BRAC Bank has registered a net profit after tax of Tk 4.54 billion on a standalone basis and Tk 4.03 billion on a consolidated basis.
The bank’s Board of Directors also recommended a 10 percent cash dividend and 5 percent stock dividend. This is for formal adoption at the bank’s Annual General Meeting, which is scheduled to be held on May 27th, 2021.The bank’s earnings per share (EPS) stood at Tk 3.42 on a standalone basis and Tk 3.33 on a consolidated basis, said a press release on Wednesday.
The bank disclosed its annual performance for the year ending December 31, 2020, in a virtual earning disclosure event earlier this week.
The bank’s customer deposits grew by 9 percent year on year while the CASA mix improved from 43 percent to 55 percent reflecting a successful deposit mobilization and interest rate management strategy.
Selim R. F. Hussain, BRAC Bank Managing Director and CEO, M. Masud Rana, DMD and Chief Financial Officer, Sabbir Hossain, DMD and Chief Operating Officer, Tareq Refat Ullah Khan, DMD and Head of the Corporate Banking Division and other Senior Business Heads presented the financial results and outlined the bank’s strategy.
“BRAC Bank had come out of the pandemic with its reputation among customers and stakeholders even higher than at the start of the year,” said MD of BRAC Bank.
He congratulated the bank’s 9,500 odd staff members, who had exhibited the highest standards of professionalism and sincerity during a very difficult circumstance.BRAC Bank said it was very cautious in growing its customer loan portfolio in 2020 with a 3 per cent year on year net growth.
Customer lending started the year strongly but was then impacted by the pandemic. While SME lending grew well at 17 percent year on year, the bank was very selective in growing loans in corporate, commercial and retail banking.
Bangladesh experienced the full brunt of the COVID-19 pandemic in the first half of 2020 but recovered strongly through a large government stimulus programme and multiple monetary measures, the bank said.
According to it, strong overseas remittances from the private sector and a rebound in local economic activities also provided relief.
BRAC Bank was able to successfully re-organize its operations very early on to embrace new health and safety measures, roll out a virtual operations platform and significantly expand its digital customer solutions.
It allowed the bank to continue to serve its customers during the pandemic and leverage off the economic recovery in the second half of the year.
In 2020, the entire banking sector of the country experienced a significant reduction in net interest income from customer loans with the central bank imposing a 9 percent lending rate cap with effect from April 2020.
Despite this, BRAC bank ended the year with a Net Interest Margin of 4.6 percent, said the private commercial bank.
It said its treasury division performed “very strongly and helped recover most of the interest income lost from subdued customer lending and lower lending rates.” Investment income from the government securities grew 53 percent year on year.
Despite incurring costs of Tk 240 million in COVID-19 related health and safety measures and the central bank prescribed allowances for staff working during the pandemic, the bank managed to keep a tight rein on operating costs, it said.
The BRAC bank’s standalone cost to income ratio (CIR) ended in 2020 at 58 percent, while the consolidated entities’ CIR ratio stood at 71 percent.
The bank’s 2020 non-performing loan (NPL) ratio dropped to 2.9 percent, reflecting regulatory forbearance, while the NPL coverage ratio was enhanced to 171 percent to build reserves against potential bad debt challenges arising out of the pandemic.