One Bank Limited, a listed private commercial bank, has decided to increase its authorised capital to Tk 500 crore from existing Tk 120 crore to fund business expansion and fulfil regulatory capital requirements.
“If we want to increase our paid up capital as per the central bank's direction, we need to raise our authorised paid up capital first,” said a top official of One Bank.
“Along with this, we also have plans to go for business expansion,” he added.
The move was announced in a statement to the Dhaka Stock Exchange yesterday.
Last year Bangladesh Bank asked all commercial banks to increase their paid up capital to Tk 200 crore.
The news of enhancement of authorised capital pushed the bank's shares up yesterday. Opening at Tk 509, the bank's shares rose as high as Tk 560 before closing at Tk 541.25. A total of 80,750 shares worth Tk 4.36 crore were traded on the DSE.
One Bank's existing paid up capital is Tk 103.90 crore and it needs to add another Tk 96.10 crore in its paid up capital to fulfil the central bank's requirement.
“It's the main reason behind the enhancement of the authorised capital. The increase in paid up capital also helps to improve the Capital Adequacy Ratio of the bank,” the official added.
In 2006, the eight years old private sector bank's net profit after tax was Tk 34.68 crore with earning per share of Tk 39.06.
According to the bank's website, in the financing side, the bank's major concentration is in trade finance covering about 20.88 percent of total financing as on 2006 which is mainly a short-term investment.
While financing the industrial sector, the major concentration of the bank’s leading appeared to be in the textile and the ready made garment sector. both the above sectors cover 30.89 percent of the total portfolio.