BSEC seeks explanation from three banks

Bangladesh Securities and Exchange Commission (BSEC) has sought explanations from three banks—Rupali Bank, National Bank and ICB Islamic Bank—for unjustified dividend declarations last year.

The stock market regulator has moved on unjustified dividend declarations by the listed banks as two have recently declared no dividend for their shareholders while many others have declared bonus dividends without proper reason.

The BSEC issued separate letters to the banks’ managing directors on Monday in this regard. 

Publicly traded National Bank and ICB Islamic Bank’s boards have declared no dividend for their shareholders for the year ended on 31 December 2021.

Besides, the Rupali Bank’s board of directors recommended 2 per cent stock dividend for the year.

The stock market regulator served the showcase notice for explanations at BSEC Bhaban the next week.

A top official told the Business Post that, for the greater interest of the investors, the banks should explain and justify their position with relevant papers and documents regarding the above-mentioned issue in person at the commission along with any member of the Board of Directors, Company Secretary and Chief Financial Officer.  

Rupali Bank- a state-owned bank - reported consolidated earnings per share (EPS) of Tk1.10 for the year ended on 31 December 2021 against Tk0.45 (Restated) for the same period of the previous year.

The bank also informed that through Dhaka Stock Exchange website, bonus shares were recommended to strengthen the capital base of the bank to support business growth and maintained capital to Risk Weighted Assets Ratio (CRAR) as Bangladesh Bank guideline.

Bonus dividend was declared out of current year’s profit and retained earnings not from revaluation reserve or any unrealized gain or share money deposit, it also said.

National Bank- a second-generation bank - recommended no dividend for the year ended on 31 December 2021.

The bank also reported consolidated EPS of Tk0.12 for the year against Tk1.12 (restated) for the same period of the previous year.

Another second-generation private bank ICB Islami Bank saw losses more than double in 2021 to Tk39.22 crore from Tk18.61 crore a year ago.

Its loss per share for the last year stood at Tk0.59, which was Tk0.28 in the previous year.

The bank was formerly known as Oriental Bank Limited, which was incorporated in 1987. ICB Islami Bank got listed on the Dhaka bourse in 1990.