Banks bag operating profits in bygone year

A number of commercial banks posted EBIT or operating profits in the adversity-fraught bygone year, in a significant growth amidst a series of loan-related scams in the country's banking system.

EBIT (Earnings Before Interest and Tax) or operating profits is one of the key indicators for measuring financial health of any institution.

Both public and private commercial banks saw their operating profit grow substantially in the just-concluded calendar year for lower cost of funds and private-sector- credit growth, sector insiders say.

The FE collected unaudited operating-profit figures of 12 banks, out of a total of 61, before the sun set for the year 2022.

Of the dozen, Rupali Bank Limited tops the list posting over 43-percent  growth. Its earnings rose to Tk 2110 million in 2022 from Tk 1470 million a year before.

Union Bank stood second with a 25-percent growth as the private commercial bank earned operating profits amounting to Tk 4,500 million in the just-past year against Tk 3,600 million earned a year ago. Sonali Bank Limited becomes third-largest profit-earning bank recording Tk Tk 25,000 million in 2022 in a rise from Tk 20,900 million a year before. The growth is around 20 per cent.

Jamuna Bank Limited secured 18.57-percent growth in making operating profit of Tk 8,300 million in 2022 against Tk 7,000 million earned in the previous year.

Earning EBIT of Tk 8,450 million in 2022, Mercantile Bank Limited got positioned in the fifth position with a 17-percent growth. In 2021, the bank's operating profit was recorded Tk 7,220 million. Southeast Bank Limited managed to bag over 11-percent growth in the past calendar year with Tk 11,300 million earned as operating profit. In 2021, the figure was Tk 10,160 million.

Social Islami Bank Limited (SIBL) earned Tk 5,500 million as operating profits in 2022 and the figure jumped by Tk 500 million from the 2021 earnings.

Islami Bank Bangladesh Ltd (IBBL) registered unaudited profit worth Tk 26,460 million, up by around 9.0 per cent from the previous year's Tk 24,300 million.

Operating profits of Al-Arafah Islami Bank Limited increased by Tk 500 million to Tk 8,100 million in 2022 while NRBC's unaudited profit shot up by Tk 50 million to reach 4550 million in 2022.

However, South Bangla Agriculture and Commerce Bank Limited (SBAC) recorded negative growth as the bank's operating profit plummeted to Tk 2,000 million in 2022 compared with previous year's earnings of Tk 2100 million.

Some banks have yet to complete calculation of their annual accounts because the central bank recently relaxed the loan-repayment policy for all the sectors to expedite the country's economic recovery from the disruptions caused by the ongoing war in Europe.

"We're still working on the matter," a senior official at a PCB said in replying to a query.

He also said such policy relaxations also helped improve the operational profit of the banks.

Another top executive of another PCB said they cannot make much profit because of two factors - dollar appreciation amid the greenback shortfall and government belt-tightening measures. To meet foreign- currency obligation, he said, all the banks were forced to buy dollar at higher rates to clear import bills that ate up a portion of their profits while austerity measures to protect the reserves compelled them not to go for import.

However, he was very optimistic, saying that the unofficial withdrawal of lending-rate cap from the consumer's credits would help boost profitability of the banks in the days ahead.

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