Rupali Bank reported hefty losses for the first quarter through March this year, hit hard by mounting non-performing loans, which led to negative net interest income amid rising fund costs.
The lone listed state-run lender incurred a consolidated loss of Tk 3.96 billion in the January-March quarter this year, compared to a profit of Tk 66 million in the same period a year ago.
Consolidated earnings per share (EPS) stood at negative Tk 8.12 for the quarter, against positive Tk 0.13 in the corresponding quarter of the previous year, according to a disclosure published on Monday.
The bank attributed the sharp deterioration in earnings to a steep decline in operating income as interest expenses on deposits outpaced income earned from loans, meaning the bank earned less in interest from loans than what it paid to its depositors.
The bank's consolidated operating income plunged to negative Tk 837 million in the first quarter from positive Tk 3.06 billion a year earlier.
While Rupali Bank's interest income was Tk 6.58 billion in the quarter to March, interest payments to depositors jumped to Tk 13.04 billion during the period under review, leading to negative net interest earnings of Tk 6.45 billion.
Due to huge losses, the bank could manage to keep only Tk 7.2 million as provisions in the quarter to March, while the amount was Tk 146 million in the same period last year. The amount of the required provision could not be known immediately after the earnings disclosure. However, there was a huge annual provision shortfall last year.
Rupali Bank's non-performing loans stood at Tk 196 billion at the end of December last year, according to Bangladesh Bank data, which was more than 38 per cent of the lender's total loan portfolio.
The bank could not earn interest from the bad loans. On top of that, it was required to keep provisions against bad loans from its earnings, eroding the bottom line.
Despite the losses, consolidated net operating cash flow per share (NOCFPS) improved to Tk 15.83 in January-March this year from Tk 6.62 in the same quarter last year, supported by higher deposit inflows.
The bank's deposits rose nearly 2 per cent year-on-year to Tk 734 billion at the end of March, while its loan portfolio declined around 1 per cent to Tk 508 billion from December last year.
Annual performance
Annual profits of Rupali Bank have been gradually falling. In 2023, profit was Tk 627 million, which fell 82 per cent to Tk 114 million in 2024. The bank's profit further plunged 40 per cent to Tk 68 million in 2025.
The bank managed to post a modest profit for 2025 despite a provision shortfall of Tk 140 billion by availing itself of special regulatory relaxations and facilities provided by the Bangladesh Bank.
The lender also failed to declare dividends for 2024 and 2025 due to provisioning deficits. As a result, the bank's stock was downgraded to the Z category two weeks ago.
As per Bangladesh Bank directives issued last year, banks that fail to maintain required provisions or opt for deferral facilities are prohibited from distributing dividends from 2024 onwards, while lenders with bad loans exceeding 10 per cent of total loans are barred from giving dividends from 2025 regardless of profitability.
Fresh share issuance underway
Meanwhile, Rupali Bank is in the process of issuing ordinary shares worth Tk 6.80 billion against funds received from the government as share money deposits.
It will issue 453.33 million shares at Tk 15 each, including a premium of Tk 5 per share, in favour of the secretary of the finance division.
The ordinary share issuance is poised to substantially boost the bank's existing paid-up capital, as these shares will be added to the existing shares. Currently, the company has 488 million shares, which will rise to 941 million after the issuance of fresh shares.
Following the earnings disclosure, Rupali Bank's stock lost 0.62 per cent to Tk 16 per share on Monday on the Dhaka Stock Exchange.
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