25 listed banks to pay Tk 2,265cr cash dividend

Cash dividends amounting to Tk 2,265 crore will be paid to shareholders by 25 banks listed at the stock exchange amid the ongoing liquidity crisis in the capital market.

Banks have already announced dividends and they will be distributed after approval at the Annual General Meeting (AGM) of the banks.

This information was obtained from the data published by Dhaka Stock Exchange (DSE) and analysis reports of financial accounts of banks.

The boards of 25 out of 30 banks listed with the capital market have declared cash or partial cash dividends. The total declared cash dividend amounts to Tk 2,265 crore.

However, this year, only AB Bank, IFIC Bank, Rupali Bank and First Security Islami Bank have announced bonus shares. The loss-making ICB Islamic Bank did not declare dividend.

Islami Bank will pay the highest cash dividend of Tk 161 crore to shareholders. Prime Bank will pay the second highest cash dividend of Tk 152.86 crore. Citibank will pay the third highest cash dividend of Tk 152.46 crore.

However, a directive of Bangladesh Bank has imposed restriction on cash dividend higher than  15 percent therefore several banks will have to curtail their dividend this year despite announcement. 

Eastern Bank, Dutch-Bangla Bank and NCC Bank have declared cash dividend of more than 15 percent before the issuance of Bangladesh Bank's directive. Eastern Bank declared 25%, Dutch-Bangla Bank 30% and NCC Bank 17% cash dividend. 

Directors of banks and entrepreneurs hold 40.34 percent shares of the listed banks, which entitles them to get a total cash dividend of Tk 913.66 crore. Institutional and general investors will get the remaining Tk 1,351.23 crore.

Shakil Rizvi, director of the Dhaka Stock Exchange (DSE), said, “Cash dividend offered by banks is positive news for investors. It was necessary and it will create a momentum in the market.”

Bangladesh Merchant Bankers Association (BMBA) president Sayedur Rahman said some banks have declared cash dividends higher than expected which is good news for the stock market.

However, many are sceptical that coronavirus crisis will cause a collapse in banking profits. In fact, the bank's interest calculation has not stopped which is the main source of profit of the banks.