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AB Bank, a first generation bank, said the market regulator BSEC denied its proposal for issuing rights shares.
Taking the bank’s dividend payout history and present financial position, the Bangladesh Securities and Exchange Commission (BSEC) rejected the proposal, said the company in a filing with the Dhaka Stock Exchange (DSE) on Sunday.
Since 2014, the bank paid stock dividends. It paid cash dividends 5 per cent in 2013, 5 per cent in 2011 and 10 per cent in 2010, according to the DSE.
Its board of directors proposed to issue one rights share against six ordinary shares to strengthen the equity capital, it said.
The bank’s earnings per share (EPS) stood at Tk 0.13 in the third quarter (July-September) of this year, marginally up from Tk 0.11 in the same period a year earlier.
Its consolidated EPS was Tk 0.44, up from Tk 0.28 during the period.
On Sunday, the bank’s share price declined 2.65 per cent to Tk 14.70 on the DSE. Its share price moved between Tk 8.70 to Tk 17.40 over the last one year.
The bank’s market capitalisation is Tk 1,262 crore and its surplus reserve is Tk 1,733 crore.
According to Bangladesh Bank, AB Bank’s classified loan increased from 3.24 per cent to 16.66 per cent in the last five years. Its classified loan stood at Tk 4,568 crore in 2020, which was Tk 666 crore in 2016.
The bad loan accounts for 86 per cent of the classified loan. The amount of bad loan was Tk 3,936 crore last year.
The bank has been suffering from the capital shortfall. At the end of June 30, 2021, its capital shortfall stood at Tk 329.52 crore.
The Bangladesh Bank in a report said AB Bank allegedly laundered around Tk 165 crore to the United Arab Emirates through two shady organisations in the name of investment.
It approved investment of $20 million in Singapore-based fundraising and investment company Pinnacle Global Fund Pte Ltd (PGF) through the bank’s Offshore Banking Unit (OBU) in 2013.
