Prime Bank valuation report: fair value BDT 7.4–38.6 (Oct 2026)

Fair value BDT 7–39: the price of 29.4 already assumes the treasury-funded ROE settles near 13%

We put Prime Bank's fair value at BDT 7–39, base 25 (probability-weighted 24.2), against a price of 29.4. Standalone profit rose 20% to BDT 8.9bn in FY2025 [1 p.88] and 10.8% to BDT 6.8bn in the nine months to September 2026 (EPS 5.58) [2 p.9]. Reported net interest income fell from BDT 9.2bn in FY2024 to 3.8bn in FY2025 and 1.2bn in 9M 2026, while investment income on government securities rose to 17.3bn and 16.2bn [s1 p.88; s2 p.9]. That comparison flatters treasury, because interest on the deposits that fund the bond book sits inside NII. On a gross basis investment income was 34% of interest plus investment income in FY2025, up from 25% in FY2024 (model on [1 p.88]).

Charging the bond book its share of funding cost, treasury contributed about BDT 5.5bn net, 21% of FY2025 operating income, and lending NII about 15.6bn (model, [19]): lending is still the larger earner, but treasury is the part that moves. The bank grew deposits 24% in FY2025 and 9.6% in nine months of 2026 but loans only 2.9% and 2.7% [s1 p.88; s2 p.7], so the surplus went into bonds yielding about 10%. As those yields drift toward the 9.27% 10-year T-bond [6], our forecast has EPS of BDT 7.30 in FY2026F, 6.86 in FY2027F and 7.36 in FY2028F, and ROE easing from 20.9% in FY2025 to 13.8%.

For the long run we reset the bond yield to the T-bond less 1pp (8.27%), let deposit costs follow 30% of that fall and use the five-year average credit cost of 0.78%. That gives a normalised ROE of 13.2% against a 16.7% cost of equity, so the bank justifies 0.64x book. The price implies a sustainable ROE of about 14.5%, which is close to ours: the market is not paying for the FY2025 peak, and the stock trades at 0.72x September 2026 book.

We rate uncertainty High. The range is wide, BDT 7 to 39, because with lending NII this thin small changes in bond yields or deposit costs move profit a lot: a 2pp lower investment yield from FY2027 cuts FY2027F EPS to BDT 4.15. The stock rose 34% in two years against 3% for the DSEX [5]. The latest period in this report is the nine months to 30 September 2026.

Prime Bank is a BDT 687bn corporate and trade-finance bank with 149 branches; subsidiaries add only about 2% of profit

Prime Bank's standalone assets were BDT 687.2bn in September 2026, up from 388.1bn at end-2021 [s2 p.7; s1 p.88]. It is a second-generation private bank (licensed 1995, listed 1999) with 149 branches including 5 Islamic branches, 3 offshore banking units, 10 sub-branches and 174 agent outlets, and about 3,090 staff [s1 p.186, p.77]. Its book leans to corporate and trade finance: SME loans were only 3.99% of the book in FY2025, down from 12.90% in FY2021 [1 p.88], and the corporate segment's NPL is 0.23% [1 p.78].

Trade is the franchise. Imports handled were BDT 326.4bn and exports 254.3bn in FY2025, and remittance 63.7bn, up 71% [1 p.88]; management reports imports up 29% to US$2,673mn and remittance up 68% to US$521mn [1 p.78]. Bills purchased and discounted, mostly foreign export bills, were BDT 71.0bn in September 2026, a fifth of loans [2 p.15]; the offshore units, funded by BDT 74.7bn of foreign borrowing, earned 1.3bn in FY2025 [1 p.348].

