Al-Arafah Bank's Q2 profit dips 9% on rising costs, lower investment income
The consolidated net profit for the April-June period fell to Tk83.24 crore.
Al-Arafah Islami Bank PLC has reported a 9% year-on-year decline in its consolidated net profit for the second quarter ended June 2026, primarily driven by a slump in investment income and a surge in operating expenses.
According to the bank's latest unaudited financial statements released today (2 August), the consolidated net profit for the April-June period fell to Tk83.24 crore, resulting in an earnings per share (EPS) of Tk0.72.
The bank's quarterly performance was weighed down by a significant contraction in non-core income streams. Revenue from investments in shares and securities dropped by 8% to Tk107 crore, while income from commissions, exchange, and brokerage fees saw a 5% decline, settling at Tk95.80 crore.
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Additionally, the bottom line was pressured by a spike in operating costs and adjustment in deferred tax.
Despite the weak quarterly performance, the bank posted modest growth in the first half of 2026. Its consolidated net profit rose 4% year-on-year to Tk99.44 crore for the January-June period.
Half-yearly earnings per share (EPS) stood at Tk0.86, while net asset value (NAV) per share was Tk21.81 as of 30 June.
In a price-sensitive disclosure, the bank said investment income remained relatively resilient compared with the previous year, although its cash flow position continued to face pressure.
The consolidated net operating cash flow per share for the first half was recorded at Tk7.63, a decrease the bank attributed to lower deposit growth compared to the same period in the prior year.
The market reacted negatively to the financial update, with Al-Arafah's share price dropping by 3.51% to settle at Tk16.50 on the Dhaka Stock Exchange (DSE) today.
The lender is currently classified as a 'Z' category or junk stock due to its failure to reward shareholders with dividends for two consecutive years.
This earnings report comes amid a major governance shift at the bank. In mid-July, Bangladesh Bank appointed 14 new directors, restoring control to the founding shareholders after nearly a year under an independent-director-led board.
The reconstituted 19-member board, which includes KDS Group Chairman Khalilur Rahman, has elected Badiur Rahman as chairman.
The restructuring marks a clear break from the previous management, when the board was chaired by a representative of the S Alam Group.
