Even the declaration of a good dividend – 30 percent cash for 2019 – has not spared the share price of Dutch Bangla Bank from a big slide, because of the coronavirus pandemic.
The bank's share prices fell by 8.78 percent and the last trading price was Tk53 at the Dhaka Stock Exchange yesterday. The closing price of the bank was Tk52.1 a share.
Its share has lost 29 percent of its value – from Tk72.9 – in the last 30 days.
A senior official at the private lender, wishing to remain anonymous, said the banking sector has been under pressure. Since late last year, it has been tasked with reducing both the interest rate – to single digits – and the number of high default loans.
"Despite that, we have been able to maintain our growth. However, it will be difficult for us to maintain the growth this year," he told The Business Standard.
According to the bank, its net profit has increased by three percent to Tk434 crore and earnings per share was Tk8.64 in the last financial year ended December 31.
In the previous year, the bank's net profit was Tk420 crore and earnings per share was Tk8.4.
The bank official said there are three challenges ahead for the banking sector – implementing the single-digit interest rate, facing the private sector's slowdown and the impact of the coronavirus.
He said the banks can do nothing about the coronavirus impact on the sector.
The banker feared that the default loans will increase further.
The paid-up capital of Dutch Bangla Bank Ltd (DBBL), which was listed on the country's share market in 2001, is Tk500 crore.
Sponsors and directors hold 86.99 percent, institutional investors 3.99 percent, foreign investors 0.02 percent, and general investors nine percent of the bank's shares.
The bank was established as a joint venture company at the initiative of the Netherlands Development Finance Company. However, Netherlands Finance sold all of its shares last year.
Horizon Associate Ltd, a little-known company, bought the shares.
Abdus Salam and Abedur Rashid Khan – two sponsor directors of the bank – also transferred their total holdings of 5.59 crore shares to Horizon Associate in 2019.
After purchasing the Netherland Finance's stake, the total holdings of Horizon Associate stood at 12.12 percent of the bank.