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Abstract:
Inbanking, a merchant bank is a financial institution primarily engaged in offering financial
services and advice to corporations and to wealthy individuals. The term can also be used to
describe the private equity activities of banking. Merchant bank is that a merchant bank
invests its own capital in a client company. Both merchant banks provide fee based corporate
advisory services, including in relation to mergers and acquisitions.
In Bangladesh we have a total number 37 merchant bank. In our country Merchant bank
provides verities of services including Issue management, Underwriting of share, portfolio
management, advisory etc. Through our project we have identified many important aspects of
merchant bank like- The capital market system of Bangladesh, advantages, and challenges
faces by merchant bank. By comparing merchant bank services in Bangladesh with the rest of
world we also have provides some recommendations on merchant bank service in our
country. But our main focus in on performance evaluation of some major merchant Bank in
Bangladesh like- Prime finance, IDLC, Uttora finance, Bey leasing, Lanka bangle, Swadesh,
GSP, Equity financing. Through this analysis we try to identify what services they are
providing, how much they have improved their services than in the previous year and their
position in the capital market.
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Some major activities of Merchant Bank in Bangladesh:
Securities and Exchange Commission (SEC) originates a regulation in 1996 on merchant
banking activities specifically- SEC (Merchant banker and Portfolio Manager) Regulation,
1996. As per regulations, a merchant bank is allowed to perform four types of activities:
Type of Activity Key Features Target Market
Issue
Management
The Issue Management group is
capable of devising innovativesolution for raising capital debt
e.g. placement of bonds and
debentures, and raising equity
through private and public
placement from the market
suiting the unique needs and
constraints of the corporate
clients.
All corporate bodies
Underwriting Underwriting refers to the
guarantee by the
underwriters that in the event ofunder-subscription, the
underwriter will take up the
under-subscribed amount on pro-
rata basis upon payment of price
of that option
All corporate bodies
Portfolio
Management
Merchant banks allow small
investors to open investor
account with merchant banks and
provide support for the purchase
and sales of shares. Clients shall
have absolute discretionary power to make investment
decision.
Individuals,
Professionals, &
Corporate Bodies
Corporate
Advising
Through corporate advising, the
merchant bank helps the issuer
analyses its financing needs and
suggests various ways to raise
needed funds.
All corporate bodies
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The scope of business of a merchant bank has been defined on the basis of its
capital base-
1. Minimum of BDT 2.5 million for issue management
2. Total BDT !0 million for underwriting and issue management
3. Total BDT lO million for portfolio management.
To operate as a full-fledged merchant bank (i.e., issue management,
underwriting, portfolio
management and corporate advising) BDT 20 mi llion is required. Active
participation of
merchant banks is essential in order to accelerate the capital market which
can expedite the
economic growth of the country.
But major problems faced by the companies are the limited scope of business
and high cost of
funds. In order to ensure the sustainability of merchant banks, the scope of
business needs to be .
expanded and diversified, issue expense is another cause of concern for the
merchant bankers
because it may reduce their earning potential since the size of the TPO market
in Bangladesh is
generally much smaller in comparison with that of the other regional
exchanges. If the above 7
mentioned problems can be addressed properly, they would be able toplaya
key role in the
development of the capital market through their market making activities in
both primary and
secondary markets.
Role of merchant banks
The role of merchant banks can be categorized into two broader phases-
1. Primary market making - here Merchant bank performs the role
of adv.smg,
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Administrative services, underwriting, private placement, and banker of
the issue.
2. Secondary market making - here merchant banks play an important
role in the development of the capital market for previously issued
securities providing a number of merchandising services.
Performance of merchant banks
The overall performance of the merchant banks Is not very impressive. Most
of the merchant banks are engaged only on issue management andunderwriting. In case of portfolio management, only three companies are folly
operational in the market. The remaining area, s untouched mainly because of
the limited scope of business in the context of an under-performing capital
market of Bangladesh. This makes some of the merchant banks become
dormant.
Actual picture of Merchant Banking activities in Bangladesh:
In reality, merchant, banksof Bangladesh operates only in three functionalareas, i.e., issue management, underwriting and portfolio management (as
corporate advising being untouched).Of those, the first two are fee-based
business, while the latter one is fund-based. But the cost of fund for merchant
banks is much higher than that of the commercial banks. In a step to make
merchant banks fully operational, SEC recently amended the Securities
and Exchange Commission (merchant banker and portfolio manager) Regulation,
1996 which permits the commercial bankers to conduct the portfolio
management business with their own fund. This -step was taken as an attempt to
help commercial banks to conduct portfolio management more profitably. As a
result, all the three companies that are doing portfolio management are the
commercial banks. Under the limited scope of business it would be very difficult
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for other merchant hanks to operate competitively as the earning potential for
these companies are very restricted.
The Financial Sector and Capital Market of Bangladesh:
The financial sector in Bangladesh comprises the money and capital markets, insurance and
pensions, and microfinance. In addition to the Bangladesh Bankthe central bank of
Bangladesh there are 4 state-owned commercial banks (SCBs), 5 state-owned specialized
banks, 30 domestic private commercial banks (PCBs), 9 foreign commercial banks, and 29
nonbank financial institutions (NBFIs) as of 2008.3 Figure 1 depicts the nature of the
financial sector in Bangladesh.
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The Capital Market:
The capital market is an important ingredient of the financial system, plays a significant role
in the economy of the country. After the share market scam in 1996 a number of regulations
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and policies have been developed to regain the confidence of the investors. Government
participants play an important role in the overall functioning of the market.
Regulatory bodies of the capital market:
The Securities and Exchange Commission exercises power under the Securities and
Exchange Commission act 1993. It regulates institutions engaged in capital market activities.
Bangladesh Bank exercises powers under the Financial Institutions Act 1993 and regulates
institutions engaged in financing activities including leasing companies and venture capital
companies.
