NDB and the Norwegian Development Finance Institution, Norfund, have reached an agreement for Norfund to invest up to 9.99% in National Development Bank PLC (NDB). A press release issued by the Norwegian Embassy said

Under this agreement, Norfund will participate in the Rights Issue for LKR 8Bn that NDB has already announced by way of subscribing to unsubscribed rights and also by way of a private placement if required. This investment is subject to other conditions, including regulator and shareholders approvals. This is Norfunds 1stequity investment in Sri Lanka. It said

The investment comes at a time when international rating agencies have downgraded Sri Lanka’s credit rating. This shows that Norfund endorses NDB’s resilience in a challenging environment and alignment to international standards.

NDB Chairman Eshana De Silva commented:“Norfund’s decision to invest in NDB shows the confidence they have in NDB and the Sri Lankan Economy”

Group CEO of NDB Bank Dimantha Seneviratne commented: “We are extremely happy to have the opportunity of partnering with a DFI such as Norfund as it seeks to support the SME sector in reviving our economy. The values Norfund will bring in terms of technical assistance, long term funding, know how etc will help the bank and the country overcome the current challenges. As NDB strives to improve financial inclusion by promoting digital technologies, Norfund can make available its experience and technical assistance to help NDB improve in this area. Further on the back of the numerous global awards the bank has received in the recent past, this was a further endorsement of NDB’s strong sustainable growth model and our close alignment to global standards.”

The equity investment by Norfund is the first foreign equity placement agreement for NDB bank. This will increase its foreign shareholding percentage to around 21%. The Private Placement is priced at a 10% premium to the Rights Issue at LKR 82.5 per share.

This equity infusion together with the proposed Rights Issue will help buttress the Tier I capital of NDB bank enabling it to continue its growth momentum and support the economic revival in a post COVID environment.

NDB Bank recently announced its results for year ended 2020, which showed a robust 21% growth in deposits and 8% growth in Loans and Advances resulting in 8% growth in PAT.  With one of the best Cost to Income Ratios in the industry, NDB continues to leverage on its technologic investments to deliver sustainable returns for the Bank, customers and other stakeholders.

Norwegian Ambassador to Sri Lanka. Trine Jøranli Eskedal said, “Sri Lanka was added to Norfund’s list of mandated countries in 2019.  NDB is Norfund’s first equity investment in Sri Lanka and the second investment in the country. I believe that this is a good indication of the faith and trust Norfund has placed on the Sri Lankan private sector, and I hope it conveys a positive message to other potential investors in Sri Lanka, in particular in this challenging time.”

Norfund Regional Director for Asia, Fay Chetnakarnkul commented: “Financial inclusion is critical to support economic growth, job creation and reduce poverty in Sri Lanka. Norfund is pleased to support NDB’s growth strategy that targets small and medium-sized businesses. This is aligned with Norfund’s mandate. We recognize and appreciate that NDB has a strong management team and a competent board who share our value in upholding high environmental, social and governance standards.”


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