BRAC Bank posts Tk138cr profit after tax in third quarter

BRAC Bank posted upbeat financial results for the third quarter (Q3) of 2021 on 8 November with a profit worth Tk138 crore.

The Bank registered a Net Profit After-Tax (NPAT) of Tk138 crore with a growth of 8% compared to the same quarter of 2020 (YoY) on standalone basis. On a consolidated basis, i.e., with all its subsidiaries, the NPAT stood at Tk123 crore with YoY decrease of 14%, reads a press release.

The bank's Q3 earnings were announced on a virtual event attended by local and foreign investment analysts, portfolio managers and capital market experts and the bank's stakeholders.  

BRAC Bank's Managing Director and CEO Selim RF Hussain, DMD and Chief Financial Officer M Masud Rana FCA, DMD and Chief Operating Officer Md Sabbir Hossain, DMD and Head of Corporate Banking Tareq Refat Ullah Khan, DMD and Head of SME Syed Abdul Momen, Head of Retail Banking Md Mahiul Islam and Head of Treasury and FIs Md Shaheen Iqbal and Head of Credit Risk Management Ahmed Rashid Joy presented the financial results and outlined the Bank's strategy. 

BRAC Bank's Managing Director and CEO, Selim RF Hussain said, "BRAC Bank's key financial indicators are showing sign of returning to normalcy and catching up business momentum. Retail business led the revenue stream driving growth of loans and advances by 5 per cent. Non-funded income, net interest income and CASA mix improved further showing a silver lining for the bottomline." 

"Rise in RoE, RoA and CAR manifests the bank's strong fundamentals and financial stability, a solid backbone the shareholders can keep their trust on. S&P's upholding of 'B+' credit rating for five consecutive years despite unprecedented challenges shows real strength that sets BRAC Bank apart in Bangladesh banking industry," he added.

A Q&A session was conducted at the end of the disclosure event.

Highlights of the Bank's Q3 2021 performance are:

• Earnings per Share (EPS) stood at BDT 0.99 on a standalone basis and BDT 1.02 on a consolidated basis. 
• Loans and advances grew by 5 per cent compared to December 2020 in line with strategic direction, led by retail business while the Bank was very selective in growing loans in the Corporate and Commercial Businesses.
• Customer Deposits decreased by 4 per cent compared to December 2020 with a conscious effort to use funding base optimally. However the CASA mix further improved to 59% at the end of Q3 2021 which was 53% in December 2020.
• The Bank achieved good growth in non-funded businesses in 2021 namely Acceptances, LC issuance and bills collection showed very encouraging growth of 50%, 70% and 19% respectively compared to December 2020.
• Compression in interest margin continued throughout the entire banking industry after the introduction of lending rate cap at 9 per cent in April 2020 and newly implemented minimum interest rate on deposit. Despite this, BRAC Bank ended the third quarter with 54% YoY growth in net interest income well supported by excellent Cost of Deposit Management.
• BRAC Bank's standalone and consolidated Cost to Income Ratio (CIR) in Q3 2021 improved compared to Q3 2020: 52% & 67%. Both the YoY Return on Equity (RoE) and Return on Assets (RoA) improved in Q3 2021. In Q3'21, RoE and RoA were as follows:
  • Standalone BRAC Bank :     RoE 12.0 per cent, RoA 1.4 per cent
  • Consolidated Entity :     RoE 11.0 per cent, RoA 1.2 per cent
• The Bank's Q3'21 Non-Performing Loan (NPL) ratio was 3.6 per cent, up by 0.4 per cent YoY, while the NPL coverage ratio slightly decreased to 145% from 151%. 
• BBL reported a consolidated Capital Adequacy Ratio (CAR) of 14.2 per cent for Q3'21 with 91 per cent Tier-1 Capital, the one of the highest Tier-1 capital ratio in the industry. The Bank's standalone CAR, at 14.6 per cent, is also well above the 12.5 per cent regulatory requirements.
• The net asset value (NAV) per share, as at September 2021, stood at BDT 35.2 on a consolidated basis and at BDT 34.1 on a standalone basis.