Most of the listed banks posted higher earnings year-on-year in nine months for January-September 2021 due to suspension of loan classification and bullish capital market.
Of the 32 banks listed on the Dhaka Stock Exchange (DSE), 23 have disclosed their un-audited financial statements for January-September, 2021 as of Thursday.
Of them, the consolidated earnings per share (EPS) of 20 banks surged, two saw their EPS fall marginally while one continued to incur losses, according to available data with the DSE.
EPS is the portion of a company's profit that is allocated to every individual stock. In short, it serves as an indicator of a company's profitability.
Most banks posted higher EPS due to increased operating profit while non-performing loans were under control because of the policy support on provisioning from the central bank, according to a top executive of a private commercial bank.
"The stock market was also bullish during the period, so many banks did not need to keep provision. This ultimately boosted the profits of the banks," he said.
The scheduled banks were not required to make provisioning of loans as the central bank earlier suspended loan classification to facilitate business activities amid Covid-19 pandemic.
Analysts, however, said the un-audited EPS often does not reflect actual financial health of a company, but indicates profitability that influences investors towards their long-term investment.
"In many cases, the rise observed in income is artificial. The banks will have to bear the load in future. So, it could be better for the banks if they kept provision," said an analyst.
Standard Bank registered the highest EPS surged by 155 per cent to Tk 0.28 for January-September, 2021. Its EPS was Tk 0.11 in the same period a year earlier.
The EPS of Mercantile Bank also rose to Tk 3.38 for January-September, 2021, up by a whopping 106 per cent, from Tk 1.64 in the corresponding period.
For January-September 2021, Shahjalal Islami Bank has reported 67 per cent growth in EPS against January-September, 2020 while Premier Bank posted 59 per cent growth, AB Bank 57 per cent, Pubali Bank 54 per cent, Brac Bank 49 per cent, ONE Bank 43 per cent, EBL 36 per cent, Dhaka Bank 29 per cent.
The EPS of NCC Bank also rose 24 per cent, followed by Jamuna Bank 22 per cent, UCB 20 per cent, NRBC Bank 16 per cent, Islami Bank 16 per cent, Dutch-Bangla Bank 14 per cent, Al-Arafah Bank 14 per cent, Uttara Bank 7.0 per cent, First Security Islami Bank 3.17 per cent and The City Bank posted 2.77 per cent growth of EPS.
On the other hand, Exim Bank saw the highest EPS fall by 16 per cent to Tk 1.18 for January-September 2021 compared to the same period last year.
EPS of National Bank also fell by 2.22 per cent to Tk 0.44 for January-September, 2021.
ICB Islamic Bank continued to incur losses. Its loss increased to Tk 0.47 per share for January-September, 2021, from loss of Tk 0.15 per share in the same period a year ago.
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