Quick Facts

Where the impacts of the investment may be experienced.
  • Bangladesh
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
  • International Finance Corporation (IFC)
Status: Active
Bank Risk Rating: FI
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Board Decision Date: 2015-12-01
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower or Client: City Bank Limited
The holder of the loan, grant, or other investment.
The service or industry focus of the investment. A project can have several sectors.
  • Finance
Investment Type(s): Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD): $ 36.87 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.

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Primary Source

Original disclosure @ IFC website
Updated in EWS: 2017-08-07
Disclosure Date: 2016-02-18
City Bank Equity

Project Description
The project comprises an investment to take up to a 5% (post money) stake in common shares of The City Bank Ltd through a preferential allotment for a total investment amount up to BDT 1.32 billion (approximately US$17 million equivalent at current exchange rate). In addition to the common shares, the project will also include a 3-year senior loan for an amount of US$20 million, convertible to the Bank's common share at the expiry at IFC's option. The financing provided is a fit with the World Bank and IFC’s Financial Institutions Group strategy to strengthen financial institutions with equity capital, liquidity support and advisory services. The Bank commenced operations from 27th March 1983 and has total assets of US$2.6 billion as of September 30, 2015.
People Affected By This Project
1. Impact on Financial Sector Development: The Bangladeshi financial sector is under-developed and the country''s banking system requires considerable improvement. The Project will promote financial intermediation by using the broad regional network of City Bank to reach SMEs. Additionally, this Project will create a demonstration model for existing banks, encouraging them to strengthen capital position, improve corporate governance and operational standards. The Project will promote further competition in the Bangladeshi banking sector by giving borrowers across the country greater access to banking products.<br><br>2. Supportive to Bangladesh FIG strategy: A key pillar of Bangladesh FIG strategy is strengthening the financial system through capital infusion in select banks and supporting improved corporate governance. Higher non-performing loans (&quot;NPLs&quot;) and regulatory tightening (including BASEL III requirements) translates into higher capital needs. Various estimates peg banking sector capital requirements in excess of US$1 billion that will not be all available through domestic capital alone.<br><br>3. Support Corporate Governance Improvement Efforts: IFC would be supporting the Bank''s efforts to improve corporate governance, and other potential program as well could be explored with the Bank. An IFC-appointed director would be an important addition to the existing board.<br><br>4. Demonstration Effect: The IFC funding will encourage other investors to provide capital to the Bangladeshi banking sector to support asset growth.
Investment Description
An equity investment of up to BDT 1.32 billion (approximately US$17 million equivalent at current exchange rate) in City Bank Limited for an equity stake of up to 5 percent on a fully diluted basis from IFC’s own account; and A loan for IFC’s own account for up to US$20 million to City Bank Limited, convertible into equity shares in the Bank at IFC’s option.
Contact Information
COMPANY CONTACTS Sheikh Mohammad Maroof Deputy Managing Director & Head of Wholesale Banking The City Bank Limited 136, Gulshan Avenue Gulshan-2, Dhaka-1212 PH: +8802 8834767 Email: mailto:smaroof@thecitybank.com Mohammad Mahbubur Rahman Senior Executive Vice President & Chief Financial Officer The City Bank Limited 136, Gulshan Avenue Gulshan-2, Dhaka-1212 PH: +8802 58813126 Email: mailto:mrahman@thecitybank.com ACCOUNTABILITY MECHANISM OF IFC The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/