Prime Bank secures record Tk700cr profit in 2024
The bank attributed this impressive growth to increased income from interest, investments, and commissions, as well as exchange and brokerage activities
Prime Bank – a second-generation private sector lender in the country – has achieved a milestone by reporting a consolidated net profit of Tk700 crore for the first time in 2024.
This marks a significant leap in the bank's financial performance, driven by strong growth across key income streams, according to insiders.
In a recent board meeting held on 13 March, the bank announced a 20% dividend proposal, its highest since 2011.
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The dividend comprises 17.50% cash and 2.50% stock, reflecting the lender's robust financial health and commitment to rewarding shareholders, according to its price-sensitive statement disclosed on its website.
According to the disclosure, Prime Bank's consolidated net profit surged by 52% to Tk732 crore in 2024, up from Tk481 crore the previous year. Consolidated earnings per share (EPS) also rose to Tk6.47 at the end of 2024, compared to Tk4.25 a year earlier.
The bank attributed this impressive growth to increased income from interest, investments, and commissions, as well as exchange and brokerage activities.
Additionally, Prime Bank clarified that the proposed stock dividend aims to strengthen its capital base, supporting future business expansion. It emphasised that the stock dividend was not drawn from capital reserves, revaluation reserves, or unrealised gains, ensuring compliance with regulatory standards.
Despite the surge in profits, Prime Bank experienced a 71% decline in consolidated net operating cash flow per share, which dropped to Tk2.90 in 2024. The bank explained that this was due to higher investments in loans, advances, and government securities compared to the previous year.
Prime Bank's consolidated net asset value (NAV) per share also saw a 15% increase, reaching Tk34.07 by the end of 2024. However, the bank has yet to release its full financial report, leaving a detailed earnings breakdown undisclosed.
The rising interest rates on government securities have prompted banks, including Prime Bank, to allocate more funds to this sector.
During the first nine months of 2024, Prime Bank invested Tk12,700 crore in government securities, a 58% increase compared to the same period the previous year.
Data from the Bangladesh Bank shows that interest rates on Treasury bills and bonds have risen significantly. For instance, in May 2024, rates increased by 25 basis points for 91-day Treasury bills to 11.60%, 40 basis points for 182-day bills to 11.80%, and 50 basis points for 364-day bills to 12%.
Similarly, the interest rate on five-year Treasury bonds rose by 30 basis points to 12.40%.
This upward trend in interest rates has proven lucrative for Prime Bank, which earned Tk693 crore from January to September 2024, an 83% increase compared to the same period in 2023.
The bank's interest income also climbed to Tk739 crore, partly due to a lower volume of classified loans, a challenge that has plagued many other banks in the sector.
Prime Bank's strategic focus on government securities and prudent financial management has positioned it as a standout performer in the banking industry, setting a new benchmark for profitability and shareholder value, according to market insiders.
Its share closed 0.82% higher at Tk24.60 at the Dhaka Stock Exchange.
