Pubali Bank to issue Tk1,500cr bond to strengthen capital base

Pubali Bank has announced its plan to issue a Tk1,500 crore subordinated bond to bolster its capital base, as part of efforts to meet Basel III regulatory requirements.

In a disclosure published on the Dhaka Stock Exchange today, the bank said this will be its fifth subordinated bond, and the proceeds will support the bank's Tier-2 capital under the Bangladesh Bank's Risk-Based Capital Adequacy Guidelines.

The bond issuance is subject to approval from the relevant regulatory authorities and compliance with applicable requirements, the bank added.

Subordinated bonds, primarily issued by banks, dominate the local bond market. These instruments are crucial for strengthening banks' Tier-2 capital within a fixed tenure, helping meet the minimum capital adequacy ratio under Basel III.

Basel III is a global regulatory framework that aims to improve the banking sector's ability to absorb shocks arising from financial and economic stress, by enforcing stronger capital and liquidity standards.

Pubali Bank has previously raised Tk2,350 crore through bond issues over the past six years to enhance its capital structure.

On 29 April, the bank declared a 12.50% cash and a 12.50% stock dividend for the 2024 financial year. The annual general meeting to approve the dividend is scheduled for 18 June, with the record date set for 22 May.

The bank posted a consolidated net profit of Tk780 crore for 2024 – its highest ever – representing a 12% increase from the previous year.

On Monday, Pubali Bank's share price closed at Tk28.30 on the DSE.