"We already have a portfolio of about two million dollars in the Maldives," Samapath Bank chief Anil Amarasuriya said.
The bank has previously lent to Bangladesh. Sri Lanka's state-owned Bank of Ceylon has a branch in the Maldives. But Sri Lankan private banks like HNB, have been lending in the atolls for some time and found it to be profitable activity.
Maldives has the highest per capita income in South Asia, the highest economic growth and low single digit inflation. It has a booming premium leisure market in addition to fisheries.
Sampath originally went to the banks for 25 million dollars but heavy oversubscription allowed it to raise 45 million dollars in 3-year funds.
HSBC chief David Griffiths says the oversubscription was an indication of confidence placed by foreign lenders in Sri Lanka.
HSBC had previously raised 210 million dollars for the Bank of Ceylon and also participated in a recent sovereign issuance.
Nine banks from Asia and the Middle East were involved with the syndication following roadshows in UAE and Singapore.
HSBC and Habib Bank had put in 7.5 million dollars each, Mashreqbank 7.25, and Bank Negara Indonesia and Muscat Bank 5 million dollars each.
UBAE, ICICI and Exim Bank of Taiwan were also in the syndication.
Amarasuriya said the bank would also lend the money for Sri Lankan clients who wanted dollar financing, and the bank was not carrying the exchange risk to lend in rupees.
Sri Lanka's government is now encouraging local firms to borrow abroad. One year Treasury bills are at 19 percent and country-wide inflation has topped 22 percent due to lack of fiscal restraint.Source: LBO