BRAC, City banks' investment income offsets core business slowdown

Both BRAC Bank and City Bank secured a year-on-year growth in profit in the first quarter through March this year despite a decline in interest income as their investment income jumped.

City Bank showed a 2.88 per cent year-on-year rise in net profit to Tk 0.93 billion in the first quarter of 2025 although net interest income was reduced by a whopping 63 per cent in the first quarter to March compared to the same quarter a year ago.

The profit was mainly driven by a 215 per cent year-on-year surge in investment income to Tk 5.93 billion, most of which came from government securities.

The earnings per share (EPS) rose to Tk 0.69 for the first quarter of 2025 from Tk 0.67 for the same period a year ago, according to the price sensitive information published on Tuesday.

In the first quarter to March, City Bank saw a 35 per cent year-on-year growth in interest income but interest expenses soared by 107 per cent. So, net interest income was slashed by nearly 63 per cent year-on-year to Tk 1.49 billion in Q1 this year.

The data indicates that the rising interest rate is squeezing the demand for loans in the economy, which is why lenders are failing to widen their net interest margin.

However, the rise in investment income supported a 19.53 per cent year-on-year growth in operating income of City Bank.

"Operating profit increased as a result of significant increase in investment income, which helped offset de-growth in net interest income and pay for rising operational costs," said the company in its earnings note.

Meanwhile, the stock fell by 1.3 per cent to Tk 22.70 per share on Tuesday on the Dhaka Stock Exchange.

BRAC Bank witnesses higher income growth

BRAC Bank showed a staggering 53 per cent year-on-year escalation in profit to Tk 4.86 billion in the first quarter to March this year, despite a more than 10 per cent reduction in net interest income.

The earnings per share (EPS) rose to Tk 2.27 for the first quarter of 2025 from Tk 1.54 for the same period a year ago, according to the price sensitive information published on Tuesday.

BRAC Bank's investment income soared by more than 83 per cent year-on-year to Tk 9.83 billion in January-March. Again most of the income in this segment was derived from debt-based government securities.

It gained a 45 per cent year-on-year growth in interest income in the first quarter of this year but interest expenses jumped at a higher pace - 77 per cent in the quarter to March compared to the corresponding period last year. Net interest income was reduced by more than 10 per cent to Tk 4.10 billion

BRAC Bank, unlike City Bank, cut its provision by 39 per cent year-on-year to Tk 0.74 billion in the three months to March.

Meanwhile, the stock went up 0.19 per cent to Tk 52 per share on Tuesday on the Dhaka Stock Exchange.

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