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The Premier Bank posted 36 per cent unrealised losses after investing Tk 287 crore in stocks in 2021.
It faced the unrealised losses as the value of its portfolio dropped to Tk 211 crore during the period, according to its latest annual report.
However, the bank logged Tk 39 crore in realised profits, which was Tk 18 crore during the period.
Premier Bank made investments in 94 listed companies through the Premier Bank Securities Ltd – a majority-owned subsidiary of the bank that incorporated as a private limited company back in 2010.
As of 2021, the bank held 41 lakh shares of Runner Automobile, 31.94 lakh shares of National Bank, more than 19 lakh shares of ADN Telecom, 16 lakh shares of Titas Gas, 12 lakh shares of Asia Pacific General Insurance, 12 lakh shares of Bangladesh Submarine Cable Company.
Speaking to The Business Post, Premier Bank’s Company Secretary Mohammad Akram Hossain said, “The stock market is volatile. Amid such a difficult situation, the Premier Bank made Tk 39 crore in profits from the stock market.
“We have unrealised losses, but this will be recovered once the stock market bounces back.”
Its net profit stood at Tk 326 crore in 2021, up from Tk 206 crore in 2020.
NPLs rise to Tk 681cr
Premier Bank’s non-performing loans (NPLs) stood at Tk 681 crore in 2021, an increase of 27 per cent from Tk 535 crore seen a year earlier, according to the report.
On the NPLs, Akram said, “NPLs in the banking sector grew because the Bangladesh Bank did not take adequate measures amid the Covid-19 crisis. Many good customers failed to pay loan installments during the pandemic period.”
“Under the circumstances, NPLs rose to 6 per cent in 2019, but dropped to 2.53 per cent in 2020. We have implemented initiatives to reduce the volume of NPLs. Next year, it will go down even further.”
Return on investments decline
Premier Bank’s return on investments has declined to Tk 471 crore in 2021, down from Tk 530 crore in 2020.
During this period, the bank’s earnings from Treasury Bills, Bonds, Corporate Bonds and Peripheral Bonds declined compared to the previous year, but profits climbed from dividend income, investment in government securities and sales of shares.
In the last year, foreign investors at the individual level reduced their investment in Premier Bank’s shares. At the same period, corporate-level foreign investors increased their share sales. Non-resident Bangladeshis also acted the same way.
Provision savings increase
Premier Bank had a provision of Tk 167 crore in 2021 against advances and loans. In 2020, the provision had to be Tk 156 crore. As a result, the bank's provision savings have increased by 8 per cent during this period.
The bank increased its investment in Islamic banking by 106 per cent in 2021 when compared year-on-year. It invested Tk 290 crore in government Islamic bonds during that period, compared to Tk 140 crore in 2020.
In 2021, the bank disbursed Tk 8,104 crore in loans to 17 organisations. Of the amount, some Tk 872 crore was sanctioned to Shasha, followed by Tk 646 crore to Western Engineering (Pvt) Ltd., Tk 579 crore to Jaj Bhuiyan, Tk 567 crore to Abdul Monem Ltd, Tk 555 crore to Dyeing, Printing and Finishing Ltd and Tk 526 crore to Meghna.
The Premier Bank has Tk 2.59 crore in unclaimed cash dividend.
