Mutual Trust Bank to raise Tk 3.46b in Tier-1 capital

The board of directors of Mutual Trust Bank has approved a proposal to raise Tk 3.46 billion in Tier-1 capital to further strengthen the bank’s core capital base.
The decision was taken at the bank’s recent board meeting, according to a press release issued on Sunday.
The money to be raised is equivalent to 32 per cent of MTB’s current paid-up capital of Tk 10.81 billion.
The proposed Tier-1 capital raise is subject to approval from the relevant regulatory authorities—the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC).
“The move was driven by the need to further strengthen the bank’s risk-based capital position amid a changing economic and regulatory environment,” said Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank.
Tier-1 capital is a bank’s core, highest-quality capital, comprising primarily common equity, disclosed reserves (retained earnings), and non-cumulative perpetual preferred stock, used to absorb losses without requiring the bank to cease trading.
It acts as a primary measure of financial strength and resilience, with a minimum required ratio of 6 per cent relative to risk-weighted assets under the Basel-III standard.
The managing director said the capital may be raised through a rights issue, a repeat public offering (RPO), strategic investment, or any other suitable instrument, in line with BSEC regulations.

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