Standard Bank to issue Tk500cr bond
Bond aimed at raising regulatory capital
Standard Bank, a private sector lender, has decided to raise Tk500 crore through issuing bonds, aiming to enhance its capital base.
According to its price-sensitive statement filed on the Dhaka Stock Exchange (DSE), the floating rate non-convertible mudaraba subordinate bond aimed at raising regulatory capital (tier-2) is expected to help the bank fulfil its Basel-III requirements.
The issuance of the bond is subject to approval from the Bangladesh Securities And Exchange Commission (BSEC) and the Bangladesh Bank.
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Currently, the local bond market is dominated by subordinated bonds, mainly issued by banks. The bonds help lenders construct their mandatory tier-2 capital base through proceeding within a specific tenure.
The Bangladesh Bank is implementing Basel-III in the local banking industry to ensure that banks have adequate capital to avert systemic risk.
Basel-III is an international regulatory accord that introduced a set of reforms designed to mitigate risk within the international banking sector by requiring banks to maintain proper leverage ratios and keep certain levels of reserve capital.
However, following the bond issuance decision, Standard Bank's share price remained unchanged, which stood at Tk6.50.
Earlier, the bank reported a 40% decline in its consolidated earnings per share (EPS) to Tk0.74 in 2024 compared to the previous year of Tk1.24.
The bank has decided not to pay any dividend for its shareholders for 2024.
In the first quarter during the January to March of 2025, the bank has reported 7% growth in its consolidated EPS to Tk0.15.
During the Q1, its consolidated net operating cash flow per share significantly jumped to Tk8.35, which was negative at Tk0.06 in the same time of the previous year.
Regarding the increase, the bank said, its net operating cash flow has significantly increased in comparison with previous year. This is due to a significant increase in deposits, placements from banks, income from investments and shares and securities, along with a significant decrease in operating expenses.
