SBAC Bank files for Tk100 crore IPO

South Bangla Agriculture and Commerce (SBAC) Bank wants to raise Tk100 crore from the capital market to invest in government bonds.

The private sector lender recently filed an application with the Bangladesh Securities and Exchange Commission (BSEC) for issuing an initial public offering (IPO) under the fixed price method.

SCAB Bank, which was incorporated in February 2013, is going public in order to comply with a regulatory requirement to do so.

"We have decided to raise capital from the stock market to comply with the regulatory requirement," said Tariqul Islam Chowdhury, managing director of the bank.

"We had earlier taken time from the Bangladesh Bank," he added.

As per the rule, "The bank shall issue public shares within three years from the date of commencement of the banking business. Public issues shall at least be equal to sponsors' share amount."

The principal activities of the bank are to provide a comprehensive range of financial services: personal and commercial banking, trade services, cash management, treasury operation, as well as security and custody services.

SCAB Bank Chairman SM Amzad Hossain owns 3.21% of the shares of the financial institution and his wife Begum Sufia Amjad, also a director of the lender, owns 3.36% of the shares.

Both of them are also directors of the listed company Khulna Printing and Packaging Ltd, which is a losing concern of Lockpur Group.

In the first nine months of 2020, the net profit of the bank was Tk64.57 crore, which was Tk66.96 crore in the same period of the previous year.

During the period, its earnings per share stood at Tk0.94, down from Tk0.98 a year ago.

As per the prospectus, the interest income of the bank was Tk463.81 crore and investment income was Tk139.99 crore in the first three quarters of last year.

As of September 2020, the lender's total classified loans stood at Tk331.95 crore, which included 63% bad loans.

The classified loans were 5.77% of the total outstanding loans of the financial institution.

As per the Bangladesh Bank, the ratio of gross nonperforming loans to the total outstanding loans of the banking sector stood at 8.88%.  

The bank's authorised capital is Tk1,000 crore and paid-up capital is Tk684.64 crore.

The lender has been carrying out its business through its 82 branches and six sub-branches all over Bangladesh.

ICB Capital Management is working as the issue manager of the bank.