BRAC Bank shares soar as SoftBank buys stake in bKash

The shares of BRAC Bank have soared after Japanese investment company SoftBank agreed to acquire a 20 percent stake in its subsidiary bKash, the leading mobile phone financial service provider in Bangladesh.

A day after the announcement of SoftBank's investment in bKash, the price of BRAC Bank's shares jumped to Tk 48.70 from Tk 44.30 -- a 9.93 percent increase -- at 10:49 am on Thursday, triggering the circuit breaker.

A circuit breaker is a regulatory measure to temporarily halt trading on an exchange to prevent both speculative gains and dramatic losses within a small time frame.

BRAC Bank currently holds a 51 percent stake in bKash while US investment company Money in Motion LLC owns 29 percent of its shares, according to a financial report.

International Finance Corporation or IFC, an organisation of the World Bank Group owns 9.9 percent shares and the remaining 10.10 percent belongs to Alipay Singapore E-Commerce Private Limited.

The Bill and Melinda Gates Foundation and Alipay Singapore have invested in preference shares of bKash.

BRAC Bank said the decision to sell shares to SoftBank was made with the approval of Money in Motion, IFC, Alipay, Bill and Melinda Gates Foundation, the Board of Trustees of bKash Employee Share Option Plan Trust and Softbank.

There will be no change in BRAC Bank’s shareholding of bKash even after the sale to SoftBank, the bank said.

SoftBank Group is a Japanese multinational conglomerate holding company focused on investment management.

The group primarily invests in companies operating in the technology, energy, and financial sectors. It also runs the Vision Fund, the world's largest technology-focused venture capital fund, with over $100 billion in capital.

bKash rolled out its mobile financial service in 2011. It earned Tk 26.24 billion in 2020 and suffered a loss of Tk 674.4 million.

Listing on the capital market in 2007, the company is classified under category A.

BRAC Bank made a profit of Tk 4.41 billion in the fiscal year of 2020-2021.

The company has more than 1.39 billion shares in the capital market, with the directors holding 46.24 percent.

Institutional investors own 11.84 percent and foreign investors 35.61 percent. General investors hold 6.31 percent of BRAC Bank’s shares.

Currently, BRAC Bank’s market capital stands at Tk 61.67 billion.