The Board of Directors of Mutual Trust Bank PLC (MTB) has approved a proposal to raise Tk 346 crore (Tk 3,460 million) in Tier-1 capital. This strategic move aims to fortify the bank’s core capital structure and enhance its financial resilience.
The decision was finalized during the board’s 330th meeting held recently. This proposed capital hike represents approximately 32% of the bank’s current paid-up capital. The implementation of the proposal remains subject to approval from relevant regulatory authorities, including the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC).
Strengthening Risk-Based Capital
Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank, emphasized that the decision aligns with the bank’s commitment to maintaining a robust risk-based capital position.
“In light of the evolving economic and regulatory landscape, the board has decided to further strengthen our capital base to ensure long-term stability and growth,” said Mr. Rahman.
Methods of Capital Raising
To meet the target of Tk 346 crore, the bank is exploring several avenues in accordance with BSEC regulations. Potential methods include:
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Rights Shares: Offering new shares to existing shareholders.
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Repeat Public Offering (RPO): Issuing additional shares to the general public.
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Strategic Investment: Partnering with institutional or international investors.
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Other Suitable Instruments: Any other financial tools approved by the regulators.
Financial Context
As of late 2025, Mutual Trust Bank has been focusing on balancing its portfolio, with plans to shift more focus toward SME and retail lending (targeting 40%) to reduce corporate risk. This capital injection is expected to provide the necessary buffer to support these expansion goals while adhering to Basel III capital adequacy requirements.
