BRAC Bank posts record profit on Treasury gains

BRAC Bank posted a record profit in 2024 – the highest in its history – primarily driven by strong returns from its investments in government securities, commonly known as Treasury bonds.

According to the bank's audited financial statement, it recorded a consolidated net profit of Tk1,431.84 crore last year, marking a 73% increase from the previous year.

The bank stated that it earned Tk2,830 crore from government securities, including capital gains – a 137% year-on-year increase – as interest rates on Treasury bonds rose to a decade-high of around 13%.

Attracted by high interest rates on fixed-income instruments, BRAC Bank invested Tk28,671 crore in government securities – a 58% increase from the previous year.

However, its net interest income – the core segment of its banking operations – declined by 19% year-on-year to Tk1,645 crore in 2024 due to rising borrowing costs.

Over the year, interest paid on deposits and borrowings surged by 98% to Tk4,212 crore, while interest income from loans increased by 40% to Tk5,857 crore compared to the previous year.

Total disbursed loans and advances stood at Tk62,385 crore, while total deposits reached Tk77,705 crore – up by 20% and 32%, respectively, from the previous year.

Despite challenges, BRAC Bank reduced classified loans by Tk113 crore to Tk1,761.51 crore in 2024, with a ratio of 2.82% – well below the sector average.

Building on its robust profit, the bank has recommended a 12.5% cash dividend and a 12.5% stock dividend for its shareholders for the previous year.

To approve the dividend, the bank will hold its annual general meeting on 19 June, with the record date set for 25 May.

Despite posting strong financial results, the bank's share price fell by 0.81%, closing at Tk49.10 yesterday at the Dhaka Stock Exchange.