A Tk 141 crore profit has been reported by BRAC Bank after excluding tax in Q1 of the present year, showing a 31 per cent year on year growth.
Quarterly gains were disclosed by BRAC Bank at a virtual earnings disclosure event held on May 24.
After encountering the full force of the coronavirus pandemic in the first half of 2020 and subsequent health and economy recovery during the latter half of 2020, the year 2021 saw a vibrant first 3 months in terms of economic activity picking up.
A Net Profit After-Tax (NPAT) of Tk 141 crore with a year-on-year (YoY) growth of 31 per cent on standalone basis and an NPAT of Tk 109 crore with YoY growth of 44 per cent on consolidated basis, i.e. with all its subsidiaries was posted by the bank.
The earnings per share (EPS) stood at Tk 1.06 on a standalone basis and Tk 0.93 on a consolidated basis.
On the other hand, the customer deposits increased by 4 per cent YoY while the CASA mix improved from 43 per cent to 55 per cent reflecting a successful deposit mobilization and interest rate management strategy.
BRAC Bank Limited was very careful in growing its customer loan portfolio in the pandemic years with a 0.4 per cent year-on-year net growth. While SME lending grew well at 18 per cent year on year, retail lending picked up in Quarter 1 of 2021 and the bank was very selective in growing loans in the corporate and commercial business.
Internet margin compression continued all throughout the entire banking industry after the introduction of the lending rate cap at 9 per cent in April 2020. Despite that, BRAC Bank ended the first quarter with a spread of 4.8 per cent with better Cost of Deposit Management.
The Treasury Division of the bank performed very strongly and helped recover most of the interest income lost from subdued customer lending and lower lending rates. Investment income from the government securities more than doubled year-on-year during the first quarter of 2021.
BRAC Bank’s standalone cost to income ratio (CIR) improved by 6 per cent year-on-year standing at 50 per cent as at quarter 1 of 2021, while the Consolidated Entities’ CIR stood at 65 per cent, improving by 4 per cent year on year.
The Return on Equity (RoE) in quarter 1 of 2021 was 12.05 per cent and Return on Assets (RoA) was 1.43 per cent on a standalone basis. On the other hand, the Return on Equity (RoE) was 10.22 per cent and Return on Assets (RoA) was 1.09 per cent on a consolidated basis.
BRAC Bank’s first quarter Non-Performing Loan (NPL) ratio was 4.4 per cent, an increase by 0.6 per cent year-on-year, while the NPL coverage ratio improved to 119 per cent to build a reserve against potential bad debt challenges arising out of the pandemic.
A consolidated Capital Adequacy Ratio (CAR) of 15.12 per cent was reported by BBL for quarter 1 of 2021 with 95 per cent Tier 1 capital, the highest tier-1 capital ratio in the industry. The Bank’s standalone CAR, at 14.65 per cent, is also well above the 12.5 per cent regulatory requirements.
The net asset value (NAV) per share, as at March 2021, stood at Tk 36.24 on a consolidated basis and at Tk 35.04 on a standalone basis.