Rupali Bank to issue 45.33cr shares to govt at Tk15 each
Rupali Bank, the only publicly listed state-owned commercial bank, has decided to issue 45.33 crore shares in favour of the government at Tk15 each — including a Tk5 premium — against share money deposit as per the Financial Reporting Council (FRC)'s directive.
In a disclosure to the Dhaka Stock Exchange (DSE), the bank said it will seek shareholder approval at an extraordinary general meeting (EGM) scheduled for 27 August, with the record date set for 21 July.
Following shareholder approval, the share issuance will require final clearance from the Bangladesh Securities and Exchange Commission (BSEC).
Keep updated, follow The Business Standard's Google news channel
According to the bank source, the government stake will increase to 95% from 90.19%.
Earlier, in March last year, the bank received approval from the finance ministry to issue the shares in favour of the secretary of the finance division.
Mohammed Shahedur Rahman, company secretary of Rupali Bank, told The Business Standard, the government has provided equity support amounting to Tk679.99 crore to the bank over time as share money deposits.
"As per regulations, this equity must be converted to paid-up capital through share issuance. Hence, the board has approved the move to issue shares to the government," he said.
He added that since the funds have already been utilised, the share issuance will only increase the bank's paid-up capital and will not result in any new inflow of funds.
Following the news, Rupali Bank share closed 1.14% lower at Tk17.40 today.
As per the DSE, the bank's current paid-up capital is Tk487.93 crore, after issuing shares it would be Tk941.26 crore, exceeding its authorised capital which is Tk700 crore, which will violate the company rules.
To avoid the non-compliance issue, the bank has a plan to raise the authorised capital to Tk2,500 crore.
In February 2020, the FRC issued a circular mandating the conversion of share money deposits into general shares within six months.
Provision shortfall Tk15,375cr
Rupali Bank has reported a massive provision shortfall of Tk15,375 crore as of 31 December 2024, prompting its board of directors to withhold any dividend declaration for the year.
According to a bank's statement, a sharp decline in profit and failure to meet Bangladesh Bank's provision requirements prompted the decision, as banks can not declare dividends without adequate provisions against loans or after taking deferral facilities.
In 2024, Rupali Bank's consolidated profit after tax fell sharply to Tk11.22 crore, down from Tk62.46 crore in the same period of the previous year.
The bank's annual general meeting (AGM) has been scheduled for 27 August, with the record date set for 15 July.
In the first quarter of 2025 (January-March), the bank reported a consolidated net profit of Tk6.34 crore, significantly down from Tk22.93 crore in the same period of 2024.
At the end of the last year, its non-performing loans soared by 113% to Tk21,357 crore, which was 41.60% of its total disbursed loans.
