City Bank's Q3 profit jumps 41pc on higher investment income

City Bank PLC posted an impressive 41 per cent year-on-year profit growth, reaching Tk 2.01 billion in the third quarter (Q3) of this year, driven by substantial income from investments, particularly in government securities.
The private commercial bank's consolidated earnings per share (EPS) stood at Tk 1.49 for this July-September quarter, up from Tk 1.05 in the same quarter last year.
The bank attributed its growth in net profit to significant increases in investment income and robust growth in commission and fee-based income, according to its unaudited financial statements.
The bank reaped a handsome profit from investments in government securities alongside high interest income, and its interest expenses on deposits also went higher.
The bank's interest income grew 39 per cent year-on-year to Tk 12.02 billion in the quarter through September while interest payment to depositors and lenders jumped 85 per cent to Tk 8.41 billion.
As a result, its net interest income fell 11.5 per cent year-on-year to Tk 3.61 billion in the September quarter.
However, higher gains from government securities contributed to the bank's impressive earnings growth, even amid an adverse business climate marked by inflationary pressures.
The bank's income from investment, particularly from government securities, climbed 296 per cent year-on-year to Tk 4.52 billion in the September quarter.
During the July-September quarter, the yield rates of T-bonds ranged between 12 per cent and 14.80 per cent, with maturity periods of 2-20 years, while T-bills' yields varied between 15 and 15.2 per cent.
The bank's income in the form of exchange and brokerage commission also surged 28 per cent year-on-year to Tk 2.12 billion in the September quarter.
Meanwhile, the bank's nine months' consolidated net profit also rose almost 19 per cent to Tk 4.51 billion due to the same reasons.
The consolidated net operating cash flow per share, a measure of a company's ability to generate cash from its operations, saw a big jump to Tk 42.38 in nine months through September, from negative Tk 5.20 in the same period last year.
The bank attributed this increase to elevated deposit mobilisation from customers and other banks, while loan portfolio growth remained more modest compared to the same period last year.
The consolidated net asset value per share reached Tk 29.91 in January-September this year, as against Tk 28.56 in December 2023, due to the growth of net profit.
Listed in 1986, the bank's stock price surged 1.85 per cent on Thursday to close at Tk 22 on the Dhaka Stock Exchange.

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