SDB BANK

A development bank that uplifts small businesses,empowers women and drives sustainability

Q: What is a secondary public offering (SPO)?
 A: An SPO is a lesser known approach to raising capital compared to an IPO where a private company offers shares to the public for the first time.

An SPO is a follow-on offering where a quoted public company approaches the public to raise capital by issuing new shares. While both IPOs and SPOs enable companies to raise capital, the latter helps them broaden the shareholder base by offering shares to both existing and new shareholders.

Q: Why is SDB bank pursuing an SPO?
A: SDB bank enjoyed a tremendous growth in profit of over 200 percent last year and we want this momentum to continue.

We have developed a two phase capital plan to support the next three or four years of business growth. The complete capital plan approved by the board of directors required that SDB bank raise Rs. 5 billion.

The first phase was carried out last year by way of a rights issue where we raised 1.5 billion rupees with an oversubscription. For phase II, we opted for an SPO after evaluating several alternatives since it will offer both current and new shareholders an opportunity to invest in the bank.

Q: So what are the benefits of investing in the bank?
A: Firstly, investors seek commercial benefits – a minimum return. The bank will distribute part of its profits in the form of shareholder dividends at the end of each financial year.

For impact investors who want their investments to fulfil a particular purpose, SDB bank is an ideal investment vehicle because our goals are aligned with the country’s economic development, uplifting the rural economy, women’s empowerment and sustainability through digitalisation.

Q: And how does the bank contribute to women empowerment?
A: Women comprise 52 percent of Sri Lanka’s population. And we are committed to adding their contribution to the country’s development.

Internally, 50 percent of our workforce comprises women with females constituting 40 percent of the management team.

Externally, SDB bank supports many women in building and sustaining their businesses, by providing financial assistance and consultancy services.

The encouragement from our international partners such as the IFC, FMO (the Netherlands Development Finance Company), the Belgian Investment Company for Developing Countries (BIO) and the Dutch Good Growth Fund (DGGF) cements this ethos.

For example, we recently secured a US$ 40 million credit line from the US International Development Finance Corporation (DFC) under the condition that 40 percent of the loan is directed to women entrepreneurship development, ultimately benefitting Sri Lanka’s economy.

Q: In what ways does SDB bank support small businesses?
A: The bank is passionate about uplifting the SME sector with added focus on female oriented enterprises.

Influenced by and well connected to its cooperative network, the bank reaches out to small and medium scale entrepreneurs from all walks of life across the island. This level of accessibility to SMEs has powered the bank in stimulating economic development from the grassroot level upwards in Sri Lanka.

Throughout its 23 years of operations, SDB bank has been committed to developing and strengthening the SME sector to contribute to economic growth.

We are quintessentially development focussed; in our view, investors looking to contribute to the country’s development will find a perfect fit in us. SMEs are the backbone of any economy and we believe that supporting such businesses is the only way Sri Lanka can be developed.

Q: Could you outline how the bank has embraced digitalisation?
A: We have embraced digitalisation on two fronts – i.e. internal and external.

Our recent rights issue was conducted on a digital platform. Given the restrictions posed by the pandemic, we couldn’t send shareholder communications in the usual manner by post. Backed by our internal capacity and support from regulatory authorities, we quickly shifted to an online platform, positioning ourselves as the first entity listed on the Colombo Stock Exchange (CSE) to conduct a rights issue digitally.

The bank also played a leading role – together with the Central Bank of Sri Lanka and banking community – in launching Lanka QR in September last year.

Furthermore, our revolutionary multifunctional mobile wallet – the UPay app – empowers customers with multiple digital payment options and value added services.

Internally, we have introduced e-signatures in our approval processes. Any employee can create a document and have it approved in minutes. We have also enabled real-time monitoring of branch level performance, collections and recoveries.

Q: How can investors get on board the bank’s SPO?
A: We will be launching our SPO on a digital platform so investors can easily download, complete and upload their applications, and make payments through our website.

SDB bank is a development oriented bank focussed on uplifting the rural economy by supporting SMEs. Investors willing to contribute to developing the nation are invited to join us and make our SPO a success.

– Compiled by Ruwandi Perera
INTERVIEWEE DETAILS
Terrance Kumara
Chief Financial Officer
COMPANY DETAILS
Telephone:2832515
Email:terrance.k@sdb.lk
Website:www.sdb.lk