Bangladesh Development Bank to sell 10 lakh ICB shares

Bangladesh Development Bank will sell 10 lakh shares from its holdings in the Investment Corporation of Bangladesh (ICB) within the next 30 days.

As a sponsor and corporate director of ICB, the state-owned lender currently holds 21.94 crore shares, representing a 25.31% stake in the specialised financial institution formed to support the capital market. 

Jashim Uddin, managing director of Bangladesh Development Bank, also serves as a director of ICB as the lender's nominee.

At Tuesday's closing price of Tk69.20 per share on the Dhaka Stock Exchange (DSE), the share sales declared by the Development Bank yesterday would generate approximately Tk6.93 crore for the bank.

According to a senior ICB official, the decision to sell shares likely reflects the Development Bank's need for liquidity rather than any strategy to increase ICB's free-float shares in the stock market.

In September 2021, the Bangladesh Securities and Exchange Commission (BSEC) instructed three large-cap companies – Walton, Berger Paints, and ICB – to ensure a minimum of 10% free-float shares in the market. 

Following an amendment to public issue rules, the BSEC mandated that all companies must offload at least 10% of their shares to the market.

While Walton and Berger Paints are in the process of increasing their free-float shares, ICB has yet to announce any plans to comply with the directive. As of now, only 3.51% of ICB shares are free-float, with the remainder held by sponsors and the government.

According to ICB's shareholding report, the government owns 27%, while Development Bank holds 25.31%, Sonali Bank 7%, Janata Bank 6.68%, Agrani Bank 5.02%, Rupali Bank 4.02%, Pubali Bank 7.51%, Uttara Bank 1.59%, Sadharan Bima Corporation 11.67%, Jiban Bima Corporation 0.68%, other institutions 1.75%, and the public 1.76%.

ICB receives Tk3,000cr low-cost loan

The ICB has received a Tk3,000 crore loan from the government, as disclosed in its price-sensitive statement.

According to the corporation, the loan was approved by the Bangladesh Bank on 27 November following a state guarantee provided by the finance ministry on 13 November. 

The funds aim to enhance ICB's investment capacity in the capital market, support investments, and repay high-interest deposits and loans to help stabilize the market.

Initially, the loan carried an interest rate of 10%, but on 3 December, the rate was reduced to 4% following an application from ICB. ICB confirmed that the approved loan amount was deposited into its bank account on the evening of 12 December.

This financial support is expected to strengthen ICB's ability to contribute to market stability while reducing its financial burden through lower borrowing costs, according to the statement.

Meanwhile, ICB reported that its loss decreased by 68% in the July-September quarter of the current fiscal year.

The corporation's consolidated loss for the period stood at Tk75.28 crore, a significant improvement from Tk236.52 crore during the same period last year, according to its price-sensitive statement filed with the DSE.

At the end of the September quarter, its consolidated loss per share was Tk0.87, compared to Tk2.73 in the same quarter of the previous year.

The company stated that the reduction in losses was due to an increase in capital gains from the sale of securities and an increase in dividend income.