BRAC Bank’s net profits decline 20%

BRAC Bank’s net profit (solo) went down by 20 percent to Tk 454 crore in 2020, mainly due to maintaining a big sum for loan-loss provisioning.

The bank has kept aside Tk 300 crore for provisioning against bad loans.

Its earnings per share (EPS) stood at Tk 3.42 and net asset value (NAV) per share at Tk 36.63 during the period, according to the bank’s financial results presented by its Managing Director and CEO Selim RF Hussain at a virtual platform on Wednesday.

The bank’s board of directors has recommended a 10 percent cash dividend and 5 percent stock dividend for 2020. Its Annual General Meeting is scheduled for May 27, 2021.

It also reported that the private lender’s customer deposits grew by 9 percent year-on-year. The bank’s non-performing loan ratio dropped to 2.9 percent in 2020.

The bank’s SME lending grew by 17 percent year-on-year despite capping the lending rate at 9 percent.

“We could have avoided the provision and shown inflated profits. But our professional board of directors wants us to maintain the loan-loss provisioning strictly,” said a senior official of the bank.

Due to the Covid-19 pandemic for over a year, Bangladesh Bank has relaxed the provisioning rules for banks as many clients have been affected and failed to repay loans regularly.