Rupali Bank profit drops 83% in April-June

Rupali Bank, the lone state-owned bank listed on the stock market, reported an 83% drop in profit in the second quarter of 2025 due to lower interest income and a rise in non-performing loans.

According to a price-sensitive statement filed with the Dhaka Stock Exchange (DSE) today (21 July), the bank's consolidated earnings per share (EPS) stood at Tk0.07 for the April–June quarter, significantly down from Tk0.42 in the same period of the previous year.

In the first half of 2025, its consolidated EPS fell to Tk0.20 – a 78% decline from Tk0.89 during the same period last year.

Rupali Bank shares were not traded today due to the record date for an extraordinary general meeting, which has been scheduled to seek shareholder approval for issuing shares to the government against share money deposits.

In its statement, the bank said the decline in interest income during the first half of the year was mainly due to an increase in classified loans, which significantly impacted profitability.

In its audit report for 2024, Rupali Bank's auditors – MABS & J Partners and A Wahab & Co – stated that the bank failed to recognise required provisions amounting to Tk15,375 crore during the year. The non-recognition of this shortfall had a consequential impact on the bank's reported net profit, liabilities, and shareholders' equity.

The auditors noted that although the Bangladesh Bank allowed Rupali Bank to prepare its financial statements for 2024 without recognising the provision shortfall – citing insufficient profit – the move was not consistent with the relevant international financial reporting standards.

Due to the provision shortfall, the bank did not recommend any dividend for shareholders for the year.

Rupali Bank's consolidated profit after tax dropped sharply to Tk11.22 crore in 2024, down from Tk62.46 crore in the previous year. As a result, its earnings per share fell to Tk0.23 from Tk1.28 (restated) a year earlier.

By the end of 2024, the bank's non-performing loans had surged by 113% to Tk21,357 crore, accounting for 41.6% of its total disbursed loans.

Rupali Bank has disclosed the names of its top loan defaulters in its audited financial report for the previous year.

According to the report, Blue Planet Group topped the list with defaulted loans amounting to Tk1,029 crore, followed by Beximco Group with Tk986 crore and Bangladesh Sugar and Food Industries Corporation with Tk907 crore.

Meanwhile, the bank has decided to issue 45.33 crore shares in favour of the government at Tk15 each – including a Tk5 premium – against share money deposits, in line with a directive from the Financial Reporting Council (FRC).

In a disclosure to the DSE on 30 June, the bank said it would seek shareholder approval at an extraordinary general meeting scheduled for 27 August, with the record date set for 21 July.

Following shareholder approval, the share issuance will require final clearance from the Bangladesh Securities and Exchange Commission (BSEC).

According to a bank source, the government's stake will increase to 95%, up from 90.19%.

Earlier, in March last year, the bank received approval from the finance ministry to issue the shares in favour of the secretary of the Finance Division.