City Bank Secures Approval for Tk 1,200 Crore Bond

The Bangladesh Securities and Exchange Commission (BSEC) has granted approval for a Tk 1,200 crore subordinated bond issued by the private-sector City Bank. The bond will have a tenure of seven years and is intended to strengthen the bank’s capital base for its corporate, retail, and SME financing operations.

The approval was granted during the 1007th commission meeting of BSEC, held on Tuesday under the chairmanship of Khondkar Rashed Maqsud. At the same meeting, the regulatory body also extended the consent validity periods for bonds issued by Jamuna Bank and Trust Bank. A subsequent press release from BSEC provided detailed information on the approvals.

Bond Features and Structure

According to BSEC, the City Bank bond is unsecured, non-convertible, fully paid-up, fully redeemable, and coupon-bearing. The coupon rate will be set by adding a 3% margin to the prevailing reference (benchmark) rate. The bond will be offered through a private placement targeting institutional investors, banks, corporate entities, individual investors, and mutual funds. The face value of each bond unit is Tk 10 lakh.

City Bank has confirmed that the proceeds from the bond issuance will be deployed to expand its corporate, retail, and SME lending portfolios. EBL Investment Limited will act as the trustee, while City Bank Capital Resources Limited and IDLC Investments Limited will serve as arrangers. The bond will also be listed on the Alternative Trading Board.

City Bank’s Managing Director, Masrur Arefin, commented, “We have a legal capacity to raise approximately Tk 2,000 crore in Tier-2 capital. Currently, we are targeting Tk 1,200 crore from the market. This will boost our capital adequacy ratio above 18%, well above the minimum requirement of 12.5%. Maintaining capital adequacy above 18% is crucial for a rapidly growing bank like ours, particularly to support the anticipated growth in lending over the coming years.”

Extended Bond Consents

BSEC also authorised the extension of bond consents for other banks: Jamuna Bank’s Tk 800 crore bond and Trust Bank’s Tk 500 crore bond now have their validity extended until 30 September 2026. The regulatory body indicated that this extension is the final one following the respective requests.

Summary of City Bank Bond