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Jamuna Bank PLC posted an impressive 38 per cent year-on-year growth in profit for the third quarter (Q3) of this year, owing to higher interest and investment income along with increased income on commission, exchange and brokerage.
The third generation private commercial bank has reported a consolidated net profit of nearly Tk 1.06 billion for the July-September quarter, as against Tk 764 million in the same quarter the previous year, according to its financial statement published on Thursday.
Accordingly, consolidated earnings per share (EPS) stood at Tk 1.20 for July-September '24, up from Tk 0.87 in the same quarter of the previous year.
The bank's interest income and profit on investments grew 41 per cent year-on-year to Tk 5.57 billion in July-September this year, while income on commission, exchange and brokerage climbed 255 per cent to Tk 1.35 billion during the period. However, net interest income declined 16 per cent to Tk 1.05 billion in the third quarter.
The listed bank's nine months' consolidated profit also rose 24 per cent year-on-year to Tk 4.13 billion while income from commission, exchange and brokerage almost doubled to reach Tk 4.03 billion.
The bank's net interest income for the nine months through September also grew more than 2 per cent year-on-year to Tk 3.40 billion.
Since the withdrawal of the interest rate cap, the gap between interest rates charged by banks on loans and interest rates paid by banks against deposits have widened, leading to higher net interest income.
The bank's prudence in making higher investments return in government securities, alongside higher commission, exchange and brokerage income, helped secure a significant profit growth, said the bank in its earnings notes.
Higher net interest income, the core source of earnings for banks, along with gains from government securities, bolstered the lender's impressive earnings growth, even in a challenging business environment impacted by inflationary pressures, said an official of the bank, declining to be named.
The net operating cash flow per share, a measure of a company's ability to generate cash from its operations, jumped 61.37 per share in January-September this year, up from Tk 11.27 in the same period last year.
The bank explained that net operating cash flow per share increased due to significant increase in deposit, and borrowing from other banks, along with increase of interest income, fees and commission.
The net asset value, which refers to the excess of total assets over total liabilities, reached Tk 26.25 per share as of September this year, up from Tk 22.74 in December 2023, due to increase in retained earnings, paid-up capital, statutory reserve and revaluation reserve on government securities.
Listed in 2006, the bank's stock price closed at Tk 17.6 on Thursday, remaining unchanged over the previous session.