The Islamic window is a drag, not a growth engine. Its deposits rose to BDT 72.5bn (16% of the bank's) at end-2025, but its financing fell to 32.3bn and it parked 13.0bn at Bangladesh Bank and 17.1bn in government Islamic securities [1 p.330]. Profit paid on mudaraba deposits was BDT 3.9bn against 2.7bn of investment income, and after 1.4bn of provisions the window lost 2.30bn before tax in FY2025, after a 0.57bn profit in FY2024 [1 p.332]. That loss equals 18% of the bank's FY2025 pre-tax profit of 12.68bn [1 p.88]. Its financing-to-deposit ratio fell from 62% to 39% [1 p.88]. We model it as its own driver: the base case holds the FY2025 loss (it is already inside the bank-wide lines); the bear case widens it by BDT 0.5bn in FY2027F and 0.75bn in FY2028F, and the bull case narrows it by 0.5bn and 1.0bn as mudaraba term deposits reprice. A loss widening on the bear path takes fair value to BDT 20.6; breaking even by FY2028F lifts it to 32.8. The 2026 interims do not report the window separately.

Subsidiaries are small. The five together earned about BDT 0.23bn in FY2025 against the bank's 8.9bn, and consolidated profit was 9.1bn [s1 p.243, p.344]; in 9M 2026 the consolidated figure exceeded standalone by only BDT 45mn [2 p.34]. Their carrying value is BDT 4.5bn, under 10% of book [2 p.17]. On our rule a subsidiary is significant at 10% of profit, assets or value, so none is, and we do not use a sum of the parts; they stay in book at cost. The one to watch is Prime Bank Fintech, which received Bangladesh Bank approval for mobile financial services in March 2026 [1 p.78]; it lost BDT 15mn in its first year [1 p.344].

Deposits grew 20.2% in the year to June 2026 against 10.7% for the system, but a 30% CASA ratio keeps funding costly

Prime Bank's deposits grew 20.2% and its loans 4.1% in the twelve months to June 2026 (BDT 385.8bn to 463.9bn and 334.2bn to 347.8bn), against 10.7% and 4.3% for the banking system over the same period [s3 p.7; s4 p.7; s7 Table-102]. It added 86.1bn in FY2025 (+24.0%) and 42.9bn in the nine months to September 2026 (+9.6%) [s1 p.88; s2 p.7]. Its June-2026 share is small: about 2% of system deposits of BDT 22.1trn (our calculation from [s7 Table-102] and the bank's balance sheet).

The mix is the weak point. Management reports that the CASA ratio dropped from 34% to 30% in FY2025 and that the cost of deposits rose from 4.73% to 5.67% as a result [1 p.78]. On our simpler balance-sheet measure (current plus savings lines over total deposits, which counts some balances management excludes) the share was 36.7% at end-2025 and 38.6% in September 2026, as savings deposits rose 25% in nine months [2 p.7]. Prime does not appear to buy deposits with rate: its reported FY2025 average cost of deposit was 5.67% [1 p.89], while the system's weighted-average deposit rate was 6.31% in June 2025 and 6.21% in June 2026 [s7 Table-102]. The measures differ (Prime's is a daily-average cost over calendar 2025; BB's is a point-in-time contractual rate), so we read the roughly 0.5–0.6pp gap as indicative only; it is the room competitors have to bid for its term deposits. The bank also carries foreign borrowings of BDT 58.6bn, which cost 3.9bn of interest in FY2025, and a BDT 14.4bn treasury-bill repo at end-2025 that it has since repaid [s1 p.307; s2 p.18]. Its reported cost of fund was 8.35% against a 9.80% yield on advances, a spread of only 1.45pp on that basis [1 p.89].

Liquidity is ample: the statutory liquidity ratio held was 42.84% against 13% required at end-2025, the liquidity coverage ratio 329% and loans 79% of deposits on our simple measure (68.28% conventional credit-deposit ratio as reported) [s1 p.88–89]. The money market is tight, with overnight call money at 9.24% on 29-Oct-2026, above the 91-day bill at 8.56% [6]; that keeps pressure on term-deposit rates even as bond yields fall.

