Bankers and experts said most of the listed banks’ earnings declined because of the latest government decision to fix interest rate on lending at 9% and 6% for deposits, effective from April 1
As many as 17 out of 30 publicly traded banks registered negative growth in their Earnings Per Share (EPS) in the first half (January-June) of 2020, compared to the same period last year.
According to banks’ disclosures posted on the Dhaka Stock Exchange (DSE) website, out of the 30 listed banks, 12 or 40% registered higher EPS, while 17 or 57% banks registered negative growth in the January-June period compared to the same period of previous year.
Talking to Dhaka Tribune, bankers and experts said most of the listed banks’ earnings declined because of the latest government decision to fix interest rate on lending at 9% and 6% for deposits, effective from April 1.
On the other hand, the ongoing Covid-19 pandemic affected the bank's profits, they added.
Managing director of Mutual Trust Bank and former chairperson of the Association of Bankers, Bangladesh (ABB) Syed Mahbubur Rahman told Dhaka Tribune that single digit rate on loans decreased banks' earnings.
”Due to the Covid-19 pandemic, business has slowed down from March, which has affected the banking sector. On the other hand, no new investment was made at this time,” he said.
The EPS is the company's profit allocated to each share of a listed firm, indicating a company's profitability.
However, analysts said the unaudited EPS of a company often does not reflect actual financial health of a listed firm, but indicates profitability that influences investors towards their long-term investment plans.
As per its unaudited financial statement for the January-June period of 2020, Brac Bank registered the highest fall by 53% in earnings and the EPS stood at Tk0.95, which was at Tk2.02 in the same period a year ago.
From January to June, Prime Bank’s EPS fell by 47%, The City Bank’s EPS declined by 42% compared to the same period last year.
EPS of IFIC Bank, Mercantile Bank, Pubali Bank, Standard Bank, Southeast Bank, The Premier Bank, UCB, Uttara Bank, Islami Bank, NCC Bank, First Security Islami Bank, Eastern Bank, Shahjalal Islami Bank and National Bank Limited also registered negative growth during the period.
On the other hand, the EPS of One Bank soared 124% to Tk1.03 in the January-June period against Tk0.46 in the same period last year.
Exim Bank's EPS rose 78% to Tk1.00, up from Tk0.56. Al Arafah Islami Bank’s EPS also jumped by 65% to Tk0.84 from previous Tk0.51.
According to DSE data, the EPS of AB Bank, Rupali Bank, Dhaka Bank, Trust Bank, Jamuna Bank, Dutch-Bangla Bank, Mutual Trust Bank, Social Islami Bank, Bank Asia Limited also rose in the first six months of the year compared to the same period last year.
ICB Islamic Bank has continued to incur losses. The bank's per share loss increased by 10% to Tk0.32 from Tk0.29.