Dutch-Bangla Bank’s net profit jumps 59%

The Dutch Bangla Bank Ltd's (DBBL) net profit rose 59 percent in the first quarter of the 2020 financial year even in the midst of the novel coronavirus pandemic.

According to the first quarter's unaudited financial statement – which was disclosed on Tuesday evening – the bank made a net profit of Tk75.50 crore in the first three months of the current year and its earnings per share (EPS) was Tk1.59. During the same period in the previous year, the net profit of the bank was Tk47.50 crore and its EPS was Tk0.95.

A senior official at the private lender, wishing anonymity, said the banking sector has been under pressure. Since late last year, it has been tasked with reducing both the interest rate – to single digits – and the number of high default loans.

"Despite that, we have been able to maintain our growth. However, it will be difficult for us to maintain the growth in the coming days," he told The Business Standard.

The bank official spoke of three challenges ahead for the banking sector – implementing the single-digit interest rate, private sector's slowdown and impact of the coronavirus.

The bank recommended 30 percent cash dividend to its shareholders for the 2019 financial year.

However, according to a Bangladesh Bank circular, banks can declare highest 15 to 30 percent dividend including 7.5 to 15 percent cash as per their ability while maintaining some other obligations for the 2019 financial year. Now the DBBL has to revise the decision it declared earlier.

The paid-up capital of the DBBL, which was listed on the country's share market in 2001, is Tk500 crore.

Sponsors and directors hold 86.99 percent, institutional investors 3.99 percent, foreign investors 0.02 percent, and general investors 9 percent of the bank's shares.

The closing price of the bank's each share was Tk56.90 at the Dhaka Stock Exchange on Wednesday. The shares hit the highest price of Tk79.60 last year.

The bank was established as a joint venture company at the initiative of the Netherlands Development Finance Company. However, Netherlands Finance sold all of its shares last year.

Horizon Associate Ltd, a little-known company, bought the shares.

Abdus Salam and Abedur Rashid Khan – two sponsor directors of the bank – also transferred their total holdings of 5.59 crore shares to Horizon Associate in 2019.

After purchasing the Netherland Finance's stake, the total holdings of Horizon Associate stood at 12.12 percent of the bank.