The board of directors of AB Bank Ltd has decided to issue a subordinated bond worth Tk500 crore, with the objective of bolstering its Tier-2 capital, according to company disclosure.
Tier-2 capital is the second layer of capital that a bank must keep as part of its required reserves.
The bond, titled "AB Bank Subordinated Bonds-V," is pending approval from relevant parties, including the Bangladesh Securities and Exchange Commission (BSEC).
Md Jasim Uddin, company secretary of the bank, has said the management made the decision in the last board meeting. The features and issue manager of the bond are yet to be fixed, he added.
AB Bank Ltd, which entered the capital market in 1983, reported a consolidated profit of Tk36.72 crore from January to June 2023, compared to Tk35.31 crore during the same period in 2022.
Its consolidated net interest income increased to Tk210.61 crore this June from Tk137.30 crore a year earlier.
The bank's consolidated earnings per share reached Tk0.43, with a consolidated net asset value per share of Tk30.06 as of the end of June 2023.
During the period from April to June this year, the bank's net profit after tax was Tk27.01 crore, and its earnings per share stood at Tk31.
Meanwhile, the bank's share price remained stagnant at the floor price of Tk9.70 on the Dhaka Stock Exchange on Thursday.
In terms of ownership, sponsors and directors collectively hold 31.21% of the bank's total shares, the government holds 0.57%, institutions hold 22.81%, foreign investors hold 0.80%, and general investors hold 44.61%.
Since its establishment in 1982 with its first branch at Karwan Bazar, AB Bank has expanded to operate 105 branches, including one overseas branch in Mumbai, India, and a network of over 270 ATMs nationwide.
Additionally, the bank manages five subsidiary companies, including an off-shore banking unit and custodial services, in conjunction with its core banking activities.
The bank opened its representative office in Yangon, Myanmar to extend its foreign operations.