City Bank's profit grows 6pc in Q2

City Bank PLC has posted a 6 per cent growth in second-quarterly profit, riding on higher interest income following removal of the interest rate cap.

The private lender earned a consolidated net profit of Tk 1.57 billion in April-June quarter this year, up from Tk 1.48 billion in the same quarter a year before.

Accordingly, the consolidated earnings per share (EPS) of the bank stood at Tk 1.17 in the second quarter as against Tk 1.10 in the same quarter of the previous year, according to its unaudited financial statements published on Thursday.

The lender wisely made good investments in Treasury bills and bonds, reaping handsome returns from the government securities alongside higher interest income.

The gap between interest rates charged by banks on loans and interest rates paid by banks against deposits has widened, leading to higher net interest income.

Interest rate was in rising trend in the country after the ceiling on lending rate was removed in July last year while the interest rate further rose following adoption of market-based interest rate from May this year.

The bank's half-yearly consolidated net profit also rose 5 per cent year-on-year to Tk 2.49 billion for January-June this year, riding on effective business strategies.

The bank's net operating cash flow per share, a measure of a company's ability to generate cash from its operations, more than doubled to Tk 2.88 in January-June this year, as against Tk 1.10 in the same period last year.

The net asset value, which refers to the excess of total assets over total liabilities, stood at Tk 28.12 per share as of June this year, down from Tk 28.56 in December last year.

Stock price of the bank also jumped 8 per cent to Tk 24.3 on Thursday.

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