Dutch-Bangla Bank witnesses highest profit growth in a decade
Dutch-Bangla Bank PLC recorded nearly 42 percent growth in earnings last financial year, its highest in a decade, by improving asset quality and focusing on maintaining good corporate governance.
The private commercial bank said it made a profit of Tk 801 crore in the financial year 2023 compared to Tk 566 crore the year prior.
Dutch-Bangla Bank has recommended a 17.50 percent cash dividend and a 17.50 percent stock dividend -- the highest in five years -- for 2023, with investors reacting positively.
As such, shares of the bank rose 7.20 percent to Tk 58.10 at the Dhaka Stock Exchange (DSE) yesterday.
"We have gradually improved our asset quality and on-boarded good borrowers. We also focused on retail, small-and-medium enterprises, and home loans to diversify our portfolio," said Abul Kashem Md Shirin, managing director and CEO of Dutch-Bangla Bank.
As a result, the bank's ratio of non-performing loans declined to 4.16 percent by the end of 2023 from 4.29 percent the previous year -- half of the overall ratio of default loans at 9 percent of the total outstanding loans at the end of last year.
At the end of 2023, Dutch-Bangla Bank's total assets added up to Tk 59,388 crore, up 7 percent year-on-year. Its total loans and advances grew 13 percent to Tk 41,202 crore at the same time.
The bank's capital adequacy ratio against risk-weighted assets increased to 16.16 percent in the last financial year from 15.55 percent in 2022.
Shirin informed that Dutch-Bangla Bank had invested in technology to improve its services and overall performance.
"We have made good business through ATMs, CRMs, agent banking and sub-branch activities," he said. "Besides, support from our board and good governance contributed to the profit growth."
In a filing on the DSE yesterday, the bank said its board recommended bonus shares to increase its paid-up capital and to comply with a Bangladesh Bank directive in this regard.
However, it declared the cash dividend in line with the central bank directive on dividends.
"The retained amount will be used to strengthen the capital base, which helps to increase our business capacity," the bank added in its statement.
The private commercial bank also said the bonus shares have been declared out of the current year's profit.
The private bank's earnings per share rose to Tk 10.72 by the end of 2023 from Tk 7.57 previously.
However, Dutch-Bangla Bank's net operating cash flow per share slumped to Tk 13.02 last year from Tk 28.37 in 2022.
With a face value of Tk 10, shares of Dutch-Bangla Bank, which began its journey as a joint venture between Bangladesh and the Netherlands in 1995, were first listed with the DSE in 2001.
At the end of March 31 this year, sponsors or directors of the bank held 86.99 percent of its shares while general investors had 7.23 percent and institutional investors held the rest.