The board of directors of IFIC Bank has given its nod to issuing a bond worth Tk 500 crore to strengthen its capital base.
However, the issuance of the Tier-2 capital -- expected to help the bank fulfil its Basel-III requirement -- will be subject to approval from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC), said a disclosure yesterday.
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 in hand.
The bank’s shares closed at Tk 12.3 yesterday, down 0.8 per cent from the previous day's trading session.
IFIC Bank was listed on the Dhaka Stock Exchange in 1986.
Its shares traded between Tk 7.8 and Tk 17.9 in the last one year.
The BSEC had previously cancelled the bank's right offer proposal due to its inability to appoint an underwriter.
A rights issue is an invitation to existing shareholders to buy more shares at rates discounted or lower than the market price.
IFIC had been struggling with its fresh right issue plan as the previously bearish market had kept share prices of the company below the face value of Tk 10, which the bank did not anticipate.
In May 2019, the bank's board of directors decided to issue a right share for every existing share at an offer price of Tk 10 each, to raise paid-up capital and meet future capital requirement.
Later in August that year, they revised the ratio to issue one rights share for the existing four shares instead.
On July 30 last year, the company revised the plan for the third time, reducing the ratio of right shares to every five shares.
After the shareholders approved, the bank applied to the BSEC for the right offer approval.
The bank's paid-up capital is currently Tk 1,619 crore.
