Rupali Bank's profit slashed by 83pc on negative interest income

Rupali Bank's profit plunged 83 per cent year-on-year to Tk 34.16 million in the second quarter through June this year as operating income declined sharply.

The lone listed state-run lender's consolidated earnings per share stood at Tk 0.07 for April-June, reduced from Tk 0.42 (restated) for the same quarter a year ago, according to a stock exchange filing on Monday.

The bank's half-yearly profit also plummeted 77 per cent year-on-year to Tk 98 million in January-June this year.

Rupali Bank earns less in interest from loans than what it pays to its depositors, leading to a negative net interest margin.

Only investment income from Treasury bills and bonds, income from private bonds, dividends from shares and brokerage commission have kept the bank's earnings in the green territory.

Rupali Bank has very high non-performing loans and so provisions kept for those loans also ate up part of the thin operating income.

Consolidated earnings per share for the January-June period stood at Tk 0.20, down from Tk 0.89 for the same period last year.

"EPS decreased due to decrease in total operating income," the company said in a stock exchange filing on Monday.

However, net operating cash flow from operations has improved significantly. Last year the bank reported net operating cash flow per share of Tk 3.69, which improved to Tk 139.11 in January-June this year.

Cash flow increased due to higher deposits from customers, the bank said.

The stock price of Rupali Bank remained unchanged at Tk 22.10 per share on the Dhaka Stock Exchange (DSE) on Monday.

Annual profits of Rupali Bank have been gradually falling. In 2023, profit was Tk 626.68 million, which fell 82 per cent to Tk 113.92 million in 2024.

Meanwhile, Rupali Bank is undergoing a process to issue ordinary shares worth Tk 6.80 billion against funds received from the government as share money deposits.

The outstanding amount of such share money deposits stands at Tk 6.80 billion as of March this year, according to the lender's latest financial statements.

The bank will issue 453.33 million shares at Tk 15 each, including a premium of Tk 5 per share, in favour of the secretary of the finance division.

The bank called an extraordinary general meeting (EGM) on August 27 to get shareholders' approval.

The ordinary share issuance is poised to substantially boost the bank's existing paid-up capital, as these shares will be added to the existing shares.

Currently, the company's number of shares is 488 million, which will go up to 941 million after the issuance of fresh shares.

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