Further to the regulations the following regulations also cover the capital market operation:
1. Dhaka stock exchange Automated Trading Regulation,1999
2. Dhaka stock Exchange Investors protection fund Regulations, 1999
3. The listing Regulation of the Dhaka Stock Exchange Limited
4. SEC Margin Rules,1999
5. DSE Settlement of Stock Exchange Transaction Regulation, 1998
6. Dhaka Stock Exchange ( Members Margin) Regulation,2000
7. SEC Corporate Governance Guidelines,2006
Activities in the capital market:
Activities in the capital market can be classified as follows:
1. Primary market activities
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Securities are issued in the primary market by one or more of the following methods:
a) Public Issue
b) Private placement
c) Right issue
d) Offer for sale
2. Settlement and securities administration:
a) Settlement: The Chittagong and Dhaka Stock Exchanges each have their own
automated trading system. The clearance system has daily netting facilities. The
settlement system allows for early settlement of securities and funds. Failed trades are
squared up by the stock exchanges and members are penalized for such failed trades.
b) Collection: Dividends on shares are usually paid to the holders annually. Interest on
debentures in paid semi-annually. Payments are made by banks cheques. The benefit
of the share/debenture goes to the person whose name is on register during a pre-
declared book closure period. Interest calculations are based on the normal calendar
year.
c) Capital changes and recognition : In case of right issues, existing shareholders are
required to accept or renounce the shares within a specific time period. On the other
hand, in case of bonus issues, share holders receive the share certificates by mail.
Bonus shares are issued within 60 days of reopening of share transfer register.
The recent development of Capital Market:
The role of capital market in financing private investment remained at a nascent stage in the
context of Bangladesh. Banks and financial institutions disbursed BDT 96.5 billion as
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industrial term loans during FY06, whereas only BDT 1.7 billion was raised in the capital
market through private placements and public offerings (BB Annual Report FY06). As of
December, 2006 a total of 310 securities were listed at DSE comprising 255 companies, 13
mutual funds, 8 debentures and 34 treasury bonds as opposed to a total of 249 securities
comprising 230 companies, 10 mutual funds and 9 debentures as of December 2001. Thus
during the last five years only 54 new companies got listed in the DSE of which only three
were listed by direct listing route, and the rest were listed by public offering. Total market
capitalization of all listed securities in DSE, however, increased substantially (by around 130
percent) in 2004 to BDT 224.9 billion. At the end of December '06 it stood at BDT 323.4
billion. DSE market capitalization as share of GDP fell to 5.41 in June '06 from 6.06 in June
'05.
Common Services Offered by Merchant Banks In Bangladesh
Issue Management
Issue management function of merchant banking helps capital market to increase the supply of
securities. The Securities and Exchange Commission stipulates that issuer must float the shares /
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debentures through a separate institution licensed by them (SEC) as issue manager or merchant
banker. Merchant Banks shall act as issue managers for the issuer companies which have good
institutional base, corporate structure and discipline. In the area of issue management the Bank will
also arrange placement prior to IPO
AAA Consultants
Ltd.
16%
Euity Partners Ltd.
16%
Sawdesh
Investment Ltd.
13%
ICB Capital
Management Ltd.
12%
Prime Finance andInvestment Ltd.
9%
Capital Market
Service
7%
First Securities
Ltd.
5%
IDLC Finance
Ltd.
4%Others.
18%
Amount of Total IPOs
Underwriting Operation
Underwriting operation in one of the important functions of a Merchant Banker by which it can
increase supply of stock/shares and debentures in the market. It is an arrangement whereby the
underwriter undertakes to subscribe the unsubscribed portion of shares/ debentures offered by any
public limited company. This encourages the prospective issuers to offer shares/debentures to the
public for subscription and they can raise fund from the public for implementation of their industrial
undertakings.
In undertaking public issue of shares and debentures the Merchant Banks evaluate the proposal
covering the following areas:
1. Whether the cost of the project has been estimated properly?
2. Whether the management capability of the sponsors is up to the mark?
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3. Whether the management capability of the sponsors is up to the mark?
4. Whether the project is technically feasible?
5. Whether the products/to be produced/ serviced by the project will have due share in the local
and overseas market?
6. Whether the sponsors are credit worthy?
7. Whether the project is financially viable and rewarding and is able to pay good dividend to
the shareholders who would invest in its share?
For underwriting, Banks are charging underwriting commission, which may range between 0.50% to
2.50% of the amount of public issue. The will, however, charges project examination at a
determinable rate will be charged on the issuer.
The following conditions may-be applied while considering underwriting proposal:
1) Merchant Banking Division should not underwrite alone the whole issue.
2) Merchant Banking Division single commitment should not more than 20% of outstandingunderwriting commitment during the year.
3) Merchant Banking Division should not underwrite the issue of companies having Debt/Equity
ration of more than 60/40 and Debt Coverage Ratio with less than 2.
4) Merchant Banking Division should not underwrite right issues of Bank defaulted companies
or companies under category of Z.
Portfolio Management
The two broad function outlined above are from the supply side of capital market. A merchant banker
has also the responsibility of creation demand for securities. Through portfolio management this task
can be accomplished. In the area of portfolio management merchant banka want to manage
investment portfolio of the customers through introduction and of Investors accounts of the following
three types:
a) Clients Discretionary Investment Account (CDI): This type of account will be allowed to
be opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 1,00,000 against which the Bank will provide credit facility in the ratio of 1:1 carrying profit
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rate ranging from 12.50% to 12.00% p.a. subject to change by the Management of the Bank
time to time. In this case Tk. 5,000.00 will be kept as retention amount. If the margin falls
25% or below the Bank shall have the right to recover the outstanding by selling the shares
held in the account without notifying the account holder(s).
b) Bank Discretionary Investment Account (BDI): This types of accounts will be allowed to
be opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 1,
00,000 against which the Bank will provide credit facility in the ratio 1:1 carrying profit
ranging from 13% to 13.50% p.a. (quarterly rest) subject to change by the Management of the
Bank time to time. The maximum limit of credit facility under this type of account will be Tk.
10.00 lac for individual investors and Tk. 50.00 lac for institutional investors.
c) Profit and Loss Sharing Account (PLS): This types of accounts will be allowed to be
opened by adult Bangladeshi and Wage Earners with minimum initial deposit of Tk. 5, 00,000
providing equal amount of deposit by the Bank i. e. at the ratio of 1:1. The profit/loss
earned /incurred will be equally shared by the investor and the Bank. Exclusively the Bank at
its discretion will design the portfolio. This is again a continuous and revolving Account. The
Bank shall also act as Portfolio Managers for Institutional investors who are approved to have
a portfolio Managers for Institutional investors who are approved to have a portfolio of
securities by the charter/Memorandum of Association. In this case the minimum amount of
deposit would be Tk. 10.00 lac providing equal amount of deposit by the Bank i.e. at the ratio
1: 1. The maximum Banks investment under this Account shall not exceed Tk.25.00 lac. The
PLS Account holder shall have to maintain 50% margin in the Account.If the margin falls to
25% below the Bank shall have the right to recover the out ding by selling the shares held in
the Account without notifying the account holder (s).
