Depositors need not worry as govt will take over banks before merger: BB governor
Merger plan drives up six banks’ share prices

The government will take over banks before the merger, said Bangladesh Bank governor Ahsan H Mansur assuring depositors that they do not need to worry about their money as they will be part of a strong bank.
Governor made the comment at a press conference held at Bangladesh Bank headquarters today (27 May).
However, he did not mention how many banks will be merged.
Meanwhile, banks listed with the Dhaka Stock Exchange saw a sharp rise in share prices following the announcement that weak banks will be taken over by the government.
Assurance on deposits helped rebuild confidence among retail investors causing a rise in share prices, said market insiders.
On the other hand, some banks experienced trading halts as there were no sellers in Dhaka Stock Exchange today.
What BB governor says about merger
Governor urged depositors not to withdraw money as their deposits will be safe, thanks to the takeover by the government.
The governor said there is no reason for depositors to worry if the ownership of these banks is taken over by the government, as the first step will be a legal government acquisition. At that stage, depositors' money will be 100% protected.
Afterward, the government will inject the necessary capital, restructure the bank, and bring in large domestic and foreign strategic investors before returning the bank to private ownership. "Our goal is strong investors and a strong bank," he said.
The governor added, "We are not suddenly planning to merge many banks. Taking such large steps abruptly would increase instability. We will begin working gradually with a few banks and then bring others in phases."
Eighteen banks will not be allowed to pay dividends
Ahsan H Mansur said that 18 publicly listed banks in the country's banking sector cannot declare dividends for 2024. These banks will not be allowed to pay dividends as long as they face required capital shortfalls or benefit from deferral facilities.
"Why should a bank distribute dividends to shareholders when it has a capital shortfall?" the governor asked. "Even if a bank takes three years to meet the required capital, it will not be allowed to pay dividends during that time. Its net profits during this period must be retained to strengthen capital, because protecting the interests of our depositors is our top priority."
According to current BB regulations, a bank must maintain a minimum capital of 10% against its risk-weighted assets. In addition, a Capital Conservation Buffer of 2.5% is also required, bringing the total capital adequacy requirement to 12.5%.
In response to a question regarding how Dhaka Bank managed to pay dividends despite having a capital shortfall, the governor responded that if a bank's capital shortfall is as minor as 0.12%–0.13%, a small grace was granted once to allow limited dividends.
However, this exemption will not be available if the bank remains in shortfall next year.
How share market reacted
Following the announcement of a plan to merge six financially weak banks by July, the share prices of these banks soared significantly today, rising between 3.63% and 10%.
The six banks – Union Bank, Global Islami Bank, National Bank, First Security Islami Bank, Social Islami Bank and Exim Bank – are listed on the stock exchanges.
According to data of the Dhaka Stock Exchange (DSE), Union Bank's stock price soared the highest by 10%, which is the upper limit for a single day trading to Tk3.3 each.
Due to failure to hold the annual general meeting (AGM) on time, the DSE put its shares on the Z category in January this year.
Although the year 2024 ended nearly six months ago, it has yet to disclose its annual financials.
But its first nine months' financials till September 2024 showed that its earnings per share (EPS) declined 89.63% to Tk0.14, while it incurred a loss per share of Tk0.77 in the July-September quarter.
Global Islami Bank's shares soared by 9.67% to Tk3.4 each. Due to failure to hold AGM, its shares are traded on the Z category.
The bank has not disclosed the financials for 2024 yet. Its nine months' financials till September 2024 showed that its EPS declined by 62.60% to Tk0.43.
National Bank's shares price soared by 8.51% to Tk3.8 each. The bank recommended no dividend for 2024 as it incurred huge losses.
Its consolidated loss per share jumped to Tk5.30 for 2024. Regarding the deviation, the bank said that during the year, the bank could not book interest on loan and advances due to non-recovery from defaulters. Furthermore, the bank incurred higher interest expenses on borrowings.
In the first quarter of 2025, it reported a consolidated loss per share of Tk0.69.
First Security Islami Bank's shares soared by 7.89% to Tk4.10 each. Its nine months' financials during the January-September period of 2024 showed that its EPS declined to Tk0.48 mainly due to increased profit rate on deposit and placement from banks and financial institutions, says the lender.
Despite scheduling its board meeting for 2024, it was postponed as it was yet to get permission from Bangladesh Bank to declare dividend and financials.
Social Islami Bank's shares increased by 5.95% to Tk8.9 each. In the first nine months up to September of 2024, its EPS declined to Tk0.15, lower from Tk0.90 in the same time of the previous year.
Exim Bank's shares increased by 3.63% to Tk5.7 each. In the first nine months till September 2024, it incurred a loss. In the January to September period, its loss per share stood at Tk2.77. At the same time of the previous year, EPS was Tk1.58.