Most banks report earnings growth in 2023

Infographics: TBS

A majority of publicly traded banks achieved growth in earnings in 2023 attributed to a rise in interest income and successful implementation of business strategies despite economic challenges and volatility in foreign currency. 

A review of the listed banks' financial data showed that 23 banks, including seven achieving record profits, reported earnings per share (EPS) growth ranging from 0.64% to 121% for 2023. Among these, 18 banks demonstrated double-digit EPS growth compared to 2022, while the remaining banks experienced growth below 10%.

However, eight banks experienced a decrease in EPS. Notably, ICB Islami Bank and National Bank continued to register losses, mirroring the previous year's performance. Additionally, Dhaka Bank and Shahjalal Islami Bank reported EPS figures identical to those of 2022.

Among the 36 banks listed on the stock exchanges, 35 have disclosed their financial results and dividends for shareholders for the year 2023 as of 2 May. However, annual reports for all banks have not been released yet.

Among the banks that experienced earnings growth, some have opted to increase dividends — both in cash and stock — for their shareholders in 2023. However, despite profit growth, others will maintain or decrease dividends to shareholders. 

Approximately 16 banks announced both stock and cash dividends, with stock dividends being declared to bolster their capital base through the utilisation of retained earnings, as disclosed. 

Additionally, over a dozen banks declared cash dividends exclusively, while one bank solely declared cash dividends, and three banks have chosen not to distribute any dividends to their shareholders.

The BRAC Bank reported a 26% increase in earnings per share (EPS) to Tk4.73 for 2023, achieving its highest-ever profit of Tk825 crore for the year. 

In response to the heightened profits, the private sector lender declared increased dividends compared to 2022. 

While in 2022, it disbursed a total dividend of 15% — 7.5% cash and 7.5% stock — this year, the bank declared a total dividend of 20%—10% in cash and 10% in stock—for 2023.

Regarding the increase in profits, Selim RF Hussain, the managing director of BRAC Bank, told TBS on 20 April that the bank achieved its highest-ever profit last year, largely driven by interest income. 

He further noted that the bank's loan disbursements and deposit collections surpassed the banking sector average, attributing this success to the advancement of digital banking services.

Meanwhile, the Rupali Bank, the sole publicly-listed state-owned commercial bank, reported a 121% growth in EPS for 2023, but it will not pay any dividends to its shareholders, according to its financials published on the Dhaka Stock Exchange (DSE) on Thursday.

In 2022, it also did not pay any dividend to its shareholders.

That is why, the Dhaka Stock Exchange (DSE) is set to downgrade the bank to Z category from the existing B category with an effect on 5 May, in line with a directive of the Bangladesh Securities and Exchange Commission (BSEC) issued on 15 February.

On Thursday, Rupali Bank's shares declined by 15% to Tk23.1 each.

As per the disclosed financial statements, Midland Bank recorded a significant 101% increase in earnings per share (EPS) to Tk1.77. The bank has opted to distribute a 5% cash dividend to its shareholders, consistent with the dividend payout for the previous year.

Al-Arafah Islami Bank, on the other hand, achieved a 13.23% growth in EPS to Tk2.14. The bank attributed the increase in its EPS for 2023 to a reduction in total provisions against investments compared to the previous year.

Meanwhile, Bank Asia reported a notable 31.68% decrease in EPS to Tk1.79. The bank cited that the decline in EPS was primarily due to the maintenance of higher provisions compared to the previous year.

The Exim Bank reported a 9.34% decline in EPS for 2023 to Tk2.33. The bank said that its EPS decreased mainly due to an increase in provision for investments.

Prime Bank's EPS grew by 20% to Tk4.24 due to an increase in net interest and investment income, said in a disclosure published on the stock exchanges.

City Bank's EPS grew by 33.59% to Tk5.21. The bank will pay a 25% dividend – 15% cash and 10% stock – to its shareholders. Earlier in 2022, it had paid 10% cash and 2% stock dividends.

Dutch Bangla Bank's EPS grew by 41% to Tk10.72, it will pay 35% dividends – 17.5% cash and 17.5% stock. In 2022, it had paid 17.5% cash and 7.5% stock dividends.

Eastern Bank's EPS grew by 19%, First Security Islami Bank's by 11%, Global Islami Bank's by 32%, Jamuna Bank's by 49%, Mutual Trust Bank's by 21%, NRB Bank's by 43%, Premier Bank's by 6%, Pubali Bank's by 23%, Trust Bank's by 45%, Uttara Bank's by 17%, South East Bank's by 22%, and Standard Bank's by 23%.

While IFIC Bank's EPS declined by 13%, Mercantile Bank's by 12%, One Bank's by 12%, UCB Bank's by 33%, and SBAC Bank's by 8.3%.