Prime Bank reaps benefit of interest rate rise, govt securities

Prime Bank's profit surged by 25 per cent, or Tk 0.69 billion, year-on-year in the first nine months of 2023 as the lender got the advantage of higher investment in government securities during the period.

The bank earned a profit of Tk 3.51 billion in the nine months, up from Tk 2.82 billion in the same period a year earlier, according to an unaudited earnings report on Thursday.

Chief Financial Officer (CFO) of Prime Bank Md. Habibur Rahman Chowdhury said the bank had earned Tk 900 million more in interest income from Treasury bonds, compared to the same period of the previous year.

"We invested Tk 30 billion more in government securities, compared to the year earlier. We have also had higher net interest income as the interest rate rose. But the impact of Treasury income is more on our profit," he said.

The lender's investment income jumped 31 percent year-on-year to Tk 3.78 billion in January-September. Of that, 79 per cent came from Treasury securities.

The interest rate of 182 days' Treasury bills rose to 7.55 per cent in January this year from 3.05 per cent last year.

According to the financial discloser, the earning per share (EPS) of the bank climbed to Tk 3.05 for the nine months to September from Tk 2.47 for the same period a year ago.

The consolidated net operating cash flow per share was Tk. 4.47 for January-September 2023, increased from Tk. 1.09 for January-September 2022. The NOCFPS improved due to incremental deposit mobilisation commensurate with the rise in operating income.

The consolidated NAV per share was Tk. 29.75 as of September 30, 2023, which was Tk. 27.18 a year ago.

The bank had reported a profit of Tk 3.25 billion for FY21 and Tk 3.99 billion for FY22 and disbursed 17.5 per cent and 17.5 per cent cash dividends to shareholders for the fiscal years.

The stock traded at Tk20.30 on Thursday.

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