Rupali Bank’s stock price soared 106 percent since June 29 even though the state-owned lender’s non-performing loan ratio, a barometer of its financial health, has been on the rise.
On June 29, each share of the bank traded at Tk 27, which rose to Tk 30.50 at the close of the next trading session and Tk 33.50 the following day so on. Yesterday, each Rupali shares traded at Tk 62.80.
The unusual price hike towards the beginning of July even brought the Dhaka Stock Exchange to its doors. But the bank said it had no undisclosed price-sensitive information.
“We have no idea about why share price is rising,” said Ataur Rahman Prodhan, managing director of Rupali Bank, adding that the bank’s financial performance did improve this year.
Towards the end of June, word got out that the state-owned bank was on course to logging in healthy profit for the first half of the year.
A report published on The Daily Star on July 3 informed that as per provisional statistics Rupali registered Tk 208 crore as operating profit for the January-June period — a six fold increase from a year earlier.
Eventually, the bank announced net profit of Tk 20.17 crore for the first half of the year, which is more than double the sum registered for the same period last year.
Prodhan, who joined Rupali in August last year, accounted the substantial growth in profit to the increased focus on quality investment this year.
“Moreover, recovery from default loans also improved, which contributed to the profit margin,” he said. Rupali’s loan recovery from its top 20 defaulters last year was 69 percent of the Bangladesh Bank-imposed target of Tk 1,500 crore.
In 2015, the bank managed to recover only 9.33 percent of the target.
At the end of March, Rupali’s default loans stood at Tk 4,264 crore, up 57 percent from the preceding three months.
At the end of December last year, the bank had a capital shortfall of Tk 714 crore.
The government holds 90.19 percent of Rupali’s shares and the rest are floated on the stock market.
Though most of the stocks declined yesterday, the DSE ended in the green riding on bank shares. The broad index gained 19.78 percent to close at 5,921 points. Turnover was Tk 777 crore.
Of the traded securities, 197 declined, 102 advanced and 30 remained unchanged at the end of the trading session.
Bank shares dominated both turnover and top gainer charts. Of the top 10 gainers, 8 were banks.
BBS Cables topped the turnover list, followed by IFIC, Fortune, City Bank, Uttara Bank and ifad Autos.
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