Dhaka, Bangladesh (BBN) – The consolidated earnings per share (EPS) of most of the listed banks increased in the first quarter (Q1) of the current calendar year despite higher growth of classified loans.
The country’s banking sector remained volatile with ongoing liquidity crunch, soaring interest rate coupled with huge non-performing loans (NPLs) which may affect the banks’ profitability by the end of this year, according to market operators.
EPS is the portion of a company’s profit allocated to each outstanding share of common stock. In short, it serves as an indicator of a company’s profitability.
All 30 banks listed with the Dhaka Stock Exchange (DSE) disclosed their un-audited consolidated EPS for January-March, 2019 quarter.
Of them, 21 banks’ consolidated EPS rose in the January-March, 2019 quarter while nine banks saw their EPS fall, according to the un-audited financial statements.
The Uttara Bank posted the highest EPS increase-141 per cent– to BDT 0.94 for January-March, 2019 quarter which was BDT 0.39 in the same quarter in the previous year, according to data available with the DSE.
The EPS of City Bank also saw 107 per cent rise to BDT 0.79 for January-March, 2019 which was BDT 0.38 in the same quarter in the previous year.
However, consolidated net operating cash flow per share (NOCFPS) of the bank was negative BDT 11.56 for January-March 2019 as against negative BDT 0.32 for January-March 2018.
During January 1, 2019 to March 31, 2019, growth in deposits and borrowings was lower than growth in advance, which ultimately affected operating cash flows negatively, the bank explained.
The consolidated EPS of Eastern Bank also rose 69 per cent to BDT 1.17 for January-March, 2019, which was BDT 0.69 in January-March period of 2018.
Jamuna Bank’s EPS also saw 64 per cent rise to BDT 0.74 for January-March, 2019 quarter compared to the same quarter a year ago.
The EPS of First Security Islami Bank, Standard Bank, Premier Bank, National Bank and Bank Asia also saw their EPS grow by 51 per cent, 50 per cent, 46 per cent, 45 per cent and 17 per cent respectively.
Al-Arafah Islami Bank, Dhaka Bank, Islami Bank, NCC Bank, Prime Bank, Pubali Bank, Rupali Bank, Mutual Trust Bank, UCB, IFIC Bank and Shahjalal Islami Bank also saw their EPS grow in January-March, 2019 quarter.
Exim Bank’s EPS returned to positive territory to BDT 0.25 for January-March, 2019 which was negative BDT 0.34 in the same quarter in the previous year.
In January-March 2019 quarter, AB Bank’s EPS declined the most, by 37.50 per cent year-on-year, to BDT 0.10. Its EPS was BDT 0.16 in January-March, 2018.
ICB Islamic Bank’s losses increased for January-March, 2019. The bank’s EPS stood at negative BDT 0.16 in January-March, 2019 which was negative BDT 0.13 in the same quarter a year ago.
Mercantile Bank’s EPS also fell 22 per cent to BDT 0.63 in January-March period of 2019 compared to the same quarter in the previous year.
EPS of Brac Bank, Dutch-Bangla Bank, ONE Bank, Social Islami Bank, Southeast Bank and Trust Bank also declined up to 20 per cent during the period under review.
The banking sector had to keep huge provisioning as the classified loans are soaring, and those with higher classified loans saw their EPS decline most, they added.
They also said huge competition to attract deposits is another reason for the decline in many banks’ EPS during the period under review.