Criteria for opening Investment Account under Portfolio Management Services:
i. Individual Resident Bangladeshi:
The accountant. holder shall be an adult Bangladeshi having attained maturity and be eligible to enter
into a contract. The following particulars/papers/documents are to be obtained and looked into for
allowing him to open Investors Scheme Account:
a) Genuineness of official/business. residential address and permanent address is to be verified
b) Copy of Passport/ Voter ID Card, If applicable.
c) Monthly income indicating source of income
d) Transaction Profile
e) 3 copies of Passport size photograph attested by gazetted officer or a bank official not below
the rank of AVP/AGM
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f) Name of nominee with particulars, passport size photograph and signature.
g) TIN Certificate, if any.
ii. Wage Earners/Non-resident Bangladeshi:
For allowing wage earner or non-resident Bangladeshi to open an account the following particulars/documents are to be obtained:
a) Name of city and country where he is working
b) Copy of contract of employment
c) Copy of Passport with Valid Visa
d) Monthly salary in BDT
e) Name of Bank with Branch through which remittance of fund to be made available for
investment
f) Investment Objective:
1. Long-term for capital gains and dividend income
2. Intermediate term
3. short-term for trading
g) Mode of repayment of loan.
h) Name and address of nominee with relationship passport size photograph and signature.
i) Residential and permanent address of account holder
j) Transaction Profile
Criteria for Credit Facility and Investment under Investors Scheme Account:
For allowing credit facility for investment diversification policy shall have to be followed:
a. In case the loan amount is within Tk. 15 lac at least 3 selective stocks of different are to be
for investment.
b. In case loan amount exceeds Tk. 15 lac at least 5 selective of different companies are to be
taken for investment.
Only those securities are to be taken for investment under investor accounts fund of the Bank. Which
are approved by EC/Board?
The credit facilities shall be allowed in compliance with the following Criteria:
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a. 50% of credit facility may be allowed for investment in securities on the basis of NAV or
Book Value.
b. 50% of credit facility may be considered when Price Earning Ratio (PER) is within 10 or
lower, i. e. deposit credit ratio 1:1.
c. For securities having PER ranging between 15.01-20, 25% of facility may be allowed, i.e.
deposit credit ratio shall be 1:1.
d. For securities having PER ranging between 15.01-25% of credit facility shall be allowed, i.e.
deposit-credit ratio shall be 4:1.
e. No credit facility shall be allowed for securities having PER exceeding 20.
f. Securities of A categories shall be considered for allowing credit facilities,
g. For securities primary market credit facility may be considered to the extent of 50% as per
management decision.
h. In case of IPO application if an investor want to invest in balk amount we may consider it if
the management desire.
i. Credit facility under investors account shall be of revolving in nature. The loan may also be
recovered or repaid through sale of securities.
j. The term of credit facility may be renewed on the basis of satisfactory performance of the
account.
Margin Requirements
For investors account margin shall be 50% That is accountholders to total investment in securities
on account shall be 50% i.e. deposit ratio will be 50:50. Margin shall be calculated applying the
following formula:
{(Account holders Contribution- (Retention Money + Documentation fees)}*2
Margin maintenance
50% margin is to be maintained in structuring the portfolio of investment in securities of primary or
secondary market. In case the margin falls to 35% below the accountholders shall be asked to raise the
margin to 50% by way of injecting fresh fund in the account or by sale of securities.
Sale of securities by the Bank
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In case the margin falls to 25% the Bank shall sell the securities without without prior not to the
account holder to raise the margin to 50%.
Withdrawal of Fund
In this case the fund will be deposited/withdrawal
a. Withdrawal of fund may be allowed when there is credit balance in account keeping the
retention money.
b. Withdrawal of fund may be allowed to the extent, which is in excess of margin requirement.
That is, if the margin is 60% in an account the accountholder may be allowed to withdrawal of
fund to the extent of 10% of the total investment.
Documentation Standards
The following charge document are to be executed by the accountholders:
a) D. P. Not having revenue stamp worth of Tk. 20.
b) Letter of Agreement
c) Letter of Pledge with Supplementary Agreement
d) Letter of Authority for sale of securities
e) Letter of Continuity
f) Letter of Revivalg) Letter of Guarantee
h) Deed of Agreement for management of portfolio
i) Mandate/ Power of Attorney for purchase sale of securities.
Fees and Charges and Income:
a) Rate of Profit on Investment ranging from 12.50% to 13.00% p.a. with quarterly rests
b) Brokerage- 0.40% of Brokerage to be charged
c) Documentation Fees- Tk. 500 per Account (at the opening of the Account).
d) Portfolio Management Fees @ 1% p.a. on total portfolio.
Performance Evaluation of Some Major Merchant banks in
Bangladesh:
LankaBangla
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Merchant Banking Services
LankaBangla Finance Limited provides merchant banking services in the following areas:
Issue-Management LankaBangla provides such services to an issuer company which includes
inter alias regulatory compliance, placement arrangement, underwriting arrangement, post
issue service, distribution, etc.
Underwriting
LankaBangla by providing underwriting service offers comfort to the issuing company. Apart
from acting as underwriter to public issue, we also act as the Arranger of Underwriting.
Merger, Amalgamation and Private Placement
Lanka Bangla recognizes that the merger of two companies may represent the culmination of
years of effort by their owners and management. We guide shareholders and management
teams through the merger and acquisition process to maximize value and minimize disruption
to the business.
Portfolio-Management
LankaBanglas Portfolio Management service is designed to provide personalized, secure and
simple financial solutions for a wide variety of investors who wish to enhance their
opportunities while minimizing their administrative burden.
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Business Overview and Profit Growth
Bangladesh stock market has performed very well throughout the year 2008 promising
encouraging future ahead. Bull beating bear
for excess demand over shortage of supply of good securities was observed in the market.
Market capitalization at the end of
December 2008 was BDT 10 billion which is 15.88 percent of GDP while it was 7.59 percent
in 2007.
In 2008, our Company registered a tremendous business growth with leading market share in
terms of turnover in both the bourses. It
has consistently secured the top position in terms of turnover in the Dhaka Stock Exchange
and Chittagong Stock Exchange over the
last few years. The operating results and the performance graph are shown below:
Market Share of LankaBangla Securities in DSE & CSE
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Sawdesh Investment Ltd.
As a full-service investment bank, SIML offers public issue management, portfolio
management, merger & acquisition, joint venture, corporate finance advice, securities
dealing, research and underwriting capabilities in the financial markets of Bangladesh.
