City Bank recorded a 34 per cent year-on-year growth in profit for the second quarter ending in June, largely due to higher income from investments in government securities.
The consolidated earnings per share (EPS) rose to Tk 1.55 for April-June this year, compared to Tk 1.16 during the same period last year, according to the bank’s un-audited financial statement approved at a board meeting on Sunday.
While net interest income, the core source of earnings for banks, remained relatively modest, gains from investments in Treasury bills and bonds contributed significantly to the overall profit in a challenging economic climate affected by inflation.
In a statement, the bank said that strategic investments in government securities helped increase investment income, offsetting the lower net interest income and covering rising operating expenses.
Following the earnings disclosure, City Bank’s share price rose by 3.38 per cent to Tk 24.5 on the Dhaka Stock Exchange on Monday. Over the past month, the stock has climbed more than 24 per cent.
The bank’s earnings per share for the first half of 2025 reached Tk 2.23, reflecting a 21 per cent year-on-year increase. Net operating cash flow per share surged to Tk 18.04 in the first half of the year, up from Tk 2.87 a year ago. This represents more than a sixfold rise, primarily driven by increased customer deposits.
City Bank’s net asset value per share rose to Tk 35.60 at the end of June, compared to Tk 34.26 at the end of December, in line with the growth in profits.
While the bank has not yet published its full financial statements for Q2, it has announced plans to hold an earnings disclosure event on July 31.
Bangladesh Bank data shows that deposits at City Bank, including in its Islamic banking division, rose by 28 per cent between December and May to Tk 564 billion.
An official from the bank, who preferred not to be named, stated that a significant portion of the surplus fund was invested in government securities, yielding strong returns from interest income.
Banking sector analysts note that recent regulatory actions, such as board restructuring, special audits, and mergers involving weaker banks, have led depositors to move funds to well-governed institutions like City Bank.
To support internal growth, the bank increased staff salaries by Tk 3 billion last year, aligning with its governance-focused strategy.
“These are the primary drivers of the performance,” said Mashrur Arefin, managing director and CEO of City Bank, in a previous statement.
Record Annual Profit in 2024
City Bank achieved its highest-ever annual profit in 2024, crossing the Tk 10 billion mark for the first time since its founding in 1983. The year-on-year profit growth stood at 59 per cent, again driven by strong returns from government securities.
In response to the record performance, the board approved a 25 per cent dividend for 2024, split equally between cash and bonus shares.