Dutch-Bangla Bank Ltd (DBBL) rose 7.20 per cent on the Dhaka Stock Exchange (DSE) on Thursday as investors were buoyed by its 42 per cent year-on-year profit growth in 2023.
DBBL secured a profit of Tk 8.02 billion last year, highest since its listing in the stock market in 2001, riding on high interest income, according to a disclosure posted on the DSE website.
The bank's earnings per share stood at Tk 10.72 in 2023, up from Tk 7.57 a year before.
Low-cost fund was the key behind this surge in profit, according to the bank's managing director.
"We have a large ATM network. That has provided us with a huge low-cost fund. This year we have earned good net interest margin, thanks to our low-cost fund," said Abul Kashem Mohammed Shirin, MD & CEO of DBBL.
Apart from the cheaply available fund, good governance and asset diversification yielded the lender good profits.
"Yes, we did well this year. We were trying very hard to improve our asset quality. We chose some very good borrowers. We also focused on retail, SME and home loans, which helped diversify our loan portfolios," said the CEO.
After the earnings disclosure, Dutch-Bangla Bank jumped to Tk 58.10 per share on the Dhaka bourse on Thursday.
The stock's price-to-earnings ratio is 5.42, according to the DSE, far less than its peers'.
The P/E ratio means how much investors have paid for every Tk 1 income of the company in a particular year.
Based on the record profit, the bank board declared 17.5 per cent cash and 17.5 per cent stock dividends for 2023.
In 2022, the second generation bank provided 25 per cent dividends -- 17.5 per cent cash and 7.5 per cent stock.
To get shareholders' approve of the dividends and audited financial statement, the bank will hold an annual general meeting on June 9, with the record date set for May 9.
The bank says in the statement that stock dividend has been declared to increase the paid-up capital in compliance with the Bangladesh Bank's order regarding the maximum limit of declaration of dividends, which is 35 per cent, out of which maximum cash dividends can be 17.50 per cent.
The retained amount will be used to strengthen capital, which would help enhance the business capacity of the bank.
Dutch-Bangla Bank was listed on the stock exchange in 2001. According to the bank's website, it was the first bank in Bangladesh to be fully automated.
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