EBL looks to strengthen capital after 20pc higher profit

Eastern Bank has reported a 19.53 per cent year-on-year growth in consolidated profit to Tk 6.12 billion for 2023.
With the latest data, it shows a steady profit growth for the last five years.
At a board meeting on Sunday, the company also recommended 12.5 per cent cash and 12.5 per cent stock dividends for 2023.
The stock dividends will be given out of accumulated profits, not from capital reserve or revaluation reserve or any unrealised gain or out of profit earned prior to the incorporation of EBL.
Eastern Bank recommended the same amount of dividends for the previous two calendar years.
In a disclosure, the company said they recommended the stock dividends to strengthen the bank's capital base in order to support projected business growth and to improve certain regulatory conditions.
Md. Abdullah Al Mamun, company secretary of the lender, said previously the banks' paid-up capitals were not up to the mark, compared to the extent of operations.
"That's why the banks were required to strengthen their capital base gradually in line with the requirements set by the central bank."
Apart from fulfilling the regulatory requirements, a bank needs a strong capital base to implement its business plans as well.
Eastern Bank issued stock dividends between 12.5 per cent and 17.5 per cent for the last three years.
The company has reported a consolidated NAV per share of Tk. 33.57 and consolidated NOCFPS of Tk. 7.91 for 2023, against Tk 29.62 (restated) and Tk 10.30 (restated) for the previous year.
Shares of Eastern Bank traded at Tk 29.40-Tk 31.10 each from January 31 to March 3 and closed at Tk 31.60 per share on Tuesday with a rise of 0.32 per cent from the previous session.

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