BSEC

South Bangla Agriculture and Commerce (SBAC) Bank ended 2024 with a provision shortfall of Tk810.75 crore, largely due to a surge in classified loans, according to its auditor’s report.

The private lender’s total required provisioning against loans, advances, and lease or investment rose sharply to Tk1,143 crore last year, which was Tk382 crore in 2023. 

The bank, however, managed to maintain a provision of only Tk487.17 crore, the auditor stated in its qualified opinion, citing a central bank letter on 27 April. In 2023, it managed to maintain a provision of Tk346.43 crore.

Despite the shortfall, the Bangladesh Bank has allowed the bank to finalise its 2024 annual report. 

As per SBAC Bank’s financial report, its net interest income increased by 17% to Tk193.76 crore while its total operating income surged by 13.58% to Tk576.85 crore. 

However, despite increases in profit before provision and taxation, the bank’s net profit dropped by 80% to just Tk10.94 crore, due to the increase in provisioning requirements. 

Its earnings per share (EPS) stood at Tk0.13.

Because of the provisioning shortfall, the bank has been barred from declaring any dividend for 2024. In 2023, it issued a 2% cash dividend to shareholders.

In the first quarter of this year, the bank reported that its net interest income declined by 42.62% to Tk31.03 crore while its total operating income fell by 21.45% to Tk113.24 crore. 

After maintaining provisions, its net profit dropped to Tk11.28 crore with an EPS of Tk0.14, compared to Tk19.99 crore and an EPS of Tk0.24 in the same period last year.

Yesterday, SBAC Bank’s shares closed at Tk6.60 each at the Dhaka Stock Exchange (DSE). 

SBAC Bank, which raised funds from the capital market, was listed on the bourses in 2021. As of May 2025, sponsor-directors held 68.19% of its shares, institutional investors held 16.59%, and general shareholders owned 15.22%, according to the DSE.

https://www.tbsnews.net/economy/stocks/sbac-bank-faces-tk81075cr-provision-shortfall-2024-1171481

Renata has decided to revise the terms for issuing preference shares worth Tk 3.25 billion to reduce its finance cost burden by paying off short-term bank loans.

Previously, the features of the proposed preference shares were non-cumulative, non-participative, redeemable or fully convertible. So, the conversion of preference shares into ordinary shares was left to the discretion of the issuer.

In the revised features, the company’s board of directors dropped the redeemable option, keeping all other features unchanged. That means, preference shares would be fully converted into common equity at the end of the tenure.

The share issuance plan was taken in November last year and approved by the shareholders at an extraordinary general meeting (EGM) on January 12 this year.

The board of directors at a meeting on Wednesday considered changing the plan, according to a stock exchange filing the next day. This revision is subject to approval from the Bangladesh Securities and Exchange Commission (BSEC), the company said.

Redeemable or fully convertible preference shares are a type of equity investment that combines features of both preference shares and debt or common equity.

Redeemable preference shares are bought back by the issuer at a predetermined price or date while fully convertible means the preference shares would be fully converted into common equity upon maturity.

Preference shares worth Tk 10 each, with tenure of six years, will only be issued to existing shareholders. Any unsubscribed portion will be allotted on a pro-rata basis on receiving demands through applications and through private offers.

After the conversion of preference shares Renata’s ordinary shares will increase by approximately 5.5 per cent.

“As the shares will be gradually converted into equity, no significant impact is expected on the company’s financials,” said company secretary Md Jubayer Alam.

He explained the conversion will begin in the third year after the issuance of the shares. Before conversion, preference share subscribers will receive interest at a fixed rate of 15 per cent.

Shareholders will be allowed to convert 25 per cent of their holdings of preference shares each year to complete conversion in the sixth year. Common stocks would be calculated at Tk 475 each during conversion.

Meanwhile, the stock of Renata closed at Tk 488.8 per share on Thursday, gaining 0.47 per cent from the day before on the Dhaka Stock Exchange.

Preference share, also known as preferred stock, is an exclusive share option which enables shareholders to receive dividends announced by the company before the equity shareholders.

Preferred shares typically pay steady dividends, while common stock only pays dividends if they are approved by the board of directors based on financial performance of the firm.

In the recent quarters, the drug manufacturer’s finance costs shot up, along with other costs, impacting its bottom-line growth.

Against the backdrop of high interest rates, Renata planned to issue preference shares, aiming to repay a portion of its short-term borrowings.

It is part of a debt restructuring initiative intended to mitigate liquidity crisis and interest rate risk through conversion of short-term debts to long-term borrowings. The proposed instrument is expected to strengthen Renata’s balance sheet, optimise debt-equity ratio and ensure long-term financial sustainability.

