PBIL reimagines the future of investment banking in Bangladesh: CEO

Prime Bank Investment Limited (PBIL), a wholly-owned subsidiary of Prime Bank, is spearheading a mission to democratise access to Bangladesh's capital market. By prioritising inclusive investment opportunities, the institution aims to channel the nation's savings into productive, secure, and rewarding financial instruments, said Syed M Omar Tayub, managing director and CEO of PBIL, in an exclusive conversation with The Business Standard.

He also outlined the company's strategic direction on financial innovation and discipline, robust investment solutions, and the promotion of PrimeInvest as a flagship offering.

"We are not content with being viewed as a conventional merchant bank," said Tayub. "Our goal is to evolve into a comprehensive investment bank that drives capital market development across Bangladesh," said Omar Tayub.

Evolving into a full-spectrum investment bank

PBIL has adopted a multidimensional strategy to reposition itself beyond the traditional scope of margin loans and issue management. 

"We're offering a wide suite of services-from portfolio and equity management to debt issuance, financial advisory, trustee, and underwriting," Tayub explained. "This diversified model sets us apart and enables us to play a catalytic role in deepening the capital market."

Solid capital base and financial resurgence

PBIL's operational strength is underpinned by a paid-up capital of Tk 300 crore, bolstered by the support and credibility of Prime Bank. In 2024, PBIL reported a net profit of Tk11.56 crore on revenues of Tk46 crore, reversing earlier losses it faced in 2020 and proving that merchant banking is a viable, growth-oriented business.

To date, the institution has successfully managed nine equity issues worth around Tk1,000 crore and completed 13 bond issues totalling approximately Tk7,000 crore. Notably, PBIL advised and executed two M&A transactions in 2024-the only firm in Bangladesh to do so that year- earning it global recognition, including the Global Brand Frontier Award 2024 from Boston Brand Research & Media (BBRM), a consultancy affiliated with Harvard, MIT, and Boston University.

Looking ahead, PBIL is preparing to issue the country's first green bond targeted at startups – a pioneering step towards sustainable and inclusive finance.

Risk management and responsible lending

Tayub emphasised the company's internal governance reforms, including the rollout of a self-discipline framework for margin lending. "This has significantly reduced toxic assets on our balance sheet and aligned our risk profile with best practices," he noted.

PrimeInvest: Bringing investment to the masses

At the heart of PBIL's mission lies PrimeInvest-Bangladesh's first integrated investment product. Designed for universal access, it allows students, women, expatriates, and everyday savers to invest small monthly amounts, while also offering bespoke schemes for high-net-worth individuals based on personal financial goals.

"True investment inclusion requires ecosystem collaboration," said Tayub. "While the number of bank and e-commerce users is substantial, BO accounts remain relatively low. We're leveraging Prime Bank's distribution network and building partnerships with other industry players to bridge this gap."

He highlighted rural and semi-urban markets as untapped reservoirs of potential capital. "People at the district level are willing to invest but lack access to regulated financial avenues. This leads many to fall victim to unregulated schemes. Our goal is to offer them safe, transparent investment alternatives."

Advocacy for industry reforms

Tayub pointed out several structural challenges impeding industry growth, starting with the disproportionately high corporate tax of 37.5% on merchant banks, which discourages entrepreneurial interest. "Tax parity with other financial intermediaries like brokerage houses and asset managers is essential."

He also advocated for a score-based regulatory rating framework for merchant banking, akin to the oversight banks receive from Bangladesh Bank through CAMELS rating. "A credible rating system would boost investor confidence and elevate industry standards."

Bridging the credit-equity divide

Tayub underscored the need to rebalance Bangladesh's capital formation model. "In 2024, banks disbursed loans worth nearly Tk1 trillion, while the capital market contributed just around Tk700 crore. This heavy reliance on bank financing through credit must be reduced through enhanced equity and bond-based fundraising."

He proposed tax incentives to encourage equity financing and urged reforms to close legal loopholes that delay loan recoveries. "Short-term liabilities funding long-term assets creates systemic mismatches. By enabling more equity and bond financing, we help financial institutions manage risk better and diversify their balance sheets."

A call for coordinated action

"No single regulator can reshape the investment banking landscape alone," Tayub concluded. "It requires collective action. The Ministry of Finance must lead, supported by regulators such as BSEC, Bangladesh Bank, NBR, and others, working in alignment to develop a vibrant and resilient capital market."