KSE approves listing of Rs 3,000m Soneri Bank's TFC

The management of Karachi Stock Exchange (KSE) has approved the application for listing and quotation of second issue of rated, listed, unsecured and subordinated Term Finance Certificates (TFCs) of Rs 3,000 million of Soneri Bank Limited on the completion of formalities under Listing of Companies and Securities Regulations of Exchange.

The trading in the TFCs of the bank will start at KSE from Wednesday (today) whereas the transactions will take place in the said TFCs of the bank through Bonds Automated Trading System (BATs) and shall be settled on T +1 settlement basis. The TFCs of the bank have already been declared eligible security by the Central Depository Company of Pakistan Limited (CDC) and all the transactions shall be settled through the National Clearing Company of Pakistan, which has assigned the Security Symbol as "SNBLTFC2".

The tenor of the instrument would be eight years ending in 2023 with expected profit rate would be based on 6M-KIBOR Plus 135bps p.a. payable semi-annually in arrears whereas the major principal repayment (99.7%) would be in bullet form at maturity in the 96th month from the date of issue. According to the official reports, Soneri Bank Limited would retain the call option on the instrument which may be exercised, in part or full, after five years of issue.

Term Finance Certificate (TFCs) issued by Soneri Bank Limited in recent months received overwhelming response to get oversubscribed by 1.3 times to generate value of Rs 805 million instead of target amount of Rs 750 million.

The details issued by TFC manager Arif Habib Limited, the banks received total number of 10 applications through six various banks out of total 12 commercial banks participated in the TFC float. The additional amount of Rs 55 million was showed that TFC of the bank was seen highly attractive by the investors which will bode well for the bank to material the float deal of Rs 3 billion. The reception of more than targeted amount was one of the results of competition among the various commercial banks which is healthier within the banking industry. Soneri Bank floated certificates of Rs 750 million as part of its Rs 3 billion issuance of Term Finance Certificate (TFC) for the public offering held on July 7 and 8 after it received a green signal from the State Bank of Pakistan (SBP).

Earlier, the bank has received Pre-IPO subscription which has been disclosed under other liability pending IPO, regulatory approvals for which are underway. This includes amount of Rs. 2.25 billion received from investors as Pre-IPO subscription of the bank's second rated, unsecured, subordinated and listed term finance certificates issue. The management's key focus would be to enhance volumes in trade business to support non-fund revenues. At the same time, the proceeds from the proposed TFCs issue would be utilized to support business operations.

This issue would be second such issuance by Soneri Bank; the first TFC worth was Rs 1.200 billion for eight years, issued in 2005 and was repaid in 2013.

Soneri Bank is one of the best performing mid-tier banks in the country fulfilling financial regulatory requirement of paid-up capital standing at Rs 11 billion with Capital Adequacy Ratio (CAR) standing at 10 percent. SBL has posted a profit before tax (PBT) of Rs 1.913.31 billion and profit after tax (PAT) of Rs 1.107.61 billion for the half-year that ended on June 30. The bank's revenue increased by 24.98% to Rs 5.42 billion against the last year's figure of Rs 4.33 billion, whereas the expenses increased just by 3.88%.