The board of directors of Dutch-Bangla Bank Limited (DBBL) approved issuance of the 2nd subordinated bond worth Tk 5.0 billion (500 crore), said an official disclosure Thursday.
The bank will issue the bond for increasing the Tier 2 capital to meet the capital requirement under Basel III and strengthen the regulatory capital base of the bank, said the disclosure.
Basel III is a comprehensive set of reform measures developed by the Basel Committee on Banking Supervision to strengthen regulation and supervision and reduce risks of the banking sector globally.
Nature of the bond is unsecured, non-convertible, subordinated and the mode of placement is private with a seven-year tenure.
The board has also decided that any subsequent changes in the features of the bond, if deemed necessary by the bank or required by regulatory authorities, will be placed before the board of directors of the bank for their approval.
However, the bond issuance is subject to the approval of Bangladesh Bank (BB) and the Bangladesh Securities & Exchange Commission (BSEC).
Each share of the bank, which got listed on the Dhaka bourse in 2001, closed at Tk 153.10 on Thursday, gaining 4.07 per cent over the previous day.
The bank's paid-up capital is Tk 2.0 billion and authorised capital is Tk 4.0 billion. The total number of securities is 200 million, according to statistics from the DSE.
The government owns 87 per cent stake in the bank while institutional investors own 4.27 per cent, foreign stakeholders 0.13 per cent and the general public 8.60 per cent as of November 30, 2017.
The bank has reported earnings per share (EPS) of Tk 3.16 for the last July-September period against Tk 2.02 for the same period a year ago.
In nine months from January to September last the EPS was Tk 10.26 as against Tk 7.64 for January-September, 2016.
The bank disbursed 30 per cent cash dividend for the year ended on December 31, 2016. In 2015, the bank disbursed 40 per cent cash dividend.
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