Bank Asia has announced plans to issue Tk 8 billion in floating rate subordinated bonds to bolster its regulatory capital. The bank’s board has approved the issuance of seven-year, non-convertible, subordinated bonds, pending approvals from the central bank and capital market regulatory authority.
These subordinated bonds will be sold through private placement and will enhance Bank Asia’s Tier-2 capital. Tier-2 capital, comprising revaluation reserves, hybrid instruments, and subordinated debt, is a supplementary layer of a bank’s capital, less secure than Tier-1 capital.
The issuance aligns with Basel III requirements, aimed at improving global banking regulation and risk management. Bank Asia’s 2023 financial statement reveals existing subordinated bonds worth Tk 7.68 billion. The bank’s profit dropped 23% to Tk 2.48 billion in 2023, with a consistent 15% cash dividend payout.
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