“We’re actively replacing high-cost short-term loans with low-cost long-term alternatives, including preference shares and financing from the International Finance Corporation (IFC),” said Syed S Kaiser Kabir, managing director and CEO of Renata in a recent interview with the FE.

In June last year, the company secured a $60 million loan from the US-based International Finance Corporation (IFC) to increase its working capital.

Financial Performance

Renata’s third quarter profit dropped 20 per cent year-on-year to Tk 587.62 million despite a 16 per cent growth in revenue in January-March, compared to the same period a year ago.

Finance cost jumped to Tk 456 million in January-March from Tk 230 million in the same quarter last year due to increased interest payment.

The drug maker’s profit over the nine months to March also dropped 35 per cent year-on-year to Tk 1.68 billion due to the same reasons.

However, it had secured a profit of Tk 3.62 billion in FY24, making a 55 per cent jump from the year before, supported by higher exports and cost optimisation measures.

Renata paid a 92 per cent cash dividend for FY24, up from 62.5 percent for FY23.

https://today.thefinancialexpress.com.bd/public/stock-corporate/renata-to-offer-preference-shares-to-investors-fully-convertible-into-equity-1750355461

A majority of listed state-owned enterprises (SOEs) incurred combined losses totalling Tk1,401 crore in the first nine months of the current fiscal year, with Titas Gas alone accounting for Tk947 crore due to tax-related complications, underscoring persistent inefficiencies.

In contrast, six enterprises posted a combined profit of Tk1,358 crore, primarily driven by cash-rich fuel suppliers generating significant earnings from non-operating income.

Of the total 19 government-owned listed firms, 16 have published their nine-month financials as of March. Three are yet to release their reports, while one is scheduled to publish today.

According to data available on their websites, 10 firms incurred losses while six posted profits.

Among the profitable ones, four have recorded a profit growth ranging from 37% to 240%, while two saw declines between 10% and 16%.

The major loss-making firms are—Titas Gas, Investment Corporation of Bangladesh (ICB), Dhaka Electric Supply Company (Desco) and Power Grid.

On the other hand, Jamuna Oil, Meghna Petroleum, Padma Oil, Submarine Cables, Eastern Lubricants and National Tubes are the profit-making ones.

Data showed that the combined losses of loss-making firms in the July to March period increased by Tk832 crore year-on-year while profit by the six firms surged by Tk353 crore.

An investment banker, speaking on condition of anonymity, told the Business Standard, “Some cash-rich firms are generating hefty profits from non-operating income, but their operational efficiency remains largely inadequate.”

“Others fail to make a profit due to poor asset management and a lack of competitiveness with the private sector,” he added.

Titas Gas incurs Tk974cr losses 

Titas Gas Transmission and Distribution incurred the highest Tk947.50 crore loss among the state-owned firms in the July–March period of FY25. 

The company attributed the loss to a 10.13% system loss — well above the 2% allowable limit — forcing it to bear purchase costs without corresponding revenue.

Additionally, changes in the Tax Law significantly impacted earnings.

Previously, gas transmission and distribution companies were exempt from minimum tax, allowing Titas to claim refunds on excess tax deducted at source.

However, the Finance Act 2024 revoked this exemption, leading the company to treat the entire deducted amount as a current tax expense.

A company official, requesting anonymity, said the tax policy shift was a key factor behind the loss and warned that the firm’s financial health would weaken further if the provision is not revised.

Higher provisioning hits ICB

Despite growth in its core income sources — such as dividends, capital gains, fees, commissions, and service charges — the Investment Corporation of Bangladesh (ICB) incurred a loss of Tk279.08 crore in the first nine months of the fiscal year, mainly due to increased provisioning against loans, advances, and investments.

This loss rose from Tk267 crore recorded in the same period of the previous fiscal year.

During the period, ICB’s operating income stood at Tk39.17 crore. After deducting operating expenses, its total operating loss amounted to Tk74 crore.

The corporation had to set aside Tk125 crore in provisions—more than double the Tk60.59 crore it allocated during the same period last year.

Desco’s loss narrows 

The net loss of Desco narrowed by around 71% to Tk78.55 crore with a loss per share of Tk1.98 mainly driven by higher distribution revenue, according to its unaudited financial statement. 

Its report showed that net turnover surged 16% to Tk5,410.58 crore during the period. 

In the July–March period of the previous fiscal year, Desco had incurred a loss of Tk270.81 crore due to higher operating expenses, foreign exchange losses, and debt interest.

