Sri Lanka’s Sampath Bank has announced plans to raise up to 7 billion rupees by issuing Tier 2 debentures that comply with Basel III regulations. Additionally, if the initial offering sees high demand, there is an option to increase the total raised by another 3 billion rupees, according to a recent filing with the stock exchange.
The bank’s board has sanctioned the issuance of a maximum of 70 million listed, rated, unsecured, subordinated, redeemable debentures, which will include a non-viability conversion feature. Each debenture will be priced at 100 rupees and will be available in tenures of 5 and 7 years.
This issuance marks the second tranche of a program previously approved by shareholders, aimed at generating up to 20 billion rupees over a two-year period through one or more offerings. In December 2025, Sampath successfully raised 10 billion rupees in the program’s first tranche.
The upcoming issuance will require regulatory approvals, as stated by the bank. Sampath highlighted this debenture initiative as a key component of its capital strategy in its financial results for the first quarter of 2026, during which it reported a profit after tax of 6.2 billion rupees.
As of March 31, 2026, the bank’s total assets surpassed 2 trillion rupees for the first time, reflecting a 6% increase over the quarter. Gross loans rose significantly by 127.5 billion rupees, reaching a total of 1,351.1 billion rupees. The bank maintained liquidity ratios above the regulatory requirements, reporting a liquidity coverage ratio of 187.87% and a net stable funding ratio of 161.30%.
Tier 2 debentures contribute to a bank’s supplementary capital under the Central Bank’s Basel III framework, assisting financial institutions in fulfilling capital adequacy standards as their lending portfolios grow. Recently, other banks in Sri Lanka, such as the National Development Bank, have also turned to similar subordinated debt and green bond issuances to bolster their capital ratios in light of increasing credit demand.
Sampath Bank’s stock was trading at 140.00 rupees, reflecting a 1.63 percent increase.
