Padma now seeks saviours abroad

Padma Bank has started looking for potential foreign investors, in keeping with its earlier wish to merge with a state lender to prevent its financial health from deteriorating further.
As a part of the move, the lender signed a memorandum of understanding with California-based investment bank DelMorgan & Co on September 2, according to a press release issued by the bank.
Under the deal, the investment bank will search out potential investors to raise $700 million, equivalent to Tk 5,900 crore, in debt and equity capital for Padma Bank.
Ehsan Khasru, managing director of Padma Bank, and Neil Morganbesser, president and chief executive officer of the DelMorgan & Co, inked the agreement representing the two sides.
The signing ceremony was held at the DelMorgan’s head office in the US, said a Padma Bank official.
“We are looking forward to facilitate foreign investments to the opportunity presented by the bank,” said Rob Delgado, chairman of the DelMorgan & Co, in the press release.
Chowdhury Nafeez Sarafat, chairman of Padma Bank, said the bank took an opportunity to enter into an international financial arena under the merger and acquisition (M&A) transactions.
On August 8, the erstwhile Farmers Bank sent a letter to the finance ministry, informing of its intent to merge with any state lender in order to avoid a “potential catastrophe”.
The beleaguered lender requested the government to allow it to get merged with any one of Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank or Bangladesh Development Bank.
This left the management of the state lenders in a state of discomfort.
Top officials of the state banks told The Daily Star last week that merging with Padma Bank would not bring them any good, given the former’s poor financial health.
Contacted, Khasru said the DelMorgan & Co would mobilise $350 million in equity capital and $350 million in debt capital.
He claimed that the financial indicators of default loans, operating loss and loan-deposit ratio of Padma Bank had been showing trends of improvement since the new management took up responsibility.
“The entire investment process will be M&A transaction and hold controlling interest of the investors in the bank,” he said.
Asked whether Padma Bank has backtracked from its earlier intent to merge with a state bank, Khasru said, “The bank will pursue M&A transactions to bring synergy in business and capital growth both locally and globally.”
“The bank is analysing multiple options in the proposed M&A move,” he said, adding that the bank needs new capital to ascertain future business growth.
He said financial health would obviously improve with the new capital as “the right business and investment strategy of the bank is in place”.
“Additionally M&A (with) foreign or local will definitely enhance brand value of the bank,” said Khasru.
In last month’s letter, Padma Bank said it faced a lot of constraints after the start of its new journey, including a severe shortfall of liquidity.
The bank said the Covid-19 pandemic affected credit growth as well as realisation of non-performing loans, causing losses to rise. “As such, our capital is declining noticeably,” read the letter signed by Khasru.
The Covid-19-induced challenges led to operating losses of Tk 120 crore in the first half of 2021. As a result, shareholders’ equity declined to Tk 221 crore, down from Tk 332 crore at the end of last year.
Padma Bank said its capital shortfall would amount to Tk 2,100 crore as of June this year.
Established in 2013 as Farmers Bank, the lender had fallen prey to scamsters.
A Bangladesh Bank investigation found that more than Tk 3,500 crore was siphoned off between 2013 and 2017.
State-owned financial institutions the Investment Corporation of Bangladesh, Sonali Bank, Janata Bank, Agrani Bank and Rupali Bank bought 60 per cent stakes in the bank for Tk 715 crore. The bank then took on the moniker Padma Bank.

-With The Daily Star input

Related News

DHL adjusts Bangladesh price for 2023

Business Desk : DHL Express, the world’s leading international express services provider, announced price adjustments today that will take effect on January 1, 2023. The average increase in Bangladesh will be 7.9 %, compared to 2022. “So far, 2022 has been another turbulent year with a volatile market environment challenging global trade. However, we ... Read more

TVS Motor launches new motorcycle

Business Desk : TVS Motor Company launched a 160cc motorcycle in Bangladesh yesterday bearing an anti-lock braking system J Ekram Hussain, managing director of TVS Auto Bangladesh, unveiled the TVS Apache 160 2V at a programme in Dhaka yesterday, said a press release. Rahul Nayak, vice-president of International Business of TVS Motor Company, Biplob ... Read more

CPA to start construction works of Bay Terminal in 2023

Business Desk : The Chittagong Port Authority on Wednesday informed that they had completed all the preparations, including land acquisition and design, to start the construction works of the Bay Terminal in Chattogram from January 2023. CPA chairman rear admiral M Shahjahan disclosed the information at a press conference at Munshi Fazlur Rahman auditorium ... Read more

Tri-nation firm Gava to invest $25.62m in Dhaka EPZ

Business Desk : Gava Private Limited, a company owned by Hong Kong, Sri Lanka and Switzerland, is going to invest $25.62 million at Dhaka Export Processing Zone (DEPZ) to set up a garment manufacturing industry. The company will produce annually 4.4 million pieces of jackets, fleece jackets, t-shirts, polo shirts, sweaters, trousers, coverall, stretch ... Read more

GP received approval to sell used recycled SIMs

Business Desk : The telecom regulator recently permitted Grameenphone (GP) to sell unused pre-approved old numbers that had been out of service for more than 450 days, a Bangladesh Telecommunication Regulatory Commission (BTRC) official said. Grameenphone has already started selling SIM cards against its suspended unused numbers, following regulatory approval. But, the ban on ... Read more

InterContinental Dhaka wins ‘World Travel Awards’

