Home ›› 29 Jun 2022 ›› Stock
State-owned Rupali Bank Limited has never given any cash dividends to its investors since 1986 when it was listed on the stock exchanges.
Frustrated with the bank’s failure in paying the dividend payouts for a long period despite sitting on cash, the Bangladesh Securities and Exchange Commission (BSEC) on Sunday once again instructed the bank to explain it within five working days.
It wrote to the Rupali Bank managing director to provide relevant papers and documents within the deadline.
According to the BSEC, the bank increased its paid-up capital by nearly 140 percent over the last decade by issuing stock dividends.
On June 13 this year, the stock market regulator served a show-cause notice on the bank for not paying any cash dividends since its listing. In response, the bank’s representatives failed to answer.
The bank has maintained a provision of Tk 2064.07 crore classified loans and advances, which has a detrimental effect on financial disclosure such as NAV, EPS, etc, and is also a matter of great concern for investors, according to the BSEC.
The bank reported consolidated earnings per share (EPS) of Tk 1.10 for the year ended December 31, 2021, against Tk 0.45 (restated) for the same period a year earlier. The bank’s board of directors recommended a 2 per cent stock dividend for the year.
“Bonus shares were recommended to strengthen the capital base of the bank to support business growth and maintain the capital to risk-weighted assets ratio as per Bangladesh Bank guidelines,” said the bank in a regulatory filing earlier.
It also stated that the bonus dividend was declared from the current year’s profit and retained earnings, rather than from the revaluation reserve or any unrealized gain or share money deposit.
Rupali Bank has been giving bonus dividends since 1986, according to the Dhaka Stock Exchange.
Rupali Bank Managing Director and CEO Md Obayed Ullah Al Masud and its Company Secretary Mohammad Najmul Hoda were not available for comments.
The bank is a profitable entity of the government.
It has around Tk 690 crore in surplus reserves but has been saddled with a large number of defaulted loans, according to the Bangladesh Bank data.
Rupali Bank’s default loans stood at Tk 3,972 crore, including Tk 3,825 crore in bad loans. Its paid-up capital is Tk 455 crore. The nature of bad loans makes it difficult to recover, the BB data showed.
In the first half of 2021, its total operating income was Tk 581.85 crore, up 9 per cent from the same period a year ago.
On Tuesday, the bank’s share price fell 1.15 per cent to Tk 25.90 on the DSE.
