STAR BUSINESS DESK

City Bank PLC reported its highest-ever profit of Tk 1,324 crore in 2025, posting a 31 percent year-on-year growth despite a challenging economic environment. The bank had earned Tk 1,014 crore in the previous year.

On a standalone basis, profit stood at Tk 1,306 crore, while its four subsidiaries contributed an additional Tk 18 crore.

The strong performance was driven by robust income growth, disciplined cost management and prudent risk practices.

Interest income from loans rose 24 percent to Tk 5,452 crore from Tk 4,403 crore a year earlier.

Asset quality also improved, with the non-performing loan (NPL) ratio declining to 2.5 percent at the end of 2025 from 3.7 percent a year earlier, reflecting strengthened credit risk management.

Despite persistent inflationary pressure, the bank maintained its cost of deposits at 5.5 percent. Although borrowing costs rose during the year, the impact was offset by strategic investments in high-yield government securities.

As a result, the contribution of such investments to the bank’s total operating income of Tk 4,888 crore increased to 26 percent. Net investment income, after fund costs, stood at Tk 1,274 crore.

Mashrur Arefin, managing director and CEO of the bank, said higher provisioning for bad loans prevented profit from reaching Tk 1,500 crore, which had been his personal target.

“Encouragingly, strong income is being generated across all core banking segments. Retail banking and cards have already overtaken corporate banking income, posting a 33 percent growth,” he said.

He added that small business, nano, retail and credit card portfolios performed well, while the bank maintained leadership in LC business and kept its cost of deposits stable.

However, he noted concerns over corporate and medium enterprise lending portfolios amid domestic and global economic challenges.

Maintaining a cost-to-income ratio below 45 percent for a bank with around 8,000 employees remains a major achievement, he added.

The bank also recorded the highest trade business volume among local banks at $8.01 billion, boosting commission and fee income. Earnings from trade services reached Tk 526 crore, while retail banking and cards generated Tk 471 crore.

Total fee and commission income rose to Tk 997 crore, accounting for 21 percent of the bank’s total operating income.

Cost efficiency remained a key strength. Despite inflation and the full-year impact of salary revisions implemented in December 2024, the bank kept its cost-to-income ratio at 44 percent. Against total income of Tk 4,888 crore, costs stood at Tk 2,160 crore.

To bolster financial resilience, the bank raised provision expenses to Tk 815 crore from Tk 628 crore a year earlier, lifting the provision coverage ratio to 128 percent by the end of 2025.