Introduction to SBAC Bank’s Financial Situation
The South Bangla Agriculture and Commerce (SBAC) Bank has faced a significant challenge in its financial performance for the year 2024. According to its auditor’s report, the bank ended 2024 with a provision shortfall of Tk810.75 crore, primarily due to a substantial increase in classified loans.
Provision Shortfall and Auditor’s Report
The total required provisioning against loans, advances, and lease or investment rose sharply to Tk1,143 crore last year, which was Tk382 crore in 2023. However, the bank managed to maintain a provision of only Tk487.17 crore, resulting in a significant shortfall. In 2023, the bank had maintained a provision of Tk346.43 crore. Despite the shortfall, the Bangladesh Bank has allowed the bank to finalize its 2024 annual report.
Financial Performance of SBAC Bank
The bank’s net interest income increased by 17% to Tk193.76 crore, while its total operating income surged by 13.58% to Tk576.85 crore. Nevertheless, due to the increase in provisioning requirements, the bank’s net profit dropped by 80% to just Tk10.94 crore. The earnings per share (EPS) stood at Tk0.13. As a result of the provisioning shortfall, the bank has been barred from declaring any dividend for 2024.
Comparison with Previous Years
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.
Current Market Situation
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.
Conclusion
In conclusion, the SBAC Bank’s financial performance for 2024 has been significantly impacted by the increase in classified loans, resulting in a substantial provision shortfall. Despite this challenge, the bank has been allowed to finalize its annual report. The bank’s financial situation highlights the importance of prudent risk management and provisioning practices in the banking sector. It is essential for the bank to address its provisioning shortfall and improve its financial performance to maintain investor confidence and ensure long-term sustainability.
