Colombo, Sri Lanka – 28 September 2026 – Pan Asia Banking Corporation PLC (PABC) has announced its intention to issue up to LKR 4 billion in Basel III compliant, Tier 2, listed, rated, unsecured, subordinated, redeemable debentures. This strategic move, approved by the bank’s Board of Directors on 28th September 2026, aims to strengthen its capital base in line with evolving regulatory standards.
The proposed debenture issue will comprise up to 40,000,000 debentures, each with an issue price (par value) of LKR 100/-, amounting to a maximum of Rupees Four Billion (LKR 4,000,000,000). These debentures will carry a five-year tenor and incorporate a Non-Viability Conversion Feature, a critical component for capital instruments under the Basel III framework.
Strengthening Capital with Basel III Compliance
The issuance of these Tier 2 debentures underscores Pan Asia Bank’s commitment to adhering to international banking regulations, particularly the Basel III framework. Basel III, a global regulatory standard on bank capital adequacy, stress testing, and market liquidity risk, requires banks to hold sufficient capital to withstand financial shocks. Tier 2 capital, also known as supplementary capital, includes instruments like subordinated debt, which absorb losses in the event of liquidation only after Tier 1 capital has been exhausted.
The Non-Viability Conversion Feature embedded in these debentures is a key element of Basel III compliance. This feature allows for the conversion of the debt into equity, or a write-down of the principal, if the bank reaches a point of non-viability, thereby providing an additional layer of loss absorption capacity.
Key Features of the Debentures
- Issuer: Pan Asia Banking Corporation PLC
- Type: Basel III Compliant, Tier 2, Listed, Rated, Unsecured, Subordinated, Redeemable Debentures
- Tenor: 5 Years
- Special Feature: Non-Viability Conversion Feature
- Maximum Issue Size: Up to 40,000,000 Debentures
- Issue Price: LKR 100/- per Debenture (par value)
- Total Value: Up to LKR 4,000,000,000/- (Rupees Four Billion)
Future Outlook and Regulatory Approvals
Pan Asia Bank has stated that the proposed debenture issue is subject to obtaining all necessary regulatory approvals. The bank also intends to have these debentures quoted on the Colombo Stock Exchange (CSE), offering investors an opportunity to participate in the growth of one of Sri Lanka’s prominent financial institutions.
This capital raising initiative is expected to bolster Pan Asia Bank’s financial resilience, support its strategic growth plans, and enhance its capacity to serve its diverse customer base across the island. The announcement was made by Mr. Naleen Edirisinghe, Director/Chief Executive Officer of Pan Asia Banking Corporation PLC, to the Colombo Stock Exchange.
Source: Read original document
