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(Sharecast News) - Manx Financial Group announced the raising of an additional £2m of regulatory capital on Thursday, after its independent directors considered the most suitable method of further augmenting the regulatory capital available to its subsidiary company Conister Bank.
The AIM-traded firm said the intention was to both to continue the growth in lending opportunities, and to take advantage of potential further acquisition.
As Conister enjoyed "increasingly high levels" of liquidity from customer deposits, the firm said the liquidity needed to be underpinned by its own separate regulatory capital, on the basis of a ratio as directed under the Isle of Man banking licence.
"As a result, and having considered other methods of raising capital, the independent directors have resolved, following negotiation, to accept on arms-length and standard commercial terms, two loans of £1m each," the board said in its statement.
"Each loan is for five years, with a coupon of 6.0% per annum, is repayable at any time and has no conversion rights."
It said one loan was from Burnbrae, which is 100% beneficially owned by its director Jim Mellon, and of which another director Denham Eke was also a director.
The other loan was from Culminant Reinsurance, which is 100% beneficially owned by director Dr Greg Bailey.
"Following this, the unaudited prudential ratio of Conister will be 18.9%, which compares very favourably with other banking institutions."
At 0900 BST, shares in Manx Financial Group were up 1.94% at 7.9p.
20 Jun 2014 12:24