An application has been filed by the Union Bank with the Bangladesh Securities and Exchange Commission to raise Tk 428 crore from the capital market through an initial public offering (IPO) under the fixed price method.
It filed the application on June 28.
From the amount, the bank will invest Tk 271.5 crore in SME and project finance, Tk 100 crore in government securities, Tk 50 crore in the capital market, and Tk 6.5 crore in meeting IPO expenses.
Prime Bank Investment is working as the issue manager and BRAC EPL Investments as the co-issue manager, of the bank for the IPO.
Incorporated on 7 March 2013, the bank is going public to comply with a regulatory requirement.
The bank’s officials have stated that it will enjoy reduced tax benefits from 40 per cent to 37.5 per cent if it gets listed.
They added that the bank wants to be listed so that they ensure accountability and transparency, have access to the capital market and attract depositors, clients, and potential employees.
According to the rule, the bank shall issue public shares within 3 years from the date of commencement of the banking business. Public issues shall at least be equal to sponsors’ share amount.
The bank follows the principles of sharia banking to provide all kinds of commercial banking services to all types of customers.
During the year which ended on December 31, 2020, its net profit was Tk 98.84 crore, an increase from Tk 59.45 crore in 2019.
Additionally, the earnings per share stood at Tk 1.77, an increase from Tk 1.06 in the previous year.
In line with the company’s prospectus, its investment income was Tk 1,974.01 crore, and operating income Tk 595.91 crore in 2020.
Other than that, its retained earnings were Tk 145.24 crore while the total asset was at Tk 21,003 crore.
Its return on assets and return on equity were 0.51 per cent and 11.23 per cent respectively.
As of March 2021, the bank’s total classified loans stood at Tk 430 crore while the total outstanding loan was Tk 17,654 crore. In addition to that, the number of bad loans was Tk 104 crore.
As per the Bangladesh Bank, the ratio of gross non-performing loans to total outstanding loans in the banking sector stood at 8.48 per cent until March 2021.
Union Bank’s authorised capital is Tk 1,000 crore, and paid-up capital Tk 558.93 crore.
It operates 96 branches, 23 sub-branches, and nine palli bidyut bill collection booths all over Bangladesh.