Midland Bank to go public to raise Tk 70cr from stock market
Midland Bank Ltd plans to go public to strengthen its capital base by raising Tk 70 crore from the stock market.
"It is not that we need the money; we are going to enter the stock market as the fund would help strengthen our foothold in the financial sector," said Md Ahsan-uz Zaman, managing director and chief executive officer of the private commercial lender.
With the proceeds of the initial public offering, the lender will buy government securities and make investments in the stock market that can be liquidated anytime.
Midland Bank started its journey on June 20, 2013, with a corporate slogan of "bank for inclusive growth".
"We want to give our staff ownership benefits, so we will raise Tk 5 crore from them and the rest Tk 65 crore from the stock market," Zaman told The Daily Star yesterday.
When employees have ownership in their company, it motivates them. "We want to practise this culture in our company," he said.
However, many of them might not have the appetite to take the risk of owing shares and so, the facility is voluntary.
The bank will implement these initiatives after receiving approval from the Bangladesh Securities and Exchange Commission (BSEC).
Recently, NRB Commercial Bank has issued shares but is yet to make its trading debut. South Bangla Agricultural Bank also began the process to go public.
Midland Bank saw its customer accounts hit 140,105 in 2019, an increase of about 49 per cent compared to the year before, when it stood at 93,745.
Total deposits reached Tk 3,950 crore in 2019, up from Tk 3,559 crore a year earlier. Loan portfolio rose from Tk 3,107 crore to Tk 3,174 crore.
Midland Bank posted a return on equity of 8.24 per cent that year, according to the lender's 2019 annual report. Paid-up capital was Tk 569 crore.
Last year, the bank saw profits rise 51 per cent year-on-year to Tk 83.5 crore. Earnings per share stood at Tk 0.98 in 2019 and Tk 1.26 a year earlier.
The fourth-generation bank has already obtained approval from the Bangladesh Bank to go public, which is required as per the licensing terms.
The lender appointed LankaBangla Investments as the issue manager and inked an agreement with the merchant bank in this regard at its head office in Gulshan on Monday.
Zaman and Iftekhar Alam, chief executive officer of LankaBangla Investments, signed the agreement.
Now, the issue manager will submit the prospectus to the BSEC to get the nod to raise the funds.
Mohammed Nasir Uddin Chowdhury, managing director of LankaBangla Securities; Md Zahirul Islam, chief financial officer of Midland Bank; Nazmul Ahsan, head of treasury; and Khalid Mohammad Sharif company secretary, were also present at the signing ceremony.
As of 2019, the bank had a total of 33 branches and 37 automated teller machines.
Comments