30 March, 2009 - Following the annual general meeting, Bhutan National Bank (BNB) has declared a 28.5 percent dividend to its shareholders, along with three bonus shares for every two held. On the other hand, Bank of Bhutan (BoB), in consultation with its shareholders, Druk Holdings and Investments and State Bank of India have decided to plough back profit to offset the global economic recession.
BNB’s net profit amounted to Nu 310 million, showing an increase of around 124 percent compared to Nu 249 million in 2007. “It’s been another exceptional year with continuous growth in the past few years,” said the chief executive officer of BNB. The bank will be paying a total of Nu 101,322,487.5 to its 4,357 shareholders.
BoB recorded a profit of Nu 168 million, a decline by 8.5 percent as compared to its Nu 183 million profit in 2007. “This is because of the increase in provisions. Our total income earned for 2008 in general increased by 36 percent from Nu 813 million in 2007 to Nu 951 million in 2008,” said the chief executive officer of BoB, Kinga Tshering.
He added that it is the strategy to strengthen the bank’s capital base, meet the RMA statutory requirement of Nu 300 million of paid up capital and strengthen the capital. “The provisioning of Nu 220 million from its 2008 operating profit against the industrial loans will prepare the bank for further difficult times expected in 2009.”
The provision will also be used for huge investments of over Nu 200 million that the bank is currently investing in its new technology platform and service delivery channels.
On account of the rescheduled loan repayment, mainly from steel and ferro industries in Pasakha, according to RMA regulations, both banks had increased provisions, recorded as Nu 113 million for BNB, and Nu 220 million for BoB. In 2007, BNB’s provision was Nu 112.85 million; it was Nu 71 million for BoB.
BoB’s Kinga Tshering said that the bank, earlier in December 2008, had increased its paid-up capital from Nu 100 million to Nu 200 million. He added that, in addition to it, DHI and SBI have also approved the injection of fresh capital of Nu 200 million to the paid up capital, which will increase the overall paid up capital of the bank to over Nu 564 million for 2009.
“To prepare ourselves against the new banks, we’re mainly focusing on our technology this year and have also informed our branch offices to be more active,” he said.
“The bank has over a billion in reserve and a strong human resource to face any challenges against the global economic recession,” said Kipchu Tshering.
Both the banks recently declared three months’ bonus to their employees.
By Passang Norbu
passa@kuensel.com.bt
