State Bank of Mauritius to issue bonds to fund expansion
SBM is exploring new markets in Africa and Asia, and funds of Rs 1 billion and $50 million from the two bond issues are expected to finance its expansion drive. (Image: David Sanger)
Mauritius’ second largest bank, SBM, has received approval from the island’s stock exchange to issue two bonds to raise funds for expansion on the Indian Ocean island and overseas.
SBM, already present in India and Madagascar, is exploring new markets in Africa and Asia. As such, a 10 year bond of Rs 1 billion (around $33 million) and a second issue worth $50 million is expected to help the bank fund its expansion drive.
The listing committee of the Stock Exchange of Mauritius stated that the purpose for offer of the bonds is to further strengthen the bank’s capital base and also diversify the sources from which SBM obtains financing to fund business growth on the island and abroad.
The committee added that if the issues are oversubscribed, the bank may raise up to Rs 1.5 billion rupees and $75 million from the two bonds.
The bonds will be listed on the Stock Exchange of Mauritius next year, with March 25 and June 18 indicated as tentative dates for the Mauritian currency bond and the dollar-denominated instrument respectively.
Meanwhile, SBM has displayed a strong financial performance in 2013, with a 13.6% increase in pre-tax profits at Rs 4.70 billion for the fifteen months ended September 2013 compared to Rs 4.14 billion obtained for the corresponding period ended September 2012. The bank is changing its financial year end to December 31 from June 30, and the current reporting period will run for 18 months.
An increase of 15.1% was notched up in the pre-provision income compared to the corresponding period last year. Net interest income zoomed up 18.9 % for the period, arising from continued intensive and robust balance sheet management.
And, SBM’s exceptional efforts have been recognized through a haul of three major best bank awards in 2013– Euromoney Awards for Excellence in July, Capital Finance International Awards in October and The Banker Awards in November.