Six banks fail to pay dividends for 2024

Infographics: TBS

Despite closing 2024 with profits, six publicly listed banks have not declared any dividends for shareholders, citing compliance issues with the Bangladesh Bank's tightened policy.

The banks are – NRBC Bank, South Bangla Agriculture and Commerce (SBAC) Bank, Exim Bank, Standard Bank, Al-Arafah Islami Bank and ONE Bank.

According to sources, these banks failed to meet the central bank's dividend distribution guidelines issued on 13 March, leaving investors empty-handed.

In 2023, the banks had paid dividends to their shareholders ranging from 2% to 15%, according to data from the Dhaka Stock Exchange (DSE).

Disclosures of the banks published on the stock exchange's website on Thursday (29 May) show that five of the banks – NRBC Bank, South Bangla Agriculture and Commerce (SBAC) Bank, Exim Bank, Standard Bank, and Al-Arafah Islami Bank – experienced a significant decline in profits in 2024 compared to the previous year.

Only ONE Bank posted profit growth in 2024, but it too will not pay dividends to shareholders due to its failure to comply with the dividend policy. It published its annual financials on 26 May.

As an immediate effect of the annual corporate declarations published on Thursday, share prices of three banks — NRBC, Exim Bank, and Al-Arafah Islami Bank — fell by 3.08%, 7.14%, and 7.57%, respectively.

Share prices of the remaining two banks — SBAC Bank and Standard Bank — remained unchanged on Thursday.

According to DSE data, 36 banks are listed on the stock exchanges. Of the banks, over a dozen financially healthy banks have already declared dividend for their shareholders for 2024. 

Around two dozen financially trouble banks have been facing problems to declare dividends as the banks are failing to comply with the central bank dividend policies. 

That is why, despite declaring a board meeting for 2024 to announce dividends and approve financials, 19 banks failed to hold a board meeting and rescheduled meetings several times, according to the DSE. 

Despite having mandate to declare annual dividend and financials within 120 days after ending calendar year, with the consent of the ministry of finance, the date has extended until 31 May. 

Profit decline of five banks 

As per disclosure, NRBC Bank has reported consolidated earnings per share (EPS) of Tk0.08 for 2024, which is 96% lower from Tk2.40 in 2023.

While it's consolidated net operating cash flow per share stood at Tk12.10, and consolidated net asset value per share of Tk16.55, which was Tk13.13 and Tk17.58 in 2023.

The bank said EPS and net asset value decreased compared to previous year due to decrease of operating profit and increase of provisions and net operating cash flow decreased compared to previous year due to increase of Cost of deposit.

Meanwhile, in the first quarter (January-March) of 2025, NRBC Bank's consolidated EPS declined to Tk0.08, which is lower from Tk0.44 in the same time of 2024.

The bank said decrease in net interest income by 40.50% along with Fee base income by 36.27% despite of increase in investment income by 47.28% are the main causes to reduce EPS of the same quarter of the previous year.

SBAC Bank recommended no dividend for 2024 as its EPS declined by 80% to Tk0.13, which is Tk0.66 in 2023.

Exim Bank declared no dividend for 2024. It has reported a consolidated EPS declined by 92% to Tk0.18, which was Tk2.33 in 2023. 

Standard bank also will not pay any dividend to its shareholders. It reported a consolidated EPS decline by 40% to Tk0.74, which was Tk1.24 in 2023.

Meanwhile, in the first quarter of 2025, Standard Bank reported 7% growth in consolidated EPS to Tk0.15. 

Al-Arafah Islami Bank has decided not to pay a dividend to its shareholders for 2024.

According to the bank's price sensitive statement that was approved at a board meeting held on 28 May, its consolidated earnings per share was Tk0.66 in 2024, which was 68% lower from Tk2.04 in the previous year.

The bank said that the Bangladesh Bank directed Al-Arafah Islami Bank to keep a provision of Tk6,358 crore against investment.

But the bank kept provisions of Tk2,400 crore, and the rest amount will defer. That is why it did not recommend any dividend, said the bank.

Meanwhile, ONE Bank announced that it will not pay any dividend to its shareholders for the year 2024, despite posting a 14% year-on-year growth in profit.

This marks the first time since its listing on the stock exchanges that the bank has failed to declare a dividend.

In 2023, the bank declared a 3.50% cash and 3.50% stock dividends.

According to its latest disclosure, ONE Bank reported a consolidated earnings per share (EPS) of Tk1.24 for 2024, up from Tk1.09 in the previous year.

ASM Shahidullah Khan, chairman of ONE Bank, told TBS, "The Bangladesh Bank did not allow us to declare any dividends. We even applied to issue only stock dividends, but that too was not approved."

He added, "Essentially, banks that have taken deferral facilities to cover provisioning shortfalls against non-performing loans are not being permitted to declare dividends."