Rupali Bank allowed to issue Tk1,200cr bond to lessen capital shortfall
As on 30 September, its classified loans stood at Tk8,728 crore—20.7% of the bank’s total loan disbursed.
The securities regulator, on Thursday, has allowed Rupali Bank Limited—a state-owned publicly traded commercial bank—to raise Tk1,200 crore through issuing a bond to reduce its capital shortfall.
Based on this year's September data, the bank is required to maintain Tk2,354 crore as capital, but it maintained only Tk233 crore. So, there is a shortfall of Tk2,121 crore capital.
As on 30 September, its classified loans stood at Tk8,728 crore—20.7% of the bank's total loan disbursed.
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In May, Rupali Bank sought approval from the BSEC to pay a 2% stock dividend for 2021. But the commission rejected the bank's stock dividend disbursement for the interest of investors.
Rupali Bank's bond will be an unsecured, non-convertible, and fully redeemable floating rate subordinated one. Its coupon rate will be the reference rate plus a 2% coupon margin.
The bank will use this fund to strengthen the Tier-2 capital base under Basel-III requirement.
The unit price of the bond will be Tk1 crore. BRAC EPL Investments Limited, a local investment bank, will act as the bond's trustee, while City Bank Capital Resources Limited, another investment bank, will be the arranger.
The bond will be listed on the alternative trading board of the Dhaka Stock Exchange (DSE).
Earlier, Rupali Bank had secured a no-objection certificate from the Bangladesh Bank to issue this bond to strengthen its regulatory capital base. Its board of directors agreed on the bond's issuance in November 2022.
According to its latest annual report, the bank made a profit of Tk28 crore in 2022 and decided not to pay any dividends to its shareholders.
In the January to September period of 2023, its net interest income stood at negative Tk154.55 crore, which was positive Tk239 crore in the same period of the previous year.
Its net profit stood at Tk43.12 crore at the end of the first nine months of 2023, earnings per share at Tk0.93 and net asset value per share at Tk36.93.
Rupali Bank shares closed at Tk27.70 apiece on the DSE on Thursday.
As of 30 November 2023, the government held 90.19%, institutions 3.85%, and public investors 5.96% shares in the company.
