Eastern Bank’s consolidated profits drop
Eastern Bank's consolidated profits, meaning that of the bank and its concerns in total, have dropped 10 per cent year-on-year to Tk 106.9 crore in the first quarter of 2023.
However, profits of the bank alone rose 3.56 per cent to Tk 107.5 crore, according to the financial reports.
Despite struggling with increased foreign currency borrowing cost and expensive deposit, Eastern Bank posted higher profits in the solo basis mainly due to a significant growth in investment income and release of provision on diminution of value of quoted securities.
"We have posted positive growth in the 1st quarter of 2023 despite market volatility, rising inflation, and dollar crisis," said Managing Director and CEO Ali Reza Iftekhar.
"I think our prudent banking and responsible lending were key to this result. We would like to continue with the growth trend," he said.
The banking sector has faced a decrease in net interest income, fees and commission earnings, including foreign exchange gain, during the first quarter of 2023.
This was mainly because of ongoing economic crisis due to scarcity of the US dollar, the bank said in a press release.
This resulted in an increase of foreign currency borrowing cost, decline of export due to challenges of opening new letters of credit, increase in default loans and shrinking interest rate spread, it said.
In the first quarter of 2023, many banks failed to manage year-on-year growth in revenue and profits due to expensive cost of fund.
In the first three months of this year, investment income of the bank increased by 47 per cent due to increase of investment in government treasury bills/bonds, preference shares and quoted securities.
This resulted in an increase of operating income by 12 per cent.
Hence, earnings per share of the bank (solo) increased to Tk 1 from Tk 0.97 of the same period last year.
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