Rupali Bank reports Tk15,375cr provision shortfall, no dividend for 2024

Infographic: TBS

State-owned Rupali Bank has reported a massive provision shortfall of Tk15,375 crore as of 31 December 2024, prompting its board of directors to withhold any dividend declaration for the year.

According to a bank's disclosure, a sharp decline in profit and its failure to meet the required provision levels under Bangladesh Bank's policy were the main reasons behind the decision. The central bank's strict guidelines bar banks from declaring dividends if they fail to maintain adequate provisions against loans or have taken deferral facilities.

Following the financial disclosure, Rupali Bank's share price fell by 2.33% today (31 May), closing at Tk16.80 on the Dhaka Stock Exchange (DSE).

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

The bank's annual general meeting (AGM) has been scheduled for 27 August 2025, with the record date set for 15 July 2025.

Additionally, the bank's Net Operating Cash Flow per Share declined due to a significant increase in loans and advances during the year, which negatively impacted total operating income.

In the first quarter of 2025 (January-March), the bank reported a consolidated net profit of Tk6.34 crore, significantly down from Tk22.93 crore in the same period of 2024. The EPS for the quarter also dropped to Tk0.13, compared to Tk0.47 a year earlier. As of March 2025, the bank's net asset value per share stood at Tk35.18.

Under Bangladesh Bank's directives, banks that fail to meet required provisions or opt for deferral facilities are prohibited from distributing dividends. For instance, Al-Arafah Islami Bank was instructed to maintain a provision of Tk6,358 crore but retained only Tk2,400 crore, deferring the remaining amount. As a result, it also did not declare any dividend.

Rupali Bank, facing a much larger provision shortfall, has similarly been disqualified from issuing any form of dividend to shareholders for 2024.

According to data from the Dhaka bourse, 36 banks are currently listed on the stock market. Among them, more than a dozen financially sound banks have declared dividends for the year 2024.

However, nearly two dozen financially troubled banks have not declared any dividends, having failed to comply with the central bank's dividend policy.

The DSE also reported that many of these banks announced board meetings to approve their financial reports and declare dividends, but postponed them several times. Although banks are required to publish their annual financials and declare dividends within 120 days of the year's end, the finance ministry has extended the deadline until 31 May with its approval.