We model deposits growing 2% in Q4 2026, 11% in FY2027F and 10% in FY2028F, close to the system. Holding growth at 5% from FY2027 costs about 26% of fair value: new deposits cost about 6.5% and are invested at about 9.3%, so slower growth shrinks the profitable bond book.

Treasury earned 21% of FY2025 operating income net of funding, but a 2pp fall in bond yields cuts FY2027F EPS 39%

Interest income on loans barely covers interest paid on deposits and borrowings. Interest income grew 6% to BDT 33.0bn in FY2025 while interest expense rose 33% to 29.2bn, so net interest income fell 59% to 3.8bn [1 p.88]. In 9M 2026 it was 1.2bn against 3.4bn a year earlier [2 p.9]. On our ratios the yield on average loans was 9.47% in FY2025 against interest expense of 7.27% of average deposits, a spread of 2.20%, down from 4.4pp in FY2022 (model on [1 p.88]).

The bond book carries the earnings. Investment income was BDT 17.3bn in FY2025: 16.3bn interest on treasury bills, bonds and reverse repo, 1.2bn gains on government-security trading and 0.1bn dividends, less 0.4bn trading losses [1 p.307]. Government securities rose from BDT 123.9bn to 224.9bn between end-2024 and September 2026 [s1 p.247; s2 p.7]; 171.7bn of that is bonds [2 p.14]. Our yield on average investments was 10.6% in FY2025, about 10.1% in 9M 2026 and 9.3% annualised in Q3 (our calculation from [s2 p.7, p.9]).

Three margin measures tell different stories. The bank reports NIM of 1.07% for FY2025 (2.78% in FY2024) and a spread of 4.13% (yield on advances 9.80% less cost of deposit 5.67%) [1 p.89]. Reported NIM excludes investment income but charges all interest expense, including the cost of deposits that fund bonds, so it collapses as the bond book grows; the reported spread uses deposit cost only, leaving out BDT 7.5bn of borrowing interest [1 p.307]. Our core NIM, net interest plus investment income over loans and investments, adds the bond income back: 4.46% in FY2024, 4.12% in FY2025 and 3.90% in FY2028F. It is the measure that matches how the bank actually earns. We forecast the loan yield easing from 9.6% (Q4 2026, annualised) to 9.0% by FY2028F on our assumption of gradual policy-rate cuts (an assumption: the system weighted-average lending rate already fell from 12.33% to 12.13% in FY2025-26 [s7 Table-102]), interest expense on deposits from 6.5% to 6.0%, and the investment yield from 9.3% to 8.6%, toward the 9.27% 10-year T-bond [6]. Investment income keeps growing because the bond book does (to BDT 321bn by FY2028F), and its share of gross interest and investment income rises to 42% by FY2028F.

Fees follow trade. Commission, exchange and brokerage was flat at BDT 2.9bn in FY2025: L/C commissions (BDT 1.19bn incl. back-to-back) and guarantee commissions (0.28bn) rose while FX gains fell from 1.45bn to 1.26bn [1 p.308]. In 9M 2026 it fell 5.3% to BDT 2.15bn, while other income (ATM, cards, retail fees) rose 24% to 1.34bn [2 p.9]. Off-balance-sheet guarantees and L/Cs rose from BDT 97.4bn to 133.5bn in nine months [2 p.8], which supports our 6–7% fee growth in FY2027–28F.

Costs grow faster than income. Operating expenses rose 18% in FY2025 and 12.1% in 9M 2026 [s1 p.88; s2 p.9]; we grow them 12%, 11% and 10%, so cost-to-income rises from 44.2% to 46.9% in FY2028F. Cash conversion is sound: interest received in cash was BDT 47.6bn in FY2025, 94.6% of interest plus investment income [1 p.251], and 40.2bn in 9M 2026 [2 p.10].

The sensitivity is large. If investment yields are 1pp below our base in FY2027–28F, FY2027F EPS falls to BDT 5.51 from 6.86; at 2pp lower it is 4.15. A 0.5pp lower deposit cost adds about BDT 1.36.

