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City Bank's annual profit surpassed Tk 10 billion in 2024 for the first time since its inception in 1983, securing a remarkable 59 per cent year-on-year growth driven by substantial income from investments in government securities.
The first generation commercial bank's consolidated net profit stood at Tk 10.14 billion in 2024, while the net profit on standalone basis was Tk 10.85 billion for the year.
Due to provisioning expenses against unrealised losses in the capital market investments by two of its subsidiaries, its consolidated profit declined slightly, said the bank in its earnings note.
Apart from high returns from Treasury bills and bonds, the bank witnessed an escalation in interest income in the year, supporting the lender's impressive business growth in an adverse climate engendered by inflationary pressure.
Following the earnings disclosure, the bank's stock rose 1.77 per cent to Tk 23 per share on Wednesday on the Dhaka Stock Exchange.
The bank's annual audited financial statement was approved at the board meeting on Tuesday. Based on the profit, the board of directors recommended a 25 per cent dividend (12.5 per cent cash and 12.5 per cent bonus shares) for 2024.
Stock dividend has been recommended to strengthen the capital base of the bank for supporting future growth and to improve certain regulatory ratios, the bank said.
The number of outstanding shares of the bank is nearly 1.35 billion. So, the bank will pay Tk 1.68 billion in cash dividend.
"People showed their trust in City Bank, resulting in a surge in deposits," said Mashrur Arefin, managing director and chief executive officer (CEO) of City Bank, in a statement, adding "Our cost-to-income ratio dropped from 60 per cent to just 42 per cent, leading to a substantial rise in net profit."
City Bank's deposits grew 31 per cent year-on-year to Tk 121.77 billion in 2024, while loan growth surged 12 per cent or Tk 48.31 billion.
A significant portion of this surplus fund was invested in government securities.
The bank's income sources reveal that 64 per cent of total revenue came from interest income on loans, 12 per cent from fees and letter of credit (LC) commissions, and 19 per cent from Treasury bills and bonds.
The remaining 5 per cent came from private bonds, dividends, and stock market earnings.
Altogether, 76 per cent of the bank's income came from core banking activities underscoring its reliance on and efficiency in lending operations.
The annual general meeting will be held on June 19 while the record date is May 22.
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