BRAC Bank raises Tk700cr through subordinated bond issuance

BRAC Bank has successfully raised Tk700 crore by issuing a subordinated bond to strengthen its capital base in compliance with Basel-III requirements. 

In a press release issued today, the bank stated that the bond will support the bank's capital adequacy requirements, as the bank has earned significant balance sheet growth in recent years.

This incremental capital has set the platform to grow the bank's balance sheet at a higher pace than before. This is also a step forward in developing the bond market in Bangladesh, read the press release.

According to the bank, the bond attracted strong interest from investors, with 663 unique participants, including 567 individuals, subscribing to the long-term instrument. 

"Given that the bond is issued by one of the strongest banks in the country, which holds the highest credit rating from both local and international rating agencies, investors felt confident in making a long-term investment," the release said.

Commenting on the full subscription of the bond, Selim RF Hussain, managing director and CEO, BRAC Bank, said, "BRAC Bank has earned trust and reliability to a level over the years where the investors can trust their money with the bank."

"This full subscription of the bond by diverse groups of individuals and institutions reflects this trust. We would like to thank the investors, regulators, our colleagues and all the stakeholders involved in this success," he added.

BRAC EPL Investments Limited has acted as the lead arranger while the bank's branch distribution, SME team and corporate banking team contributed to closing the subscription in the shortest possible time, according to the release.

Meanwhile, BRAC Bank posted a consolidated net profit of Tk1,010 crore in nine months of 2024. It has yet to disclose the audited financial report for the last year.

According to the un-audited statement for the January-September period of 2024, its consolidated net profit jumped by 74% during the period, compared to the same period last year.

At the end of September, its consolidated earnings per share stood at Tk4.92, which was Tk2.97 a year ago.

The bank, in its price-sensitive statement, said the profits increased mainly from incremental investment income as well as commission and fee income.

According to the financial statement, BRAC Bank's earnings from investments in government securities – known as treasury bonds – soared 262% year-on-year to Tk1,228 crore in the first nine months of this year.

The lender's total income from investment including government securities and capital gains rose to Tk1,965 crore, marking a 112% year-on-year increase.

In the January-September period, BRAC Bank invested Tk26,484 crore in government securities, which is 46% higher than the previous year.

However, its net interest income dropped by 18% year-on-year to Tk1,258 crore during the period due to increased borrowing costs.

Its classified loans stood at Tk1,726 crore at the end of September, which was 8% lower than the previous year, and accounted for only 3% of total disbursements.

Earlier, the bank paid a 10% cash and 10% stock dividend to its shareholders for 2023 — the highest payout in the last six years. During that year, its consolidated net profit was Tk761 crore.