Prime Bank, a leading second-generation private sector lender in Bangladesh, has reached a significant financial milestone by reporting a consolidated net profit of Tk700 crore for the first time in 2024. This remarkable growth has been attributed to increased earnings from interest, investments, commissions, exchange activities, and brokerage services.
Significant Growth Driven by Interest, Investments, and Commissions
Key Financial Highlights
| Financial Indicator | 2024 (Tk Crore) | 2023 (Tk Crore) | Growth (%) |
|---|---|---|---|
| Consolidated Net Profit | 732 | 481 | 52% |
| Consolidated Earnings Per Share (EPS) | 6.47 | 4.25 | 52% |
| Consolidated Net Asset Value (NAV) Per Share | 34.07 | 29.63 | 15% |
| Investment in Government Securities | 12,700 | 8,050 | 58% |
| Interest Income (Jan–Sept) | 739 | Not Disclosed | — |
| Profit from Government Securities (Jan–Sept) | 693 | 379 | 83% |
Dividend Declaration
During a board meeting held on 13 March, Prime Bank proposed a 20% dividend, the highest since 2011. This comprises a 17.50% cash dividend and a 2.50% stock dividend, demonstrating the bank’s strong financial health and commitment to shareholder returns. According to its price-sensitive disclosure, the stock dividend aims to bolster its capital base for future business expansion and complies with regulatory standards by not drawing from capital reserves, revaluation reserves, or unrealised gains.
Rising Investments in Government Securities
In response to increasing interest rates on Treasury bills and bonds, Prime Bank has significantly raised its investment in government securities.
Interest Rate Trends on Government Securities:
| Security Type | Interest Rate (May 2024) | Change from Previous Period |
| 91-day Treasury Bill | 11.60% | +25 basis points |
| 182-day Treasury Bill | 11.80% | +40 basis points |
| 364-day Treasury Bill | 12.00% | +50 basis points |
| 5-year Treasury Bond | 12.40% | +30 basis points |
Operational Challenges and Cash Flow Concerns
Despite the surge in profits, Prime Bank faced a 71% decline in consolidated net operating cash flow per share, dropping to Tk2.90 in 2024. The bank explained that this was primarily due to higher investments in loans, advances, and government securities compared to the previous year.
Strategic Focus and Market Performance
Prime Bank’s prudent financial management and strategic emphasis on government securities have enabled it to outperform competitors in profitability and shareholder value. The bank’s reduced volume of classified loans, a challenge faced by many in the sector, has further strengthened its financial standing.
On the Dhaka Stock Exchange, Prime Bank’s share price closed 0.82% higher at Tk24.60, reflecting investor confidence in its financial performance and strategic direction.
Looking Ahead
With an increasing focus on capital strengthening and risk management, Prime Bank continues to set new benchmarks in the banking industry. While the full financial report is yet to be released, market analysts anticipate continued growth, driven by favourable macroeconomic conditions and strategic financial decisions.