Navigating economic storms, Premier Bank displays stellar show in 2022

In the midst of several challenges for the banking sector, Premier Bank achieved an excellent profit growth of 23.26 per cent in the year ending in December 2022 over the previous year.

The publicly traded lender’s annual net profit surged to Tk 403 crore in 2022 from the profit of Tk 326.9 crore a year ago, as per the lender’s latest annual financial report obtained by The Business Post.

The global economic turmoil, particularly in banks and financial institutions, had far-reaching consequences for the economy as a whole last year, resulting in a supply-demand imbalance, an unstable foreign exchange market, and rapid increase in commodity prices.

The bank, however, had shown remarkable tenacity and resilience, and concluded the year with respectable growth.

The bank’s operating profit reached a record high of Tk 988 crore in 2022, representing a significant 17.78 per cent surge from Tk 838 crore a year back.

Explaining the reasons behind last year’s stellar performance, Premier Bank officials with knowledge of the matter said the bank could show stable financial performance in 2022 due to some factors— significant recovery from stuck-up loans, maintaining a healthy deposit mix, and bringing down the number of loss-making branches.

Premier Bank in 2022 witnessed a jump of 12.53 per cent in total risk-weighted assets, which rose to Tk 28,087 crore from Tk 24,960 crore in the previous year.

Moreover, the lender’s total customer liability jumped by 10 per cent to Tk 29,643 crore in 2022 from Tk 26,880 crore in the previous year.

The listed bank’s nonperforming loans also slightly increased, with Tk 768 crore in 2022 compared to Tk 682 crore in 2021, accounting for 3.04 per cent of the total risk assets portfolio.

M Reazul Karim, managing director, and chief executive officer (CEO) of Premier Bank, said they were slightly impacted by the global economic crisis as well as foreign exchange volatility last year.

“Despite the dollar crisis, which hindered other banks’ ability to open letters of credit (LCs), Premier Bank capitalised on its substantial import-export surplus.”

“This advantage allowed us to benefit from exchange rate volatility when the dollar value rose,” Reazul Karim added.

The publicly traded bank paid 12.50 per cent cash and 7.50 per cent stock dividends for the year ending in December 2022.

The private commercial bank’s consolidated earnings per share rose to Tk 3.42 in 2022 from Tk 2.86 in the previous year.

The bank’s non-performing loans (NPL) remained well below the industry benchmark at 3.04 per cent of the total loan outstanding at the end of the year 2022, thanks to stringent evaluation and monitoring of the lending portfolio, coupled with a robust collection drive.

Meanwhile, the listed lender’s deposits grew by 10 per cent to Tk 29,644 crore in 2022, while its lending portfolio expanded by 5.89 per cent to Tk 26,455 crore.

Premier Bank logged an operating income of Tk 1830 crore in 2022, recording an impressive growth of 25.63 per cent over the previous year.

The bank’s net interest income stood at Tk 488 crore in 2022. Additionally, income from fees, commissions, and other operating sources amounted to Tk 1039 crore, contributing to 56.78 per cent of the total operating income.

It is here worth noting that the bank’s operating income per employee increased to Tk 38.5 lakh in 2022 from Tk 36.7 lakh in 2021.

Looking ahead, Premier Bank is committed to advancing its technological capabilities to enhance customer experiences. The bank also plans to integrate bKash-linked accounts, streamlining transactions for customers.

Furthermore, the listed bank intends to implement e-KYC account opening through web and app platforms, while also exploring the integration of the National Payment System Bangladesh for pMoney and QR code payment options.

Premier Bank Securities Ltd (PBSL), a wholly owned subsidiary of Premier Bank Ltd, also demonstrated strong performance in 2022.

With five branches in Dhaka and Chattogram, PBSL earned Tk 14.3 crore in interest income and recorded a commission income of Tk 14.3 crore in 2022.