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Rupali Bank, the only listed state-run lender, is lacking in its capital adequacy ratio, said its audit report for 2021.
The lender will be required to maintain a minimum capital to risk weighted assets ratio (CRAR) of 10 per cent of the total risk weighted assets (RWA) in line with Basel III, it said.
The CRAR is known as capital adequacy ratio, meaning the ratio of a bank’s capital to its risk. A bank’s CRAR ensures that the bank can absorb a reasonable amount of loss and complies with statutory capital requirements.
However, Rupali Bank maintained a CRAR of Tk 2,366.56 crore against a required Tk 4,252.84 crore, meaning a shortfall of Tk 1,886.28 crore, that is 5.56 per cent instead of 10 per cent, the auditor said in its emphasis of matter paragraph.
Dhaka Stock Exchange (DSE) disclosed the auditor’s emphasis of matter paragraph on its website yesterday.
If an auditor considers it is necessary to draw users’ attention to a matter presented or disclosed in the financial statements that is of such importance that it is fundamental to users’ understanding of the financial statements, the auditor includes the emphasis of matter paragraph in the auditor’s report.
In the paragraph, the auditor said the government injected Tk 679.99 crore in the form of share money deposits for the issuance of share.
Rupali Bank has already sent letters to the Ministry of Finance on November 8 for approval of the issuance of shares but the approval has not yet been received in this regard.
Last week, the bank declared 2 per cent stock dividend for shareholders for 2021. Its earnings per share stood at Tk 1.10 in the year whereas it was Tk 0.45 in the previous year.
Giving out the bonus shares, the directors recommended strengthening the capital base of the bank to support business growth and maintain a CRAR as per Bangladesh Bank guidelines, said the bank.
Its paid-up capital was Tk 455 crore while its reserve and surpluses Tk 690 crore, according to DSE data.
Stocks of Rupali Bank closed 1.10 per cent higher at Tk 27.50 at the DSE yesterday.
(TDS)