Finance cost woes for Power Grid

Power Grid Bangladesh has incurred a loss of Tk31 crore in Q3, reversing its substantial second-quarter profit due to a sharp rise in finance costs and mounting foreign currency losses.

After incurring over Tk200 crore in losses in the first quarter (July–September) of FY25, the company recovered in the second quarter with a Tk398 crore profit.

By the end of the first half of the current fiscal year, which ended in December, it returned to a profit of Tk141 crore.

However, in the third quarter (January–March), Power Grid posted a Tk185 crore loss with per-share loss of Tk2.03, dragging it back into negative territory.

As a result, after adjusting for earlier profits, the company ended the first nine months of the fiscal year with a net loss of Tk31 crore while its revenue during the period grew by 13% to Tk2,218 crore.

During the July–March period, Power Grid’s finance expenses nearly doubled to Tk1,183 crore — comprising Tk539 crore in interest expenses and Tk644 crore in foreign currency fluctuation losses.

In the same period of the previous fiscal year, total finance expenses stood at Tk614.83 crore.

The other three loss-making firms Zeal Bangla Sugar Mills, Shympur Sugar Mills and Renwick Jajneswar Co Ltd under the Bangladesh Sugar and Food Industries Corporation (BSFIC) incurred a loss of Tk24.58 crore, Tk19.14 crore and Tk3.12 crore respectively. 

The firms have been incurring losses for years and due to excessive losses, they usually fail to pay any dividends to its shareholders for years. 

FDRs fuel Padma, Jamuna Oil and Meghna Petroleum hefty profits

Despite slight growth in core business operations, three state-owned fuel suppliers – Padma Oil, Jamuna Oil, and Meghna Petroleum – witnessed significant growth in their profit in nine months of 2024-25. 

During the July to March period, Jamuna Oil reported a 38% increase in profit, Padma Oil 61% and Meghna Petroleum by 40% compared to the same time of the previous fiscal year. 

With such substantial growth, Jamuna Oil’s profit surpassed Tk400 crore mark for the first time in the nine months to Tk404.69 crore, while Padma Oil to Tk394.85 crore and Meghna Petroleum to Tk411.83 crore.

Officials of the firms attributed this significant increase to non-operating incomes, primarily from fixed deposit receipts (FDRs) in banks. 

The cash-rich firms have significant amounts of FDRs in banks that are generating substantial gain.

The officials said, as interest rates increased in the banking industry, the earnings from non-operating income significantly jumped as well as income from operating activities surged.

Meanwhile, Bangladesh Submarine Cables reports Tk140 crore profit in the first nine months of the current fiscal year, which is a 16.76% decline over the same time of the previous fiscal year.

দেশের শেয়ারবাজারে ক্রমাগত ধসে সমালোচনার মুখে পড়েছেন বাংলাদেশ সিকিউরিটিজ অ্যান্ড এক্সচেঞ্জ কমিশনের (বিএসইসি) চেয়ারম্যান খন্দকার রাশেদ মাকসুদ। সাধারণ বিনিয়োগকারীরা ইতোমধ্যে তার পদত্যাগের দাবি তুলেছেন। এ অবস্থায় সোমবার (১৯ মে) অর্থ উপদেষ্টা ড. সালেহউদ্দিন আহমদের সঙ্গে তিনি দেখা করবেন বলে সংশ্লিষ্ট সূত্রে জানা গেছে।

বিএসইসি চেয়ারম্যান খন্দকার রাশেদ মাকসুদ অর্থ উপদেষ্টা সঙ্গে দেখা করার জন্য সময় চাইলে তাকে ১০ মিনিটের সময় দিয়েছেন। সেই অনুযায়ী সকাল ৯ টা ৫০ মিনিটে বিএসইসি চেয়ারম্যান অর্থ উপদেষ্টার সঙ্গে দেখা করবেন। 

গত বছরের ১৮ আগস্ট খন্দকার রাশেদ মাকসুদকে বিএসইসি চেয়ারম্যান পদে নিয়োগ দেয় সরকার। এরপর থেকে তিনি কঠোর হস্তে বিএসইসি অসৎ কর্মকর্তাদের অপসারণ করেন। চলতি বছরই তিনি বিএসইসি ১৬ কর্মকর্তাকে চাকরি থেকে অব্যাহতি দেন। এ সকল কর্মকর্তাদের বিরুদ্ধে দুর্নীতির অভিযোগ রয়েছে। তাদের অনেকে বিএসইসির সাবেক চেয়ারম্যান বর্তমানে দুর্নীতির অভিযোগে কারাগারে থাকা শিবলী রুবাইয়াত-উল-ইসলামের ঘনিষ্ঠ ছিলেন। https://www.risingbd.com/economics/news/606984