Regulator rejects NCC Bank's proposal to issue bonds

The stock market regulator rejected the proposal of NCC Bank to issue bonds worth Tk 5 billion.

The decision was made on October 9, according to a filing on Thursday.

The bank decided to issue non-convertible subordinated bonds three years back. In June 2021, it planned to issue bonds worth Tk 7 billion to support its Tier 2 Capital. A year later, it modified its decision and considered issuing non-convertible subordinated bonds worth Tk 5 billion.

The bank said in the filing that it would request the Commission to reconsider the matter.

Subordinated debt is debt that is repaid after senior debtors are repaid in full. It is riskier as compared to unsubordinated debt and is listed as a long-term liability after unsubordinated debt on the balance sheet.

Banks issue subordinated debt for various reasons, including for boosting capital, fund investments in technology, acquisitions or other opportunities, and replacing high-cost capital.

Meanwhile, after the latest disclosure of the company, the share price of the bank closed at Tk 10.70 per share on the Dhaka Stock Exchange on Thursday.

The stock's current price-to-earnings ratio, according to an unaudited financial statement, is 7.99.

The bank's profit fell 13 per cent year-on-year to Tk 2.3 billion in FY23 and declared 12 per cent cash dividends for the year.

In the first six months of FY24, the financial institution's profit amounted to Tk 742 million.

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