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BRAC Bank earned a record profit of Tk 14.32 billion in 2024, securing a remarkable 73 per cent year-on-year growth driven by substantial income from investments in government securities.
Apart from high returns from Treasury bills and bonds, the bank witnessed an escalation in interest income in the year, compared to the previous year.
The third generation commercial bank's consolidated earnings per share (EPS) stood at Tk 6.95 for the year, up from Tk 4.30 (restated) for the year before.
The annual audited financial statement of the bank was approved at a board meeting on Monday.
Based on the profit growth, the board of directors declared a 25 per cent dividend (12.5 per cent cash and 12.5 per cent bonus shares) for 2024. This is also the highest dividend declaration since 2015. It had paid 25 per cent cash dividends for 2015.
The number of outstanding shares of the bank is nearly 1.77 billion. So, the bank will pay Tk 2.21 billion in
cash dividends to its shareholders against existing shares for 2024.
The bonus shares were recommended to strengthen the capital base of the bank, said the bank in its earnings note, adding that the shares were declared out of the current year's profit.
BRAC Bank's performance corroborates the notion that the lenders, which wisely made good investments in Treasury bills and bonds, reaped handsome returns.
While interest income grew in the year due to the introduction of market-based interest rate, interest payment to depositors and lenders also jumped due to higher deposit rate.
However, higher gains from government securities supported the lender's impressive earnings growth in an adverse business climate engendered by inflationary pressure.
The bank's loan disbursement and deposit collection also witnessed substantial growth, surpassing the sector average, which was made possible through the development of digital banking services.
The bank has recorded a 35 per cent compound annual growth rate of deposits over the last three years, far ahead of the industry average of 7.5 per cent.
Notably, branches contributed 75 percent of this growth, said Sheikh Mohammad Ashfaque, deputy managing director (DMD) and head of branches distribution network of the bank, in an exclusive interview with The Financial Express (FE) recently.
The profit growth was supported by small and medium enterprises (SME) and technology-based customer services, he said.
BRAC Bank has always been able to keep operating costs down and mobilize funds at relatively lower costs due to its excellent market reputation, which enabled the bank to remain competitive in the market.
A reduction in non-performing loans and higher income from the bank's subsidiary bKash also supported the boost to its income.
The bank is yet to disclose the detailed annual financial statements for 2024.
However, the bank's nine months' interest income surged 38 per cent year-on-year to Tk 41.80 billion while interest payment jumped 95 per cent to Tk 29.22 billion through September last year.
BRAC Bank's investment income more than doubled to Tk 19.65 billion in the nine months through September as the bank diverted funds to government securities, considering risk-free returns.
Meanwhile, the bank's stock dropped 1.2 per cent to Tk 49.50 per share on Monday on the Dhaka Stock Exchange.
The annual general meeting will be held on June 19 while the record date is May 25.
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