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SIML goal is to help you meet your agreed objectives, taking into account such factors as
capital growth, cash flow and security.
Under SIML Portfolio Management services as a client you retain full discretion over all
financial decisions while we administer and manage all investment documentation, collect
investment income, act as custodian for your assets (but without physical control), provide a
dedicated Client Service Officer, issue quarterly statements and last of all we provide loan
facilities to our portfolio account holder at a very competitive rate.
Trust Bank Ltd.
Merchant Banking Activities
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The Bank also carries out merchant banking activities under the license issued by the
Securities & Exchange Commission (SEC), Dhaka, Bangladesh. The overall increase of
activities of Merchant Banking Operations plays an important role in the improvement of
capital market of the country and enhances earning capability of the Banks. Trust Bank
Limited carries out Merchant Banking Operations under the license issued by the Securities
and Exchange Commission (SEC), Bangladesh. Merchant Banking Division (MBD) is
actively managed the portfolio of the customers by selling and buying of shares for them
through different brokerage houses. It also allows margin loan facility to the customers
against their equity for investment in the listed companies. MBD is also managing Banks
own portfolio through investing in listed shares for boosting up the profitability of the Bank
and also enhancing shareholders value. MBDs contribution to total operating profit of the
Bank was significant in the year 2009. We have a plan to form a wholly owned subsidiary
company for running the Merchant Banking Activities very soon. A Separate set of balance
sheet an d income statement of our Merchant Banking Division are shown in Annexure D &
E respectively.
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AB Bank Ltd.
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Background of AB Bank Limited AB Bank Limited, the first private sector bank was incorporated in
Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started its operation with
effect from April 12, 1982.
In spite of adverse market conditions, AB Bank Limited which turned 28 this year, concluded the
2008 financial year with good results. The Banks consolidated profit after taxes amounted to Taka
230 cr which is 21% higher than that of 2007. The asset base of AB grew by 32% from 2007 to stand
at over Tk 8,400 cr as at the end of 2008.
The Bank showed strong growth in loans and deposits. Deposit of the Bank rose by Tk. 1518 cr ie.,
28.45% while the diversified Loan Portfolio grew by over 30% during the year and recorded a Tk
1579 cr increase. Foreign Trade Business handled was Tk 9,898 cr indicating a growth of over 40% in
2008.
Capital Market
Bangladesh capital market is still quite small in terms of size compared to countries like India orPakistan. Present market capitalization accounts for roughly 6 percent of the GDP. During the first
half of the year 2006, liquidity crises had its affect in the market and towards the end of the year, the
market had to weather unstable and volatile political situation.
Brokerage Service
Introduction:
AB Securities Limited (ABSL) is a subsidiary company of AB Bank Limited having holding
99.60% shares of the ABSL. ABSL started its new journey on 2nd August, 2010 with
improved customer service, highly skilled professionals and state of art technologies.Memberships of both Dhaka Stock Exchange Limited and Chittagong Stock Exchange
Limited has been transferred in name of ABSL to provide more efficient and professional
broking services to the capital market investors.
Services of ABSL:
AB Securities Limited (ABSL) is one of the countrys leading securities broker houses of
Dhaka Stock Exchange and Chittagong Stock Exchange..
Services:
1. Brokerage Services, Margin Loan Facilities, Stock Dealer Service, CDBL
Services as full service Depository Participant (DP):
AB Investment Limited (ABIL)
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AB Investment Limited, a subsidiary of AB Bank Limited incorporated under the
companies act 1994 and running its Merchant Banking operations being licensed by the
securities and exchange commission.
Sector Wise LDOs position as on December 30, 2008
Figure in '000'
Industrial sectorSIC
CodeLimit % Outstanding % A/C
Trading 1000 15,064,919 25% 12,130,869 25% 3323
Agriculture 2000 6,444,920 11% 5,477,990 11% 393
Manufacturing 3000 23,816,061 40% 18,695,354 38% 1491
Services 4000 6,427,150 11% 5,376,696 11% 235
Contractual Works 5000 1,693,475 3% 1,108,986 2% 227
Energy & Mining 6000 1,016,647 2% 945,776 2% 51
Others 7000 393,408 1% 350,843 1% 42
100% Secured Loan 8000 2,633,006 4% 2,098,487 4% 1118Special Scheme
Loans9000 2,095,618 4% 2,730,863 6% 174
59,585,204 100% 48,915,864 100% 7054
Equity Partners Ltd.
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BRAC EPL: BRAC EPL Investments Limited (BRAC EPL) formally commenced operation under
a new management team on October 1, 2009. The predecessor of the company, known as Equity
Partners Limited (EPL), was formed in early 2000 as a merchant bank licensed by the Securities and
Exchange Commission of Bangladesh. BRAC Bank Limited acquired 51% of its equity in August of
2009.
BRAC Bank Limited is one of the fastest growing banks in Bangladesh. A member of BRAC
Enterprises, the Bank operates under a "double bottom line" agenda where profit and social
responsibility go together as it strives towards a poverty-free, enlightened Bangladesh.
Principal Activities
Investment banking
Issue Management & Underwriting of Public Offering
They provide issue management and underwriting services for:
Initial Public Offering (IPO),
Repeat Public Offering (RPO),
Rights Issue,
Direct Listing, et.
Our issue management services include/ cover:
Capital Restructuring, Structuring the size of the public offer,
Determine issue price,
Valuation of the Issuer Company using various techniques of financial modeling,
Ensure compliance with the regulatory authorities,
Liaising with the regulatory authorities on all issues regarding the public offer,
Arranging the underwriting syndication
Structured Finance and Corporate Advisory:
Our wide range of advisory services in this domain includes:
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Advising corporations, institutions and sovereign entities on the structure of new debt
issues and the refinancing of existing obligations
Advising on debt market opportunities and conditions
Arming our clients for negotiations with bankers and investors
Sharing our knowledge of the range of potential financiers, their appetite and their
attitude to credit, pricing and structure We have the expertise to raise debt and quasi equity through:
Preference shares
Loan syndication
Corporate bonds
Redeemable bonds
Convertibles and equity linked products
Asset-backed securitization
Private Equity:provide the following services in this regard-
Formulating business plans Conducting due diligence
Attracting and selecting investors
Providing legal and institutional support
Debt restructuring
Creating project documents
Mergers & Acquisitions: BRAC EPL acts as an intermediary for Bangladeshi/offshore
investment and joint-venture transactions, aligning the goals of those who seek and provide
investment and joint-venture opportunities in Bangladesh.
