City Bank has maintained strong growth in major indicators though the bank’s solo revenue decreased in the first half of the year amid the coronavirus pandemic.
In a statement, the bank management on Wednesday reported that its solo half-yearly revenue dropped by 17.2 per cent amid the new regulation of interest cap and the corona pandemic.The bank’s half-yearly interest income stood at Tk 12.48 billion till June, which is almost a 2.8 per cent decline year-on-year.
The bank, however, maintained a strong growth of 18.4 per cent in loan disbursement despite capping lending internet to 9 per cent from Aril 1 as per a directive of the central bank.
City Bank’s deposits grew by 11.4 per cent to Tk 274.6 billion between January and June and advance to deposit ratio stood at 81.5 per cent, capital adequacy ratio (consolidated) stood at 12.9 per cent against the minimum requirement of 12.5 per cent.
City Bank has been actively participating in the Stimulus Packages introduced by the Central Bank to rejuvenate private sector businesses through the financial system.
The bank disbursed Tk 7.31 billion till date under the stimulus packages.
Besides, the interest expenses on deposit figured at Tk 8.40 billion, posting a 10.8 per cent year-on-year growth with the cost of deposit at 5.5 per cent.Regarding the half-yearly performance, City Bank Managing Director Mashrur Arefin said the half-yearly revenue decreased by Tk 578 million by June whereas, operating expenses increased by Tk 460 million over the same period of last year, mainly due to increase in salary expenses.
At the same time, provision expenses increased by 24.9 per cent, impacted mainly by the increase in the provision on off-balance sheet items and investments and prudential risk and balance sheet management, which eventually took provision coverage ratio to 109 per cent in Jun this year from 78 per cent, Mashrur Arefin said.
“Nonetheless, the decline in the profitability of the bank during this period is mostly caused by external, regulatory and macro factors rather than internal lack of efficiency. A testament to this fact is the outstanding growth in the Balance Sheet items of the bank during this period, even with the Coronavirus outbreak impacting all businesses severely,” Mashrur added. City Bank’s default loan ratio declined to 4.5 per cent in Jun this year against 5.8 per cent of December last year, mostly driven by regulatory changes said by the managing director of the bank.
The bank’s number of SME outlets reached 116 in June this year and agent banking outlets will also be used to roll out Small Business products & services and SME loans have grown significantly in 1st half, with 21.7 per cent growth.
Also, the bank’s agent banking deposits grew 17.2 per cent in the last six months and women banking deposits grew by 7.6 per cent during the same period.