Dhaka, Bangladesh (BBN) - Bangladesh’s securities regulator has approved five commercial banks’ proposals for raising capital of their respective subsidiaries, which will help to bring down their capital market over exposures within stipulated limit by July 21, officials said.
The approvals came at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) on Wednesday chaired by its chairman Prof M Khairul Hossian.
The banks’ subsidiaries, which will raise their paid-up capital are: MTB Securities, Southeast Bank Capital Services, Shahjalal Islamic Bank Securities, AB Investment and NBL Securities.
The BSEC approved the proposal of raising a capital worth BDT 1.25 billion by the MTB Securities, a subsidiary of the Mutual Trust Bank.
The company will raise the fund by issuing 125 million shares of BDT 10 each to the existing shareholders.
The paid-up capital of the MTB Securities will stand at BDT 3.25 billion from existing capital of BDT 2.0 billion.
As per the regulatory approval, Southeast Bank Capital Services, a subsidiary of Southeast Bank, will issue 30 million shares of BDT 10 to raise a capital worth BDT 3.0 billion from the existing shareholders.
After enhancement of capital, the paid-up capital of the Southeast Bank Capital Services will reach at BDT 5.5 billion from the existing amount of BDT 3.0 billion.
Shahjalal Islamic Bank Securities, a subsidiary of Shahjalal Islami Bank, will raise a capital of BDT 600 million by issuing 60 million shares of BDT 10 each to existing shareholders. The company’s paid-up capital will stand at BDT 2.74 billion from the existing paid-up capital of BDT 2.14 billion.
AB Investment, a subsidiary of AB Bank, will raise above BDT 3.01 billion by issuing above 301.11 million shares of BDT 10 each. The company’s paid-up capital will stand at BDT 6.0 billion from the existing paid-up capital of above BDT 2.98 billion.
As per the regulatory approval, NBL Securities, a subsidiary of National Bank, will raise a fund worth BDT 3.0 billion by issuing 300 million shares of BDT 10 each.
The company’s paid-up capital will stand at BDT 4.0 billion from the existing paid capital of BDT 1.0 billion.
The central bank of Bangladesh earlier instructed the banks to bring down their overall capital market investments within 25 per cent of their respective total capital by July 21, 2016 in line with the Banking Companies (Amended) Act 2013.
According to the Banking Companies Act 1991 (Amended in 2013), total capital comprises four components: paid-up capital, balance in share premium account, statutory reserve, and retained earnings, as stated in the latest audited financial statements.
While calculating total investment in the capital market different components, including all types of shares, debentures, corporate bonds, mutual fund units, and other securities, will be considered.
BBN/SSR/BB