Exchange gains earn Rupali Bank 80% increase in profit

State-owned Rupali Bank has achieved remarkable profit in the first quarter of this year, primarily attributed to various commission incomes, the sale of dollars, and other fees, despite interest income being the main source of revenue for banks.

The bank’s profit for the January-March quarter reached Tk 17.4 crore, marking an 83.5% increase from Tk 9.7 crore during the same period last year. Earnings per share (EPS) rose to Tk 0.38 in Q1 of 2022, compared to Tk 0.21 in the corresponding period of the previous year. This information was obtained from the bank’s financial statement published on Wednesday.

In its disclosure to the Dhaka Stock Exchange, the listed bank stated that the increase in EPS was driven by the rise in total operating income. According to the financial statement, the bank’s interest income during the January-March period this year amounted to Tk 682 crore. However, interest payments against deposits during the same period reached Tk 734 crore, resulting in a net interest income of negative Tk 52 crore. In the corresponding period of the previous year, the net interest income was negative Tk 106 crore.

On the other hand, the bank experienced a significant increase in operating income, particularly from various commissions, dollar sales, and brokerage commissions, which almost quintupled.

During January-March of the previous year, the income from these sources was only Tk 11.33 crore, whereas it reached Tk 54.72 crore during the same period this year.

Industry insiders attribute this surge to the profit banks have made by selling the US dollar amidst the ongoing USD crisis.

The financial statement also reveals that Rupali Bank gained Tk 36.64 crore by selling USD during the January-March period of this year, while it incurred a loss of Tk 97 lakh in the same quarter of the previous year.

The DSE disclosure mentions that the increase in net operating cash flow is due to the rise in loan disbursement. Analysis of the financial statement finds loan disbursement increased by 62%, reaching Tk 1,310 crore in the January-March quarter. However, the amount of deposits decreased by Tk 3 crore to Tk 845 crore year on year.

Rupali Bank is burdened with defaulted loans and faces a capital shortfall due to its inability to recover these loans.

As of the end of the first quarter of this year, the bank’s defaulted loans amounted to Tk 7,585 crore, while the capital shortfall at the end of December last year was Tk 3,739 crore.

The statement shows that Tk 20 lakh in written-off loans was recovered during the Jan-Mar quarter of this year, compared to Tk 13 lakhs in the same period last year.