UCB shares plunge 6.19% after third failed attempt to declare dividend
Despite rescheduling board meetings on 29 April, 30 April, and finally 19 May, the bank repeatedly deferred the agenda due to not receiving the required consent from Bangladesh Bank, according to the source.
United Commercial Bank (UCB) saw the steepest decline on the Dhaka Stock Exchange yesterday, with its share price dropping 6.19% to Tk10.60, after failing for the third time to declare a dividend or approve its audited financials.
Despite rescheduling board meetings on 29 April, 30 April, and finally 19 May, the bank repeatedly deferred the agenda due to not receiving the required consent from Bangladesh Bank, according to the source.
Standard Bank faced a similar situation. Despite a board meeting scheduled for 19 May, it too failed to declare a dividend, causing its share price to dip 1.92% to Tk5.30.
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Bank officials said the central bank has tightened dividend rules, barring declarations from banks with provisioning shortfalls, risky investments, or those availing deferral facilities.
Bangladesh Bank now requires 100% provisioning against non-performing loans—including deposits in weak banks and Non-Banking Financial Companies (NBFCs), and loans under High Court stays—leading to major losses for many banks.
Additionally, dividends must now be paid solely from current-year profits, not retained earnings, further limiting payout capacity.
A bank chairman said, "We've appealed to the central bank for some relaxation, as even a small dividend helps maintain market confidence. But we haven't received any response yet."
Earlier, on 27 August last year, the Bangladesh Bank restructured the board of directors of the UCB. The board members include former Bangladesh Bank Executive Director Sajjad Hossain, former Agrani Bank Deputy Managing Director Md Yusuf Ali, and chartered accountant Obaidur Rahman, the Bangladesh Bank said in a circular issued on that day.
Additionally, Sharif Zahir and Md Tanvir Khan have been appointed as shareholder directors, subject to the condition that they resign from their respective board positions at National Finance Ltd and Eastland Insurance Company Ltd.
Sharif Zahir, also the managing director of Ananta Group, has been elected as the new chairman of the bank at a board meeting held on 29 August.
