Numerous banks outsmarted odds like dollar dearth, import fall and liquidity hardship in the adversity-strung bygone year and posted EBIT or operating profits in a significant growth.
In economic jargons EBIT (earnings before interest and tax), better known as operating profit, is one of the key indicators showing financial health of any institution.
Both public and private commercial banks saw their operating profit grow in the just-concluded calendar year when the industry saw the much-needed withdrawal of the lending-rate cap alongside higher costs of fund amid lower private-sector-credit demand, sector insiders have said.
The FE writer collected unaudited operating-profit figures of 12 banks, out of a total of 61, before the sun set for the year 2023.
Of the dozen, Rupali Bank PLC tops the list by posting over a 556-percent growth. Its operating profits rose to Tk 6.96 billion in 2023 from Tk 1060 million a year before.
Meghna Bank PLC stood second with a 120-percent growth as the private commercial bank bagged operating profits amounting to Tk 1.65 billion in the just-past year against Tk 7500 million earned a year ago. Pubali Bank PLC becomes third-largest profit-earning bank recording Tk 17560 million in 2023 in a rise from Tk 14150 million in 2022. The growth is around 25 per cent.
Jamuna Bank Limited secured 21-percent growth in making operating profit of Tk 10.020 billion in 2023 against Tk 8.3 billion earned in the previous year.
Having earned EBIT worth Tk 6.0 billion in 2023, Social Islami Bank Limited (SIBL) ranked fifth with over 15-percent growth. In 2022, the bank's operating profit was recorded at Tk 5.2 billion.
Union Bank PLC managed to bag around 10-percent growth in the past calendar year with Tk 4.55 billion earned as operating profit. In 2022, the figure was Tk 4.150 billion.
Islami Bank Bangladesh PLC earned Tk 27.81 billion as unaudited operating profits in 2023 and the figure jumped by Tk 1.35 billion from the 2022 earnings.
Operating profits of Al-Arafah Islami Bank PLC increased by Tk 300 million to reach Tk 8.4 billion in 2023 while Eastern Bank PLC unaudited profit shot up by at least Tk 50 million to reach Tk 1.1 billion in 2023.
AB Bank PLC bagged unaudited financial gains of over Tk 5.5 billion in 2023, which is slightly higher from its previous year's figure of Tk 5.45 billion.
However, Mercantile Bank PLC recorded negative growth as the bank's operating profit plummeted to Tk 5.45 billion in 2023 compared with previous year's earnings of Tk 8.45 billion.
Simultaneously, Southeast Bank PLC earnings dropped by over Tk 1.0 billion to stand over Tk 9.0 billion in 2023 from previous year's count of Tk 10.28 billion.
Some banks have yet to complete calculation of their annual accounts because the central bank recently relaxed the loan-repayment policy for all the sectors to expedite the country's economic recovery from the disruptions caused by the ongoing war in Europe.
"We're still working on the matter," a senior official at a PCB said in reply to a query.
He also said such policy relaxations also helped improve the operational profit of the banks.
Another top executive of another PCB said they couldn't make much profit because of two factors - dollar appreciation amid the greenback shortfall and government belt-tightening measures.
"To meet foreign-currency obligation," he said, "all the banks were forced to buy dollar at higher rates to clear import bills that ate up a portion of their profits while austerity measures to protect the reserves compelled them not to go for import."
However, he was very optimistic about the future, that the unofficial withdrawal of lending-rate cap from the consumer's credits would help boost profitability of the banks in the days ahead.
Regarding remarkable rise in unaudited earnings, a senior official at Rupali Bank PLC said the bank saw record recovery against the bad loans as it recovered Tk 5.18 billion throughout the outgoing year.
"It is not only helping improve our earnings but also brought down the volume of NPL (non-performing loans) to 16 per cent from 22 per cent," the official informed.
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