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The International Finance Corporation (IFC), the private sector financing arm of the World Bank, has the BNP Paribas Bank managed South Asia Access fund to renounce the majority of their rights in the Rights Issue of Nations Trust Bank that has just been concluded. IFC however will retain its existing shareholding of 7.5 million shares.

The total subscriptions by the public for shares by the final date of renunciation exceeded the allotted amount by 18%.

IFC in the first instance offered all employees of Nations Trust Bank their allotment of rights. This would result in every employee of Nations Trust Bank becoming a shareholder of the bank with shares ranging from 100 to 200,000 each.

This will be the first time in a country that all the staff of a bank, or a private company would become shareholders in an institution in which they are employed, having invested their own savings without any financial support from the institution concerned, said Director/CEO of the bank Moksevi Prelis.

IFC has selected a leading international banking group BNP Paribas managed South Asia Access Fund to take up the balance 3.35 million of their share allotment. Subsequently the BNP South Asia Access Fund has become a major shareholder of Nations Trust Bank with approximate 4% shareholding.

The other major shareholders of the bank are the John Keells Group with 25% and Central Finance Co with 20%.

Nations Trust Bank has been making rapid inroads into the banking sector with new and innovative products and services, has reached its maximum potential and needed to recapitalise to move into the next level. The Rights issue of 30 million shares will increase the core capital of the bank from the current level to Rs.1 billion with the capital adequacy ratio projected to increase to 16.8%.

The bank which has gained increasing recognition since its inception in 1999 performed exceptionally well during the first quarter of the current year with total business turnover growing to Rs.548 million compared with Rs.167 million in the first quarter of 2002. Deposits had reached Rs.5.3 billion and with the acquisition of Wadlock Mackenzie in 2002, the asset base has increased to Rs.16.6 billion. Steady growth in business volumes has yielded a net profit for the first quarter of Rs 83.4 million.

With 21 branches and service counters and further expansion plans in store, Nations Trust Bank is reinforcing its resolve to establish itself as a prominent player in the financial services industry of Sri Lanka.

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