Financial Times

Interest rates to come down

There are 'some signs' of interest rates sliding in the future in Sri Lanka, according to senior bankers.
"There are some signs that interest rates will come down (in the future). Therefore the 19 percent interest the Bank of Ceylon (BoC) is offering on their debentures for the next five years is high," Gamini Karunathilake, CEO, Merchant Bank of Sri Lanka, managers to the BoC debenture issue said, addressing an investor forum on the debenture issue earlier this week.

BoC, celebrating 69 years, opened its first ever listed debenture issue on Thursday.

The debenture is in a bid to enhance their capital adequacy and increase international operations.
"We are planning to enhance business in London, Europe and perhaps in India as well," S. Rajakaruna, Chief Financial Officer, BoC said. He said this equity – like capital protected investment rated AA – by Fitch Ratings can be used as collateral to obtain loans.

He said the debenture issue, valued between Rs.3 – 5 billion, is open to all citizens of Sri Lanka and is attractively structured via three interest rate options. The largest commercial bank in the country, BoC has 25 percent of the assets in the commercial banking industry with Rs 438 billion. It also has the largest capital base of any domestic bank at Rs 21 billion.

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