City Bank profit climbs over Tk700cr in Jan-Sep on safer bets in government securities

Infographic: TBS

City Bank PLC has posted a remarkable surge in profits for the first nine months of 2025, as the lender strategically shifted towards risk-free investments in government securities amid an uncertain economic environment.

According to a disclosure filed with the Dhaka Stock Exchange today, the bank's consolidated net profit rose 60% year-on-year to Tk720 crore in the January-September period, from Tk450 crore a year earlier. Earnings per share (EPS) climbed to Tk4.75, up from Tk2.96, reflecting strong earnings momentum across its investment portfolio.

During the July-September quarter alone, City Bank posted a staggering 110% jump in consolidated net profit to Tk421 crore, while quarterly EPS climbed to Tk2.77 from Tk1.32 in the same period of 2024. 

According to bank officials, this marks the second-highest quarterly profit in the institution's 42-year history, surpassed only by the record Tk563 crore profit it earned in the final quarter of 2024.

The bank attributed its robust earnings to a sharp rise in investment income, driven by strategic positioning in high-yield government securities. 

"As a strategic initiative, City Bank's substantial investment in government securities led to a marked increase in investment income, effectively offsetting the decline in net interest income and supporting the coverage of escalating operational expenses," the bank said in its statement.

City Bank also reported an increase in its net asset value per share to Tk38.09, with the rise primarily stemming from higher revaluation reserves against government securities. Net operating cash flow per share stood at Tk37.82, underscoring the bank's strong liquidity position.

According to analysts, City Bank's strategy mirrors a broader trend among banks that are increasingly relying on government securities to secure stable, risk-free returns amid sluggish private sector credit demand.

While this strategy ensures steady income and portfolio safety, experts caution that excessive dependence on such instruments could limit banks' exposure to productive lending, potentially slowing business and industrial growth.

Government securities, considered among the safest investment options, have offered attractive yields over the past year as the government turned to domestic borrowing to finance budgetary gaps amid weak revenue collection.

This has incentivised banks to channel more funds into treasury bills and bonds rather than traditional loans.

Following the earnings announcement, City Bank's shares rose 1.24% to close at Tk24.50 on the Dhaka Stock Exchange today. The lender's market capitalisation now stands at Tk3,727 crore, with a paid-up capital of Tk1,521 crore.

The current growth trajectory builds on City Bank's record-breaking performance in 2024, when it posted a consolidated net profit of Tk1,014 crore – the highest in its history – making it only the second conventional, locally owned bank in Bangladesh, after BRAC Bank, to cross the Tk1,000 crore profit milestone.

City Bank operates through four subsidiaries – City Brokerage Limited, City Bank Capital Resources Limited, CBL Money Transfer, and City Hong Kong Limited – and continues to expand its financial ecosystem. 

Recently, it announced plans to establish a new subsidiary named City Credit Bureau, following Bangladesh Bank's approval of private-sector credit bureaus aimed at enhancing credit reporting and risk assessment in the country's financial sector.

Further strengthening its digital presence, City Bank recently launched City Impex, an online platform offering end-to-end trade services for corporate clients. 

The platform allows businesses to open import and export letters of credit (LCs) and manage trade payments directly through an online system integrated with SWIFT, eliminating manual paperwork and significantly improving transaction efficiency.