Brac Bank has disclosed its annual performance for the year that ended on 31 December, 2020, in a virtual earning disclosure program on Monday.
The bank was able to successfully re-organise its operations very early on to embrace new health and safety measures, roll out a virtual operations platform and significantly expand its digital customer solutions, said in a press release.
It allowed the bank to continue to serve its customers during the pandemic and leverage off the economic recovery in the second half of the year.
The press release informed Brac Bank registered a net profit after tax (NPAT) of Tk454 crore on a standalone basis and an NPAT of Tk403 crore on a consolidated basis, i.e. with all its subsidiaries.
Its earnings per share (EPS) stood at Tk3.42 on a standalone basis and Tk3.33 on a consolidated basis.
The bank's board of directors has recommended 10% cash and 5% stock dividends for formal adoption at the bank's annual general meeting, which is scheduled to be held on 27 May.
Brac Bank's customer deposits grew by 9% YoY (year on year) while the CASA mix improved from 43% to 55% reflecting a successful deposit mobilisation and interest rate management strategy.
The bank was very cautious in growing its customer loan portfolio in 2020 with a 3% YoY net growth. Customer lending started the year strongly but was then impacted by the pandemic. While SME lending grew well at 17% YoY, the bank was very selective in growing loans in corporate, commercial and retail banking.
In 2020, the entire Bangladeshi banking sector experienced a significant reduction in net interest income from customer loans with the central bank imposing a 9% lending rate cap with effect from April 2020.
Despite this, Brac Bank ended the year with a net interest margin of 4.6%.
The bank's Treasury division performed very strongly and helped recover most of the interest income lost from subdued customer lending and lower lending rates. Investment income from government securities grew 53% YoY.
Despite incurring costs of Tk4 crore in Covid-19 related health and safety measures and central bank prescribed allowances for staff working during the pandemic, the bank managed to keep a tight rein on operating costs.
Brac Bank's standalone cost to income ratio (CIR) ended in 2020 at 58%, while the consolidated entities' CIR ratio stood at 71%.
The bank's 2020 non-performing loan (NPL) ratio dropped to 2.9%, reflecting regulatory forbearance, while the NPL coverage ratio was enhanced to 171% to build reserves against potential bad debt challenges arising out of the pandemic. It is one of the highest NPL coverage ratios in the Bangladeshi banking industry.
The net asset value (NAV) per share, as of December 2020, stood at Tk36.63 on a consolidated basis and at Tk35.41 on a standalone basis.
The virtual earning disclosure programme brought together many local and foreign investment analysts, portfolio managers and capital market experts and was also broadcast live on social media for overseas stakeholders.
Selim R F Hussain, MD and CEO; M Masud Rana, DMD and chief financial officer; Sabbir Hossain, DMD and chief operating officer; Tareq Refat Ullah Khan, DMD and head of the corporate banking division; and other senior business heads presented the financial results, outlined the bank's strategy and conducted a Q and A session.
Hussain ended the programme by stating, "Brac Bank had come out of the pandemic with its reputation among customers and stakeholders even higher than at the start of the year."
He particularly complimented the bank's 9,500 odd staff members, who had exhibited the highest standards of professionalism and sincerity during a very difficult circumstance.