BRAC Bank witnesses steady growth in last five years

Wants to be number one bank riding on managerial efficiency


Mohammad Mufazzal | Published: May 09, 2018 00:36:33


BRAC Bank displayed a steady growth in earnings and dividend payout in last five years riding mainly on managerial efficiency, the bank's top executive said, eyeing to make the company number one in the country's banking sector.

The return on assets (ROA), an indicator of how profitable a company is relative to its total assets, over the last five years reflects the bank's efficiency in generating revenue by using its assets.

The ROA improved from 0.78 per cent in 2013 to 1.95 per cent 2017, according to the company's financial statement.

The company's consolidated ROA, including the subsidiaries, was 1.77 per cent in 2017, 1.55 per cent in 2016, 1.02 per cent in 2015, 0.93 per cent in 2014 and 0.17 per cent in 2013.

"So far I know the ROA of other banks is far below than the BRAC Bank. Many banks even do not public their ROA," said Selim R. F. Hussain, managing director and CEO of BRAC Bank.

He said the bank witnessed a moderate growth of earnings in 2017 based on 'strong' performance culture introduced by the management. The company's consolidated earnings per share (EPS) gradually rose from Tk 2.51 in 2013 to Tk 6.07 in 2017.

"Our balance strategy and employees' active role contributed in steady growth achieved mainly in last two years," Mr. Selim said.

He said the amount of the bank's default loans gradually declined because of accountability of its officials.

Asked about the bank's future business plan, the bank's managing director said they want to be number one in the banking sector by spreading their products across all segments.   

The amount of the bank's loan and advances was above Tk 202.55 billion in 2017 and the volume of non-performing loans (NPLs) to total loans and advances was 3.56 per cent for the year. The ratio of the NPLs improved over the years from 6.49 per cent in 2013. 

The company's operating income rose 32 per cent to above Tk 9.05 billion in 2017. The amount was above Tk 8.01 billion in 2016, above Tk 6.83 billion in 2015, above Tk 6.14 billion in 2014 and above Tk 5.65 billion in 2013.

The company's consolidated net profit also gradually rose during a period from 2013 to 2017. In 2017, the company's net profit stood at above Tk 5.49 billion, which was 35 per cent higher than the net profit of 2016, according to the financial statement.

In 2016, the company's net profit was above Tk 4.07 billion, which was almost double the net profit incurred in 2015.

The company's net profit after tax was above Tk 1.33 billion in 2013, above Tk 2.03 billion in 2014 and above Tk 2.34 billion in 2015.

The company's total expenditure was reasonable during the period from 2013 to 2017. It reported total expenditure above Tk 19.64 billion in 2013, above Tk 17.49 billion in 2014, above Tk 18.55 billion 2015, Tk 11.57 billion in 2016 and Tk 14.27 billion in 2017.

The company's investment income marginally declined year-on-year during 2013 to 2016, but moderately rose in 2017. In 2017, the company's investment income stood at above Tk 2.91 billion which was 16 per cent higher than that of 2016.

The company issued 10 per cent stock dividend in 2013, rights share at a ratio 1R:2 in 2014, 25 per cent cash dividend in 2015, 10 per cent cash and 20 per cent stock in 2016 and 25 per cent dividend in 2017.

The company's share price also displayed a steady rise in 12 months of 2017 on Dhaka Stock Exchange (DSE) and ranged between Tk 63.80 and Tk 114.40 each in the year.

The market capitalisation of BRAC Bank stood at above $ 1.04 billion on Monday. On the day, the company's share trading closed at Tk 81.60 each, with a loss of 2.05 per cent or Tk 1.7.

Foreign investors own a significant stake in the bank compared to general investors. According to DSE information, foreign investors hold 40.81 per cent shares against only 6.36 per cent held by general shareholders as on March 31, 2018.

In 2017, the company's investment in CSR (corporate social responsibility) activities was Tk 164 million, more than five times the investment made in 2016.

BRAC Bank was listed with the stock exchanges in 2007. The company's subsidiaries are bKash, BRAC EPL Stock Brokerage, BRAC Saajan Exchange and BRAC EPL Investment.

mufazzal.fe@gmail.com

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