Tuesday, May 07, 2024
The merger of Padma Bank and Sharia-based EXIM Bank – which took place through a formal deal signing at the Bangladesh Bank on Monday – has negatively impacted the share price of EXIM Bank.
On Monday, the share price of EXIM Bank decreased by 3 per cent to TK 9.70 compared to Tk 10 posted on the previous day.
It should be noted that the bank’s shares had been witnessing a negative trend since February 29. At that time, the share price of the bank stood at Tk 10.30. Since then, until March 18, the bank’s share price has fallen steadily by around 6 per cent.
This bank has yet to release its December 2023 closing financial statement. As a result, the shareholders have not yet received any dividends for the said period. However, for the year 2022, the bank distributed a 10 per cent cash dividend to its shareholders.
“A Category” holds 32.47 per cent of the total shares of EXIM Bank.
Among the sponsors or directors, institutional investors hold 29.14 per cent of the shares, and general investors hold 37.62 per cent.
According to data available at the Dhaka Stock Exchange (DSE), the last trading price of shares of EXIM Bank – which listed back in 2004 – was Tk 10 each. The bank’s market capitalisation is Tk 1,433 crore, while authorised capital is Tk 2,000 crore.
The bank’s paid-up capital is shown Tk 1,447 crore. In the calendar year of 2023, it earned profit worth Tk 372 crore and gave a 10 per cent dividend to its shareholders in 2022, according to DSE records on the bank's financial health.
EXIM Bank sources said the unconventional bank serves nearly 22 lakh clients with its 151 branches and 70 sub-branches spread across the country.
As of December 2023, according to the Bangladesh Bank, the total volume of bad loans was Tk 1629 crore, which is 3.47 per cent of the entire outstanding of Tk 46,937 crore.
No detailed information about the financial status of Padma Bank, which is not listed in the capital market, is available.
Padma Bank has been providing its banking services to 150,000 clients across the country through its 60 branches and 14 sub-branches and its deposit portfolio stood at Tk 61.86 billion by end of February last.
On Monday, Padma Bank – which has long struggled with bad loans – signed a Memorandum of Understanding (MoU) for a merger with the Shariah-based EXIM Bank.
The entire process of the merger may take three to six months to complete. After the merger, Padma Bank will no longer exist and the bank will continue to operate under the name EXIM Bank. All of Padma Bank’s customers will be transferred to the new EXIM Bank as well.
According to Bangladesh Bank spokesperson and Executive Director Mezbaul Haque, the bank will undergo an audit once the merger is complete, following the Office of the Stock Exchange and Registrar (RJSC) guidelines.
“They will have to get the approval of the Bangladesh Bank to start banking operations anew,” he added.
