Rejaul Karim Byron

A leading state-owned commercial bank logged 136 percent higher profit last year from its investments in the capital market alone, compared with the previous year.

Sonali Bank earned profits of Tk 177 crore in 2010 from its investments in the stockmarket, up from Tk 75 crore the previous year, its officials said. The bank's profit from other ventures increased 41 percent.

Alongside the private banks, all four state-owned commercial bank (SCB) made good profits last year, thanks to their investments in the share market.

Janata Bank made the highest profit from the stock investments, followed by Agrani, the officials of SCBs said.

A high official of Janata Bank said: “Our profit from stockmarket rose satisfactorily and we were also considerably successful in other banking businesses."

"Deposit growth and loan disbursement increased and the number of loss-making branches decreased substantially.”

The officials of the SCBs told The Daily Star that they made huge investments as institutional investors in 2010.

Sonali Bank Chairman Kazi Baharul Islam said they got a big profit from share market. Their profit from other ventures was also considerable.

Islam said he was the convener of the government reform committee for the SCBs. “We, the chairpersons and managing directors, frequently sat together and worked with a common approach. And so the SCBs made handsome profit even outside the stockmarket.”

In 2010 four SCBs -- Sonali, Janata, Agrani and Rupali -- increased their average operational profit by 48 percent to Tk 3,626 crore, which was Tk 2,442 crore the previous year.

Sonali Bank's profit rose by 51 percent and stood at Tk 1,102 crore, Janata Bank's 40 percent to Tk 1,203 crore, Agrani's 67 percent to Tk 1,077 crore and Rupali's 17 percent to Tk 244 crore.

An official of Sonali Bank said the banks took rather cautious steps while investing in the capital market. We have formulated a set of rules for judicious investment in the share market holding special board meetings, he said.

In future, they will make investments in the share market after analysing the balance sheet, price-earning ratio, dividend and profitability of the company concerned.

The SCB officials said they could cut the number of loss-making branches as their overall profit went up. Sonali Bank's loss-making branches came down to 90 in 2010 from last year's 180, while Rupali Bank's loss-incurring branches came down to 22 from 58.

News: The Daily Star /Bangladesh/17 Jan 2011