Business Report :
Eastern Bank Ltd (EBL) experienced a 30 per cent year-on-year growth in consolidated profit to Tk 1.76 billion in April-June (Q2), mainly supported by higher interest income.
Its consolidated profit in January-June was also up 33 per cent to Tk 3.22 billion, compared to the same period a year ago for the same reason.
Company officials said increased interest rate was a driving force behind the significant growth in profit.
Masudul Hoque Sardar, chief financial officer (CFO) of EBL, said the interest rate was in a single digit during H1, 2023, which rose to double digits following the introduction of the Six-month Moving Average Rate of Treasury bills (SMART) in July last year.
The interest rate was as high as 13.55 per cent in April this year.
“The deposit rate also increased after the introduction of SMART but the rate of lending was higher than of deposits,” Mr. Sardar said.
EBL has reported a net interest income of Tk 2.78 billion in Q2 this year, a 52 per cent year-on-year growth.
Subsequently, the company witnessed a year-on-year growth of 44 per cent in operating profit to Tk 7.26 billion in Q2 this year. The rise in the operating expenses was within a tolerable level of 8 per cent because of efficiency in management.
But the provisioning requirement was higher in April-June this year, compared to the same period of the previous year. EBL set aside a provision of 994.04 million in April-June, 93 per cent up from the same quarter of the previous year.
The CFO said significant erosion in the bank’s investments in the capital market was the main reason behind the rise in provision requirement.
The company’s EPS (earnings per share) stood at Tk 1.30 in Q2, 2024, up from Tk 1.0 reported for the same period of the previous year.
The EPS is Tk 2.37 for H1, 2024, increased from Tk 1.78 for the same period of the previous year.
The consolidated NOCFPS (net operating cash flow per share) was Tk. 15.47 for January-June 2024 as against Tk. 2.08 (restated) for January-June 2023.
The consolidated NAV per share was Tk. 31.01 as on June 30, 2024 and Tk. 29.84 (restated) as on December 31, 2023.