Business Desk : InterContinental Dhaka has been voted winner of a 29th Annual World Travel Awards 2022 in categories “Bangladesh’s Leading Hotel 2022” and “Bangladesh’s Leading Hotel Suite 2022 – Presidential Suite”. The Asia and Oceania Gala Ceremony 2022 of World Travel Awards was organised in Ho Chi Minh City in Vietnam recently, said ... Read more

Brac Bank, BB hold training for entrepreneurs

Business Desk : Brac Bank conducted a training with technical assistance from Bangladesh Bank for 50 promising entrepreneurs. The “Entrepreneurship Development Programme” was held in two phases at the lender’s head office in Dhaka yesterday, said a press release. The programme is funded by Asian Development Bank and managed by Skills for Employment Investment ... Read more

Samsung launches new locally made models

Business Desk : Samsung Electronics, a South Korean multinational electronics corporation, yesterday launched a new line of televisions in Bangladesh through an event in Dhaka. The latest models that come with cutting-edge technology, smart features and innovative designs are being locally manufactured by two companies, namely Transcom Limited and Fair Electronics. Shahriar Bin Lutfor, ... Read more

Samsung Bangladesh launches new line of televisions

Business Desk : South Korean electronics giant Samsung Electronics today launched a new line of televisions for the Bangladesh market through an event in Dhaka. The latest models that come with cutting-edge technology, smart features and innovative designs are being locally manufactured by two companies, namely Transcom Limited and Fair Electronics. Televisions were once ... Read more

Salman Khan clothing brand to open outlet in Dhaka

Business Desk : The first franchised store of Bollywood superstar Salman Khan’s clothing line ‘Being Human’ will open in Bangladesh tomorrow. The outlet is situated at Banani in Dhaka. Founded in 2012 as an extension of the non-profit foundation established by Bollywood stars, Being Human Clothing currently operates in more than 15 countries and ... Read more

Ananda Shipyard built container ship, delivered to UK buyer

Business Desk : Local shipbuilder Ananda Shipyard & Slipways Ltd yesterday handed over a multi-purpose container ship to its UK buyer. Ananda, the pioneer in the export of ships from Bangladesh, built the ship with over 6,100 deadweight tons tonnage at its Meghna Ghat Shipyard in Sonargaon Upazila of Narayanganj. The ship was manufactured ... Read more

Hong Kong currently one of the top investors in Bangladesh

DCCI President Rizwan Rahman says Business Desk : Hong Kong has risen to the position of one of the top 10 foreign investors in Bangladesh, investing $1.8 billion to date mainly in the textile and energy industries, said Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry, (DCCI). Bangladesh’s trade with the ... Read more

IBBL introduces 5 new products

Business Desk : Islami Bank Bangladesh Ltd (IBBL) launched five new products in Dhaka yesterday. Mohammed Monirul Moula, managing director of IBBL, presented the products at the bank’s headquarters in the capital, according to a press release. Under the Education Savings Scheme, guardians can open a monthly instalment-based account in the name of a ... Read more

BRAC Bank, DSHE to provide Laptop Financing to MPO-listed teachers

Business Desk : Brac Bank signed a memorandum of understanding (MoU) with the Directorate of Secondary and Higher Education (DSHE) in Dhaka recently. Nehal Ahmed, director general of the DSHE, and Selim RF Hussain, managing director of the bank, inked the MoU at the latter’s office, said a press release. Under the deal, teachers ... Read more

Saifullah elected chairman of Standard Bank’s shariah panel

Business Desk : Muhammad Saifullah has been elected chairman of the shariah supervisory committee of Standard Bank at the 363rd meeting of the board recently. He served as a member of the committee for various terms, a press release said. Saifullah is an associate professor of the Asian University of Bangladesh and a member ... Read more

Shine Fashion workers getting dues from Bepza

Business Desk : The Bangladesh Export Processing Zones Authority (Bepza) has started paying due salaries and other benefits to the workers of Shine Fashion Company Ltd, a closed factory at Dhaka Export Processing Zone (DEPZ). DEPZ Executive Director Abdus Sobhan handed over some of the pay orders at an event today, according to a ... Read more

Aziz Khan becomes 42nd richest man in Singapore

Business Desk : Muhammed Aziz Khan, chairman of Summit Group, was named the 42nd richest man in Singapore on the Forbes’ list for 2022. According to Forbes website, his net worth is $1 billion now. He was first named in the Forbes Singapore list in 2018 when his net worth was $910 million. After ... Read more

IFIC launches dedicated banking services for freelancers

Business Desk : IFIC Bank has introduced a special IFIC Freelancer Service Package for freelancers working in Bangladesh to bring their overseas earnings into their bank accounts and to provide them with banking services. The package launch ceremony was organized on (Sunday) September 4 at IFIC Tower, Purana Paltan, Dhaka, according to a press ... Read more

Beza, Fire Department to set up fire stations in economic zones

With this, the fire Service and civil defense will provide full support to Beza to ensure the safety of industrial facilities and property in the economic zones Business Desk : The Bangladesh Economic Zones Authority (Beza) has partnered with the Fire Service and Civil Defense Directorate to set up fire stations and conduct rescue ... Read more

Nagads ED Md Shafayet Alam Receives International Leadership Award

Business Desk : Business Tabloid, a UK-based business publication, named Md Shafayet Alam a Visionary Leader in Digital Finance for presenting strategic, sustainable and visionary initiatives in his relevant field of work. Md Shafayet Alam, executive director of Nagad Limited, has received the award for outstanding leadership in Bangladesh’s financial industry, according to a ... Read more