was at Rs. 100 when the rights was decided a few months ago, but subsequently the financial crisis faced by many markets percolated to Sri Lanka which brought the Sampath shares along with other shares down. "So the shareholders need to decide at the EGM whether they will subscribe for the rights or not," he added.
He said that IFC wanted to subscribe for 15 % of the rights at Rs. 117 a share, which would have brought Rs. 2 billion to Sampath, but they deferred participation. "IFC wants to wait till there is a better economic outlook for them to subscribe to the rights." Sampath recorded a profit of Rs. 1 billion for the first nine months of the year amounting to a growth of Rs. 240.5 million or 31.3 percent over the Rs. 767.2 million posted during the same period in 2007. Last month the bank saw Arthur Senanayake, a founder director and Deputy Chairman taking over as Chairman on the retirement of Edgar Gunathunga.