Portfolio management
"Cap Edge" Non-Discretionary Portfolio Account: Cap Edge is a dynamic investment
account that provides investors with the entire range of non-discretionary portfolio
management services including:
Minimum balance requirement to start Portfolio Investment Account.
Efficient execution of trades.
Extension of margin loan enabling the investors to earn enhanced return.
Collecting dividend and bonus shares on behalf of clients.
Subscription of the rights issues.
Completion of dematerialization process.
Keeping the securities in safe custody.
GSP Finance
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GSP Finance Company (Bangladesh) Limited a NON-BANKFINANCIALINSTITUTION incorporated
in Bangladesh on 29 October 1995 as a public limited company under the COMPANIESACT 1994.
It also received licence from SECURITIESANDEXCHANGECOMMISSION on 24 August 1999 for
working as a merchant banker. Five foreign sponsors hold 74.97% of its shares and the rest is
held by domestic sponsors. The company was established with an authorised and a paid up
capital of Tk 1,000 million and Tk 150 million respectively. The paid up capital in December
2009 was Tk 226 million.
Principal activities
Credit and Marketing: The principal focus of the company is on the business of lease financing ofcapital goods for industries such as plant, machinery and equipment, medical equipment, power
generation etc.
Merchant Banking : Under its unit their principal focus in on financing Capital Market such as
Mutual funds, Bridging loans, Underwriting, Issue management, Pre-IPO placement, Portfolio
management and Investments in Share, Bonds and Debenture.
Money Market Operations: The company also engaged in Money Market activities primarily in
connection with its lending/funding operations.
Other Financial Market Operations: The company also engaged in Lease Finance, Term Loan, BridgeFinance, Loan Against Fixed Deposit, Loan Against Property, Loan Against Securities, Bill
Discounting, Share Investment Service and also in Syndication and Club Financing.
Growth in Shareholders Equity: There has been a enormous growth in shareholders equity. On 31
December 2009, shareholders equity stood at TK. 632.29 million.
Growth in Total Assets: On 31 December 2009, total assets stood at TK. 2829.71 million
Growth in Lease Finance: As of 31 December 2009, the amount of lease finance stood at TH. 1883.04
million.
Sectorwise allocation of Total Lease Assets 2009
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Uttara Finance and Investment
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Uttara Finance and Investment Limited a joint venture leasing and financing company
registered as a NON-BANKFINANCIALINSTITUTIONS under the Financial Institution Act 1993 and the
COMPANIESACT 1994. It commenced business on 1 November 1995 with an authorised capital
of Tk 250 million divided in to shares of Tk 100 each. The paid up capital of the company is
Tk 120 million. Of the total share capital, 25% is held by Bangladeshi sponsors, 20.83% by
foreign sponsors (Singaporean), 14.10% by the INVESTMENTCORPORATIONOFBANGLADESH, 0.09%
by its employees and 39.98% by the general public. The company is listed with both
Chittagong and Dhaka Stock Exchanges.
Main areas of business operations of the company are related to leasing for providing benefits
of asset-based lease facilities. The company signed business contracts on lease and term
finance for Tk 423.44 million in 2000. Of the total contracts processed, those for Tk 383.71
million were executed. Up to 31 December 2000, total amount of net leased assets and net
term finance of the company stood at Tk 624.14 million. Assets of the company comprised
leased assets, term finance, investment in shares, and other current assets. The company
earned a net profit of Tk 33.99 million in 2000.
Principal Activities
General
Uttara Finance maintains an as and when decision making policy in both securing and
investing fund, basing on over-all micro and macro socio-economic-political scenario.
Lease : Uttara Finance extends Finance Lease facility to acquire capital assets to any sector
preferably to on going concerns.
Loans : Uttara Finance extends short to mid Term Loans in following lines: Working
Capital Loan, Bridge Finance, Personal loan, Home Loan
Small and Medium Enterprises : Uttara Finance extends this facility to enterprises asdefined by Bangladesh Bank from time to time.
Deposit schemes : Uttara Finance offers competitive rate of interest to individuals for tenure
of 12 months to 36 months and to and corporate business houses for tenure of 6 months to 36
months.
Merchant Banking Unit
Uttara Finance offers full range of asset management services like Underwriting; Portfolio
management; Bridge Finance; mutual fund; Individual investor's accounts in capital market.
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Zero Down Payment Scheme: The scheme has been introduced to assist individuals and
business concerns to facilitate acquiring of vehicles.
Profit and Loss Statement of Merchant Banking Operations
Prime Finance
Prime Finance has decades of experience in capital market operations. Our services to clientsin capital market operation are divided into four key areas: Public issue of shares,
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underwriting, portfolio management and corporate advisory services. Prime Finance provides
a broad range of services to the corporate clients supporting them in raising long term funds
from capital market. We provide consultancy services in designing capital structure ranging
from conversion of company into a public limited one to listing with stock exchanges.
Public Issue of shares:We assist corporate clients in meeting their financial needs and advising them on the most
advantageous means of raising capital. We manage or co-manage public offerings of shares
or arrange private placement of shares with institutional or individual investors. In addition,
we provide consulting services, including mergers and acquisitions and advising clients with
respect to financing plans and related matters.
Underwriting:
Underwriting services is another product of Merchant Banking Operation. During 2009,
Prime
Finance entered into agreements with 12 companies for underwriting of their shares for total
amount of Tk. 385.02 million. Participation in underwriting can expose us to financial risk
since the possibility exists that the securities we have committed to take up may not be fully
subscribed at the initial public offerings.
Private placement:
Prime Finance & Investment Limited arranges private placement of debt and equity securities
for the companies seeking a broad range of corporate finance alternatives. Through our
relationship with institutional and private investors, Prime Finance has developed an
outstanding private placement track record to help our clients expand their existing projects
or set up new projects. With a reputation for superior service and results in private capitalraising, Prime Finance &
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Investment Limited has broad experience in placement of:
Debt instrument
Convertible and
equity-linked securities Private equity
Portfolio management:
Own portfolio:Our investment in capital market performed well.In the second half of
the year, the stock Exchangewent up significantly. This rise was due to anumber of
factors. In 2009 total income from investment in capital market was Tk. 480.15
million made up as under: Capital gain from sale of share: Tk. 465.88 million
Dividend income: Tk. 14.27 million
Investors' portfolio: Prime Finance manages investors' portfolio of its 706 clients
worth Tk. 4.11 billion. Prime Financeprovides margin loan to its clients as per policy
and within the framework of regulatory authority, the Securities and Exchange
Commission. During theyear 2009 Prime Finance earned a total Tk. 196.98million
as interest on margin loan and a Tk 34.19 million as fee from managing investors'
portfolio.
