The Bank of Punjab has disclosed on 10 August 2026 that its Board has proposed the issuance of ordinary shares to the Government of Punjab against an equity subscription of up to PKR 30 Bn, subject to the required shareholder and regulatory approvals.
The capital injection is proposed to take place in two tranches, with up to PKR 20 Bn by December 31, 2026 and the remaining amount by June 30, 2027. The shares are proposed to be issued at PKR 38.2 per share. However, if BOP’s prevailing market price at the time of issuance is above PKR 38.2, the subscription price will instead be set at the prevailing market price plus a 5% premium.
Therefore, PKR 38.2 per share is the minimum issue price with protection built into the formula for minority shareholders. At the minimum issue price of, a full PKR 30 Bn subscription would result in the issuance of approximately 785 Mn new shares. The eventual numbers of shares issued could be lower if BOP’s share price exceeds PKR 38.2 at the time of either tranche. The transaction represents a direct issuance to the Government of Punjab rather than a rights issue and will therefore increase the Government’s ownership in the bank while diluting the percentage ownership of existing minority shareholders.
However, proceeds of the issuance will remain within BOP as additional shareholder’s equity, strengthening the bank’s capital base and providing additional capacity for balance sheet growth. At present, the banks’ book value per share is PKR 29.77 per share and if the complete issuance was done today at a price of PKR 38.2 per share it would augment the book value by 5.5% to PKR 31.40 per share. Therefore, the transaction positively impacts BVPS. From an earnings perspective, the increase in the share count may result in an initial EPS dilution until the additional capital is deployed into income-generating assets. The eventual impact on earnings and ROE will therefore depend on the timing and returns generated from deployment of the fresh capital. The proposed transaction remains subject to approval from the BOP’s shareholders and relevant regulatory authorities including SBP and SECP.
Important Disclosures
Disclaimer: This report has been prepared by Chase Securities Pakistan (Private) Limited and is provided for information purposes only. Under no circumstances, this is to be used or considered as an offer to sell or solicitation or any offer to buy. While reasonable care has been taken to ensure that the information contained in this report is not untrue or misleading at the time of its publication, Chase Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time, Chase Securities and/or any of its officers or directors may, as permitted by applicable laws, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this report Chase Securities as a firm may have business relationships, including investment banking relationships with the companies referred to in this report This report is provided only for the information of professional advisers who are expected to make their own investment decisions without undue reliance on this report and Chase Securities accepts no responsibility whatsoever for any direct or indirect consequential loss arising from any use of this report or its contents At the same time, it should be noted that investments in capital markets are also subject to market risks This report may not be reproduced, distributed or published by any recipient for any purpose.