Sonar Bangla Insurance Ltd has posted a massive 247 percent increase in its profits during the second quarter of 2020.
The company's earnings per share increased to Tk0.52 in the period amid slower economic activities during the countrywide general holidays - April and May – put in force to curb the spread of the coronavirus.
Sheikh Kabir Hossain, chairman of the company told The Business Standard, "Our insurance association and the Insurance Development and Regulatory Authority have taken a few initiatives to develop the sector. The initiatives include one promise of not taking over any business from another insurance company."
"All companies have maintained this policy. On top of that, we have been successful in stopping the unethical commission system. That's why our business has increased this year despite the coronavirus outbreak," he added.
However, a senior official of the company said, "We received a large amount from Sadharan Bima Corporation, thanks to a government insurance policy. Also, insurance claims decreased significantly due to the pandemic."
The company has published its quarterly financial report on Tuesday evening. Its share price has increased by 24 percent to Tk37.20 over the last nine working days at the Dhaka Stock Exchange (DSE).
In the first half of the current year, the company reported earnings per share of Tk1.71 which is 88 percent higher as compared to that of the same period last year.
The net asset value per share stood at Tk20.33 and the net operating cash flow per share was Tk0.74 during the first half of this year.
Meanwhile, another general insurance company named United Insurance has published its half yearly financial statements. The company posted a 59 percent fall in its profits during the six-month period, while its profits declined 74 percent in the second quarter.
Commenting on this, a market researcher said the securities regulator should conduct an inquiry on the half yearly financial statements of Sonar Bangla Insurance because these statements look confusing to investors.
Meanwhile, Sonar Bangla Insurance recommended a 10 percent cash dividend to its shareholders for the financial year which ended on December 31, 2019. The dividend was recommended at a board meeting that was held on Tuesday evening.
For final approval of the dividend, the company will arrange an annual general meeting on October 25 this year through a digital platform. The record date has been set on August 25.
Last year, the company posted earnings per share of Tk1.99, which is 10 percent higher as compared to the previous year.
In 2018, the company paid 6 percent cash and 6 percent stock dividends to its shareholders.
Sonar Bangla Insurance Ltd was listed with the Dhaka Stock Exchange in 2006 and its paid up capital is Tk37.77 crore.
The company's closing price of each share stood at Tk36.8 on Wednesday.
Out of total shares, sponsors and directors of the company jointly hold 36.78 percent, while the institutional investors have 11.34 percent and the general investors own 51.88 percent shares.