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State-owned Rupali Bank PLC reported a sharp 82 per cent decline in net profit for 2024, as increased provisioning against loans, leases, and advances, coupled with reduced operating profit, weighed heavily on its bottom line.
The bank's net profit stood at Tk 112 million in 2024, down from Tk 627 million the previous year. As a result, earnings per share (EPS) fell to Tk 0.23, compared to Tk 1.28 (restated) in 2023.
Despite posting a profit, the board of the bank at a meeting on Thursday did not declare any dividend for its shareholders. Officials attributed this to compliance with the Bangladesh Bank's strict rules on dividend declarations.
As per the central bank's current regulations, the banks which have taken deferral facilities for meeting their provision shortfalls will not be allowed to pay dividends for 2024 onwards.
The central bank issued a circular regarding the restrictions in March this year. Following the restrictions, 18 listed banks out of 36, including Rupali Bank, are barred from paying dividends due to their fragile financial health.
Rupali Bank has availed Tk 153.75 billion deferral facilities for provisioning against non-performing loans by the central bank, according to its earnings note.
In 2023, the bank paid a 5 per cent stock dividend.
Following the news of no dividend, the bank's stock price fell 2.33 per cent to Tk 16.8 on the Dhaka Stock Exchange on Thursday.
The bank's net operating cash flow per share, a measure of a company's ability to generate cash from its operations, turned negative to Tk 8.06 per share, from Tk 105.06 (restated) the previous year due to increased loans and advances.
The net asset value, which refers to the excess of total assets over total liabilities, stood at Tk 34.97 per share as against Tk 35.14 (restated) the previous year.
The bank's annual general meeting (AGM) will be held on August 27 while the record date is set on July 15.
Meanwhile, Rupali Bank's first quarter (January-March 2025) profit also dropped 72 per cent year on year to Tk 63.4 million because of similar reasons.
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