Margin loan: Prime Finance provides margin loan to its portfolio investors for
investment in the listedsecurities against their equity. The Company'srevenues from
portfolio clients include interest on margin loan, portfolio management fees and
annual charges.
Corporate financial services:Prime Finance offers an extensive range ofprofessional
corporate financial services. We specialize in tailor-made, value-added solutions,which are particularly suited to small and midsizedcompanies. We serve our clients
in theirbest interest, creating value for them andcompliment their business expertise
with our own,to maximize their opportunities for growth.
Advisory services:
Corporate counseling services are provided in the form of customized solutions for better
corporate performance in terms of prolonged existence and steady growth. Project counseling
services include systematic development of an idea into a plan, development of a financialstructure and preparing project feasibility report.
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IDLC Finance Ltd
IDLC Finance: Industrial development Leasing Company of Bangladesh (IDLC) amultinational joint venture public limited company and the first leasing and multi-product
non- bank financial institution in Bangladesh. It became a listed company in Dhaka stock
Exchange on 20 March 1993 and in the Chittagong stock exchange on 25 November 1996.
IDLC started to accept deposits after receiving the license from BANGLADESH Bank on 10
September 1994.
Issue management:
The Issue Management Team is capable of devising innovative solution for raising capital -
debt and equity - from the market suiting the unique needs and constraints of the corporateclients. Issue Management services of Merchant Banking Division include Public Issue
Management of Initial Public Offering, Repeat Public Offering, Bond Issuance, Rights Share
Offering, Corporate Advisory Service in various matters. The team is staffed with some of
the most qualified, experienced and innovative personnel in the sector to offer corporate
clients the best solution in terms of managing public offers.
Under writing:
Scope of Work as Underwriter
Review valuation of the company to justify issue price
Review previous audited and current management accounts
Company's business appraisal and due diligence visits
Meeting with top management of the Company
Analyzing Financial Ratios and other indicators
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From the above charts we can easily identified that, Underwriting has increased than the year
2008.
Advisory service:
The Structured Finance Department offers a range of advisory services to our corporate
clients to meet their specific requirements. Our Fund Raising and Advisory Services can also
complement each other in satisfying the unique needs of our clients. We offer Advisory
Services for:
1. Merger and acquisition
2. Joint venture match making
3. Feasibility Study
Under its broader merchant banking functions, IDLC operates Trusteeship manager, bridge
financer and investor in the placement of shares and stocks.
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Bay Leasing and Investment Ltd.
Bay leasing and Financial Investment: Bay Leasing & Investment Limited (BLIL), a second
generation NBFI (Non Banking Financial Institution) was incorporated in 7 February 1996
sponsored by a group of prominent industrialists, businessmen and professionals. In 25 May
1996 the Company received license from the regulator to act as non-banking financial
institution under Financial Institution Act 1993 & Financial Institution Regulation of 1994
with a paid up capital of BDT 22.50 million. Initially BLIL provided services related to lease
financing, short term financing, corporate advisory services etc. In 25 June 1998, BLIL
received license from Securities and Exchange Commission (SEC) to act as a Merchant
Banker and Portfolio Manager in the capital market. As a merchant banker, the Company
provides services related to issue management, underwriting, private placement, portfolio
management etc.
As on 31st December 2007, the Company invested BDT 426.09 million in shares. During
2006, the amount was BDT 313.21 million with decline of 3% over previous year. In 2005,
the growth rate was 127%. The current share investment portfolio comprised share of eleven
(11) private commercial banks, five (5) insurance companies, three (3) NBFIs and ten (10)
different manufacturing/trading companies. As on 31st December 2007, total 12 companies
shares had market value below their book value. However, the Company made share wise
sufficient provision for such unrealized loss amounting BDT 4.14 million. According to
income statement of BLIL for 2007, the Company earned BDT 111.28 million through gainfrom sale of shares and dividend income. In 2006, the company received total income of
BDT 19.73 million which includes BDT 17.29 million from sale of shares and BDT 2.44
million from dividend income.
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ICB Capital Management
ICB Capital management Limited: ICB Capital Management Ltd. has been created as a
subsidiary of ICB to carry out merchant banking activities including issue management,
underwriting and portfolio management. The company was incorporated under the
Companies Act, 1994 on 5 December 2000 and registration from the Securities & Exchange
Commission was obtained on 16 October, 2001. The company started its' operation from 01
July, 2002 upon issuance of gazette notification by the government.
Functions:
Underwriting of initial public offering of shares and debentures
Underwriting of right issue of shares
Issue management
Managing Investors' Account
Providing investment counsel to issuers and investors' including financial engineering
and corporate advisory services
Purchase of shares and debentures including placement and equity participation
To provide consultancy services for disinvestments program of the Government
To provide financial consultancy services to different companies in respect of Equity
& Entrepreneurship Fund of Bangladesh Bank and others Dealing in other matters related to capital market operation.
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ADVANTAGES OF MERCHANT BANKING IN BANGLADESH
Effects on Capital market
A well organized and efficient capital market is the essence of a market based financial system.
The stock market is the first and foremost forum in which individuals can trade risk and return,
llamas can raise capital and stockholders can maximize the value of their shares.
in many countries of the world especially the countries of the continental Europe and Japan have
started their reforms based on bank-dominated system first. So a full pledged reform program of
fi na nc ial sector includes the development of both bank and non-bank financial institutions in the
financial system so th at the overall savings and investment activities improve significantly.
Merchant banking activities involves activities like a manager of the issue, underwriter, bridge
ll nancer and portfolio manager etc. Merchant bankers can venture in such types of risky
businesses because of their particular types of sources of fund, which facilitate them to provide
institutional support to the capital market. On the other hand, bank's money is the depositors
money and so thai they go for less risky short term financing. For this reason banks are subject to
h igh regulations and merchant bankers are little or no regulations around the world and thereby
can go easily for risky investment such as merchant banking, venture capital etc. Their funding is
not covered bv the government protection.
The merchant banks accelerate the capital market which can expedite the economic growth of the
country. More and more investors would be interested in buying securities as they have the
necessary fund. Citigroup can contribute to bringing good products, bonds and corporate entities
in t he stock market. They will help in bringing companies including foreign ones in the stock
market and all this will increase the supply side in the market.
