United Commercial Bank PLC (UCB) has received approval from the Bangladesh Securities and Exchange Commission (BSEC) to issue rights shares worth Tk7,750 million (775 crore) to enhance its capital strength. The initiative will increase the bank’s paid-up capital from Tk15,500 million to Tk23,250 million. The primary objective of the move is to strengthen the bank’s capital base and enhance its capacity for future business expansion.
Under the approved proposal, existing shareholders will have the opportunity to purchase one new share against every two existing shares. The issue price has been set at Tk10 per share with no premium included, ensuring participation opportunities for current investors. This pricing is considered attractive as UCB’s audited Net Asset Value (NAV) per share stands at Tk27.12.
The rights offer comes as the domestic banking sector faces significant capital shortages. According to the Bangladesh Bank’s Financial Stability Report 2025, the average Capital to Risk-weighted Assets Ratio (CRAR) of the country’s banking sector fell to negative 2.64 per cent at the end of last year. Under international Basel III frameworks, banks are required to maintain a minimum CRAR of 12.50 per cent; currently, nearly two dozen banks in Bangladesh face a combined capital deficit exceeding Tk2.8 trillion.
Funds raised through the offer will be added to UCB’s Common Equity Tier-1 (CET-1) capital, which is viewed as the strongest indicator of a bank’s financial stability. At the end of 2025, UCB’s standalone CRAR stood at 8.42 per cent, below the required 12.50 per cent level. To further support its capital structure, the bank is also proceeding with the issuance of Tk8,000 million in subordinated bonds.
UCB is undertaking this capital enhancement to address challenges including rising non-performing loans (NPLs) and provisioning shortfalls. The bank’s NPL ratio currently stands at 15.50 per cent, with a provisioning shortfall of Tk55,950 million. Despite these pressures, UCB saw its deposits increase by 23 per cent in 2025 to Tk683,940 million.
A stronger capital position is expected to support UCB’s international operations, particularly in maintaining relationships with foreign correspondent banks, and may improve the bank’s credit rating to reduce the cost of raising funds. Furthermore, it is anticipated to enhance the bank’s ability to pay dividends, which are currently restricted by central bank regulations for institutions with high NPLs or provisioning shortfalls.
Commenting on the development, UCB Deputy Managing Director (DMD) Faruk Ahammad said, “The implementation of the rights offer will strengthen the Bank’s capital base, enhance market confidence, and create new opportunities for UCB’s long-term business growth”.
