Seven years into their operations, only NRB Commercial Bank and South Bangla Agriculture and Commerce (SBAC) Bank out of nine banks have shown their interest in getting listed on the stock market.
The NRB recently sought approval from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk120 crore through an initial public offering (IPO).
The nine banks were given licenses in 2013 on condition that they must get listed within three years of their operations.
But the banks, except for NRBC and South Bangla, have repeatedly been taking time from the Bangladesh Bank(BB) to delay their listing.
Meanwhile, SBAC Bank has taken an initiative to list itself on the bourses as part of fulfilling the regulatory requirement.
The other seven banks say they are yet to be prepared to offload shares in the capital market, and have sought further time extensions from the BB.
BSEC officials have said that NRB Bank submitted its draft prospectus, with various documents, to the stock market regulator as well as the Dhaka and Chittagong stock exchanges for getting approval for its IPO.
The bank recently applied to the commission to offload 12 crore shares under the Fixed Price Method.
As per the bank’s IPO prospectus, the IPO proceeds will be used for enhancing the Tier–1 Capital Base of the company proceeds from IPO at an issue price of Tk10 each.
The bank will invest Tk110 crore in government securities, Tk6.05 crore in the secondary stock market and Tk3.9 crore to bear IPO expenses.
According to the draft prospectus, the earnings per share (EPS) of the bank was Tk2.02 in 2019 against Tk1.82 in the previous year. The EPS was Tk0.62 in the January to June 2020 period.
Asian Tiger Capital Partners Investment Limited and AFC Capital Limited are the issue managers of the company.
The Bangladesh Bank in 2013 gave licenses to nine banks on condition that they must be listed at the stock exchanges within three years of commercial operations commencing.
Initiative of SBAC Bank
The SBAC Bank has taken an initiative to raise Tk200 crore from the capital market as part of fulfilling the regulatory requirement.
The bank will go public under the fixed price method subject to approval by the BSEC.
"We have planned to raise capital worth Tk2.0 billion. The IPO (initial public offering) size will depend on the approval of the central bank," said an official at the SBAC Bank.
The SBAC Bank signed an agreement on March 31, 2019 with its issue manager-ICB Capital Management Limited.
Seven other banks seek more time to offload shares
The new seven banks out of nine have sought more time to offload shares. They have applied to the BB for permission to delay their listings.
The defaulting banks are NRB Bank, NRB Global Bank, Midland Bank, Meghna Bank, Modhumoti Bank, Union Bank and Padma Bank Limited.
The banks were allowed three years to get listed with the capital market. The latest deadline expired in December 2019.
Currently, there are 60 scheduled banks in the country, with 30 banks listed on the stock exchange.