Effects on the Investors
General investors as well as corporate investors will now focus more on investing in shares and
coming into the market as Citi Bank, a reputable and trustworthy firm will be leading them fund
which they lacked before. Now foreign investors have an opportunity to contribute to the stockV
market of Bangladesh. Through corporate advising, the merchant bank helps the issue analyze its
financing needs and suggest various ways to raise needed funds.
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Effects on the Economy
The economy will see a robust growth once merchant banking will start their operations..
Perfectly. Merchant banking causes a great impact on the economy of Bangladesh Bank. It
contributes to the National GDP as well as to contribute to the growth of national economy. Due
to the merchant banking, people will be more encouraged to use their unutilized money in the
investment of different stocks and securities which are expected to grow. As a result the
unutilized portion which was not counted earlier in GDP in included now. The investment area"
wi l t be more safe and predictive. As due to the merchant banking more and more investors will
invest in the market, the market will be spread and as market will spread, there will be less risk
ol'default.
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Problems And Restrictions of Merchant Bankers
Unscrupulous and frequent policy changes by SEC:
The Security and Exchange Commission of Bangladesh tends to change the policy frequently
which sometimes drastically affects the market situation. To temporarily control the market
they take at times take measures that affect the market negatively in the long term.
Consequently, it compels some investors to leave the market and merchant banks are
affected.
Reduced Margin ratio:
According to the new SEC guideline, the margin ration for disbursing loan has been reducedto 1:1 which was previously 1:1.5. So the amount of loan given by the merchant banks have
been reduced which ultimately affect their profit margin.
Ceiling for margin loan
The Securities and Exchange Commission set new ceiling for margin loan for merchant
banks and brokerage houses. Under the new directive, merchant banks and brokerage houses
are allowed to lend up to Tk 10 crore as margin loans to their clients, an official said.
Margin loans, meant for share trading purposes, are disbursed against the shares an individual
investor has in his or her possession. The impact of this decision sent a shockwave through
the market and on the following day, DSE general index fell by over 200 points.
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Challenges of Merchant Banking In Bangladesh
Supply of Funds:
Although share capital is perspective source of fund for merchant banks, many companies
have not utilized the opportunity fully. As most of the merchant banks are incorporated as
public limited companies, it could be as better alternative for them to raise fund through
initial public offerings in order to finance the expanding horizon of activities. It can be
noticed that the dominance of bank loan in the total fund is decreasing while the importance
deposit base is gaining momentum. Financial institutions have to raise capital reserve of at
least BDT 250 million, a portion of which must be collected through the issuance of IPO.
This arrangement will make their operations more transparent, bring accountability to theshareholders and reduce dependence on credit lines. Though all merchant banks were
required to raise the minimum capital requirement through IPOs by September 2006
(extended from June 2006,) eight (8) companies share yet to float their shares in the market.
Four of these have already submitted necessary documents to SEC for review while four
others are still in the process of doing so.
Cost of Fund:
Merchant Banks face comparative disadvantage in collecting funds compared to the banks
because Merchant Banks cannot collect short term (less than one year) deposits from individuals
due to the central banks restriction, and again deposits in Merchant Banks are perceived to be
less safe to the public. Due to the liquidity crisis, when interest rate goes up, the average rate of
interest on bank credit lines and deposit rate also increases, which causes significant rise in the
cost of fund for Merchant Banks. The high cost of fund for Merchant Banks compels them to
operate on a relatively low profit margin.
(c) Asset-Liability Mismatch
Asset-liability mismatch is another cause of concern for Merchant Banks. Demand for funds to
meet the increasing lending requirements has increased many times. But the availability of funds
has become inadequate. The average weighted life of its deposits and borrowing in its operating
guidelines for a leasing company. Therefore, Merchant Banks have to explore alternative ways
for raising funds.
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(d) Investment in High Risk Portfolio
It is already mentioned that cost of funds for Merchant Banks are higher than that of banks. In
order to sustain the high cost of borrowing, Merchant Banks may be inclined to invest in the high
return segments, which can expose them to commensurately higher risks. Moreover, fierce
competition among competitors may also force many Merchant Banks to reduce the margin at the
expense of quality of the asset portfolio. This strategy may eventually create the possibility of an
increase in the non-performing accounts. Unless adequate risk management capabilities are
developed, the growth prospects of Merchant Banks would not only be hindered but it might also
be misapprehended.
(e) Product Diversification
Merchant Banks emerged primarily to fill in the gaps in the supply of financial services which
were not generally provided by the banking sector, and also to complement the banking sector in
meeting the financing requirements of the evolving economy. the new customer base has not
been created and the growth of industrial entrepreneurship could not be facilitated through
Merchant Banks financing packages. Diversifying the product range is a strategic challenge for
Merchant Banks in order to become competitive in the rapidly growing market.
(f) Competition with Banks
With the advent of new Merchant Banks, the market share is being spread over the competing
firms and the demand facing each firm is becoming more elastic. Active participation of
commercial banks in the non-bank financing activities has further increased the level of
competition in the industry. For commercial banks, public deposit is one major source of funds
which they can collect with relatively lower cost. Thus the business environment for Merchant
Banks has become more challenging as they have to face uneven competition with banks in terms
of collecting funds.
(g) Lack of Human Resource
Skilled and trained human resource is considered as an important component for the development
of
any institution. Due to the recent growth of Merchant Banks, availability of experienced
manpower is a challenge for this industry. The supply shortage of efficient resource personnel has
been leading to a significant increase in the compensation package, which is also a cause of
concern for Merchant Banks. The industry experts believe that although there exists enormous
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growth opportunity the market is still quite small and scope of work for skilled personnel is very
limited compared to that of banks. This makes the competent personnel to switch from Merchant
Banks to other institutions after a certain period implying low retention rate of skilled human
resource.
h) Weak Legal System
Although the default culture has not yet infected Merchant Banks to any major extent, they face
difficulties in recovering the leased assets in case of a default. Moreover delays in court
procedures create another cause of concern. The situation cannot be improved only by making the
legal system stronger through enactment of new laws rather ensuring proper implementation
existing ones is more of concern.
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Comparison of Merchant Bank services between Bangladesh and
Globally
Merchant Banks in Bangladesh mainly offer services like issue management, underwriting
options and portfolio management. But internationally banks provide a wind range of service
which has not been introduced in our country. So, Bangladesh is far more behind from the
international market although there is a great potential here.
Many firms abroad are large enough to go international and have the potential to live up to the
expectations of the market beyond their boundary. For these organizations, international
merchant banks concentrated services which are solely dedicated in suggesting and
recommending the firms about how to approach the international business and become a
multinational service. But merchant banks in Bangladesh are yet to offer services like that.
