Enhanced capital: Silkbank achieves 10% CAR

Receives Rs2b as advance against shares, which will help meet capital needs.

KARACHI:

Silkbank has achieved the capital adequacy ratio (CAR) of 10%, a stock exchange filing by the bank said on Thursday.

“We hereby confirm that the bank has successfully received Rs2 billion as advance against shares, which will contribute towards meeting the minimum capital requirements as stipulated by the State Bank of Pakistan (SBP),” the notice said.

CAR measures the soundness of a banking institution and reflects the level of protection its depositors enjoy. It is expressed as a percentage of a bank’s risk-weighted credit exposures.



Silkbank has already announced the issue of right shares. The bank’s spokesman said it had received a major equity injection commitment from an international investor. The issue of right shares would take the bank’s total equity to Rs16 billion, he added.

“With enhanced capital, Silkbank’s business momentum is expected to further accelerate in 2015. The equity injection is a testament to investors’ belief in the bank’s success and will boost the depositors’ confidence and trust,” the spokesman said.

The federal government put KASB Bank under a six-month moratorium on November 15 because it lacked capital adequacy. That made investors worried about capital adequacy of two other commercial banks, namely Silkbank and Summit Bank.



Last week, Summit Bank increased its capital by Rs7 billion through a right issue at Rs10 per share in order to meet minimum capital requirements.

Silkbank made an after-tax profit of Rs101.2 million for the first nine months of the current year. It had posted a net loss of Rs624.3 million for the comparable nine-month period of 2013.

Published in The Express Tribune, December 12^th, 2014.

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