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The shareholders of Rupali Bank Ltd approved ‘no’ dividend for the year ended on December 31, 2019 in its 34th annual general meeting (AGM) held on Thursday.
The board of directors of the state-owned Rupali Bank declared 5.0 per cent stock dividend on June 28 and the proposal was sent to Bangladesh Bank for regulatory approval.
But, the central bank has turned down the Rupali Bank’s proposal of issuing stock dividend, considering its financial strength.
Later, the issue had been placed before the 34th AGM for approval and final decision of the shareholders.
The AGM was held on Thursday where the shareholders approved ‘no’ dividend, according to an official disclosure on Sunday.
In May, the central bank imposed certain conditions on the banks’ dividend declaration to keep the banks’ liquidity flow and capital base strong in the wake of the deadly Covid-19 outbreak.
As per the central bank’s direction, a bank can declare a maximum 30 per cent dividend with cash and stock dividend combined, but it cannot pay more than 15 per cent cash dividend.
Besides, it was also directed that the banks would not distribute the declared cash dividends among the directors and institutional investors until September 30, 2020.
The Rupali Bank’s earnings per share (EPS) stood at Tk 1.38 for the year ended on December 31, 2019. But that year the bank faced a huge cash crisis. Following this crisis, its net operating cash flow per share stood at Tk 75.30 in the negative.
A Bangladesh Bank official said the Rupali Bank has provision shortfall against classified loans and it has an operating cash crisis. That is why the central bank did not approve its dividend.
However, in the first half of this year, the Rupali Bank did well in its business. The bank posted earnings per share of Tk 0.37, which was 48 per cent higher than the previous year’s same period.
In this period the bank also overcame the cash crisis. Its net operating cash flow per share stands at Tk 74.54 for January-June 2020 as against negative Tk 89.33 for January-June 2019.
In a disclosure the bank informed that NOCFPS increased significantly as deposits increased by Tk 58.14 billion and loans and advances increased by Tk 12.78 billion in 2nd quarter 2020.
In 2018, the Rupali Bank disbursed 10 per cent stock dividend.
Each share of the bank, which was listed on the Dhaka bourse in 1986, closed at Tk 29.80 on Thursday, soaring 22 per cent within a month since August 3.
Its share traded between Tk 22.50 and Tk 34.70 in the last one year.
The bank’s paid-up capital is Tk 4.14 billion and authorised capital is Tk 7.0 billion while the total number of securities is 414.16 million.
The government owns 90.19 per cent stake in the bank, while the institutional investors own 4.79 per cent and the general public 5.02 per cent as on July 31, 2020, the DSE data shows.