Many firms in many countries have the potential to do a profitable servile by addressing its
populations varying needs. International merchant banks offer advices to their clients regarding
such differentiated needs by suggesting them realistic business ideas. Bangladeshi merchant
banks have to take it into account.
Many merchant banks educate their client about all the services and functions the banks offer and
the services the clients want. Though there are a few banks offering these services, it is only in
mere feature which is not widely effective and appreciable.
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Conclusion
The merchant banker plays a vital role in channelizing the financial surplus of the
society into productive investment avenues. A merchant banker plays multiple roles which
include those of an entrepreneur, a management advisor, an investment banker, and a
transaction broker.
This shows that the breadth and depth of a merchant bankers activity has changed over
the years. Bangladeshi capital market has been increasing in importance since the 1996
incident. Active participation of merchant banks is essential oto accelerate the cpital market
activity wjich can expedite economic growth. But the limited scope for fund and the elevated
cost pose problems for them.
Although 37 merchant banks are operating, officials said only a few are active while the
performance of the rest is far from being satisfactory. The merchant banks should focus on
forming their own portfolios in making the market sustainable. They should diversify their
functions other than lending. Right now, what are they doing is risky,
In order to ensure sustainability of the merchant banks, the scope of business needs to be
expanded. Issue expense is another cause of concern as it may reduce the earning potential
since the IPO floated in Bangladesh is much smaller than other countries.
Merchant banker can play highly significant role in mobilizing funds of savers to invisible
channels assuring promising returns on investment and thus can assist in meeting the
widening demand for invisible funds for economic activity. With growth of merchant
banking profession corporate enterprises in both private sectors would be able to raise
required amount of funds annually from the capital market to meet the growing requirement
for funds for establishing new enterprises, undertaking expansion, modernization and
diversification of the existing enterprises. This reinforces the need for a vigorous role to be
played by merchant banking.
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Recommendation
Exploring Alternative Sources of Funds
The finance and leasing companies across the world are using different sources for collecting
funds.
Merchant Banks in Bangladesh may also explore the possibilities of gaining access to new
sources of funds like issuance of commercial paper and discounting or sale of lease
receivables. However, in releasing such new products, some regulatory changes have to be
made. Another innovative and promising source of funds may be the securitization of assets.
Competition and Product Diversification
Merchant Banks in Bangladesh are operating in a highly competitive environment. The
competition for Merchant Banks is even more challenging as they have to compete with
banks. Given the changes in the business environment, the need for product diversification is
very important. At present, lease financing constitutes 55 percent of the total long term assets
of Merchant Banks. The remaining part concentrates mainly on term financing and housingfinance. Some of Merchant Banks are primarily engaged in leasing, some are also
diversifying into other lines of business like merchant banking, equity financing etc.
Currently, 22 Merchant Banks (out of 29) specialize in lease financing. Merchant Banks are
permitted to undertake a wide array of activities and therefore should not confine themselves
to one or two types of product only. Leasing, no doubt, presents a good alternative form of
term financing but Merchant Banks should also venture into diversified use of their funds
such as merchant banking, venture capital financing, factoring, etc. for a healthy growth of
the capital market.
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Enhancing Capital Market Activities
Merchant Banks around the world carry out a significant role in the development of the
capital market. Strong institutional support is necessary for a vibrant capital market which is
the core of economic development in any market based economic system. Merchant Banks
through their merchant banking wing can act in this regard. A total of 30 companies are now
listed as merchant banks in Bangladesh, of which 23 are full-fledged, 6 are issue managers,
and only one is a portfolio manager. Only nine Merchant Banks have registered with SEC for
performing merchant banking activities. But their activities in the capital market are rather
limited (Financial Sector Review, Bangladesh Bank, 2006). Active participation of merchant
banks is essential to accelerate the capital market activities which can expedite the economic
growth of the country. The success of merchant banking operations is largely linked to the
development of the security market. So Merchant Banks should concentrate more on their
opportunities in the capital market.
Issues of Taxation
The financing mode of lending and leasing are totally different from one another. The
concept and procedure particularly the accounting and taxation system are also quite
different. So it is advisable not to mix up the two different operations, otherwise it might
distort the basic financial norms. As the tax treatment is totally different in leasing business,
mixing up of lending and leasing in the same business portfolio might create the possibility of
tax evasion.
Market Segmentation
It has been discussed earlier that though banks and Merchant Banks compete with each other
they can also perform complementary functions. To function as complementary institutions
both banks and Merchant Banks should follow some ethical and technical norms. 15 Banks
wishing to enter in the leasing business, which is essentially a core operation of Merchant
Banks, should do so through opening subsidiaries so that a level playing field for Merchant
Banks can be maintained. This is needed as banks have access to lower cost funds compared
to Merchant Banks, which puts the former in an advantageous position. Alternatively, banks
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can go for joint financing under syndication arrangements with leasing companies on any
project proposal. Again, banks can concentrate on working capital finance and foreign
exchange operations, which matches more with their asset-liability management.
Long term investment like financing capital machineries can be done by Merchant Banks and
in the event when banks want to engage in such activities they can place their funds with an
NBFI to extend lease facility for those machineries. Jamal (2004) mentioned that this is
important for two reasons: first, in case of lease facility, the machineries will remain under
the ownership of leasing companies, who will have absolute authority and control on their
assets. Second, machineries will be imported in the name of a leasing company and letter of
credit will be opened against its name. So, over invoicing or under invoicing may be averted
and thereby more transparency will be ensured and tax evasion may be plugged.
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Bibliography
Bangladesh Bank Annual Report (Various Issues)
Bangladesh Bank, Economic Trends (Various Issues)
Bangladesh Bank (2006), Financial Sector Review,
vol.1, no.1, May, Policy Analysis Unit, Research Department
Bangladesh Bank, Financial Institutions Department
Bangladesh Leasing and Finance Companies Association (BLFCA) Year Book
Ministry of Finance, Government of Bangladesh,
Activities of Bank and Financial Institutions
Non Banking Financial Institutions (NBIFs), Annual Report, Financial report
Dhaka Stock Exchange
Overall Merchant Banking Information of,
AB Bank Ltd., LankaBangla Finance Ltd., IDLC Finance Ltd., Sawdesh Finace Ltd.,
Trust Bank Ltd., GSP Finance Ltd., Uttara Finance Ltd., Equity Partners Ltd., ICB
Finance Ltd. and others.
Banglapedia
Different Reports on Merchant Banking
Internet Sources
Recommended