Gross NPL fell to 2.73% in FY2025 after BDT 6.8bn of write-offs; bad loans are fully provided

Classified loans fell from BDT 14.5bn (4.22%) at end-2024 to 9.6bn (2.73%) at end-2025 [s1 p.89, p.286]. Bad/loss loans were 8.5bn of that and are provided at 100%; sub-standard loans fell from 3.5bn to 0.4bn [1 p.286]. The fall came mostly from write-offs: BDT 6.76bn was written off in FY2025 against 2.62bn in FY2024, and cumulative written-off loans reached 31.4bn [1 p.286]. Recoveries from written-off loans were BDT 1.31bn [1 p.286]. Special-mention loans rose from 5.2bn to 8.0bn [1 p.286], the pool from which new NPLs come.

The 2026 interim statements do not disclose loan classification, so we cannot measure NPL after December 2025; this is the largest gap in our data. What they show: specific provision rose from BDT 9.53bn to 9.70bn in nine months after 1.29bn of write-offs and 0.91bn of recoveries, and interest suspense rose from 6.22bn to 6.93bn [2 p.21]. A rising suspense account means more loans have stopped paying interest, so we assume gross NPL drifts up to 3.0–3.4% in the base case and 4.5–7% in the bear case. We cannot compare with the system classified-loan ratio: Bangladesh Bank's quarterly classified-loan data is not in our data set.

Credit cost has been low: 0.45% of average loans in FY2025 and 0.42% annualised in 9M 2026 (our ratios on [s1 p.88; s2 p.9]), against a five-year average of 0.78%. We use 0.8% from Q4 2026, and 1.2% in the bear case. In the valuation half of any credit cost above the five-year average in FY2028F carries into sustainable ROE, so lasting asset-quality damage lowers value. Adjusted book barely differs from reported book: with bad loans fully provided, net NPL after specific provision was about BDT 0.1bn at end-2025, and our haircut on FY2027F net NPL is BDT 0.93bn. Adjusted book is BDT 45.5bn, or 37.3 a share.

CRAR of 18.07% leaves BDT 15.7bn above the minimum, but paid-up capital of Tk1,219 crore bars cash dividends from FY2026

Standalone CRAR was 18.07% at end-2025 with Tier-1 at 14.57%, against a 12.5% requirement including the buffer [1 p.89]. Tier-1 rose from BDT 33.9bn to 41.0bn in FY2025 while Tier-2 fell to 9.9bn as subordinated bonds amortise (BDT 1.4bn redeemed each year) [s1 p.89, p.251]. Risk-weighted assets were only 43% of total assets because government securities carry no credit risk weight; that is also why moving money from bonds to loans would use capital. The 2026 interims do not disclose capital ratios, so September figures are a gap.

The board paid 25% cash and 5% stock for FY2025, after 17.5% cash for each of FY2021–23 and 17.5% cash plus 2.5% stock for FY2024 [1 p.89]. The cash part, BDT 2.90bn, was paid in 2026 [2 p.10]; management said the adjusted CRAR would still be 17.04% after it [1 p.78]. Bangladesh Bank also restricts dividends at banks with high NPLs, provision shortfalls or deferrals, or capital below requirement; Prime passes the four such tests we can check from the filings.

A Bangladesh Bank circular of 23 May 2026 bars banks with paid-up capital below Tk2,000 crore from declaring cash dividends, starting with dividends for the year ending 31 December 2026; banks above the threshold may pay at most half of a dividend in cash, the rest in stock (reported by The Business Standard and The Daily Star [s15; s16]). Both outlets name Prime Bank among the leading banks below the threshold; its paid-up capital is Tk1,219 crore (BDT 12.19bn) [2 p.7] against authorised capital of Tk2,500 crore [1 p.88]. We found no announcement by Prime of a rights issue or other plan to raise paid-up capital in our sources (events data and the four news outlets, to 31-Oct-2026); BSEC approved a Tk775 crore 1-for-2 rights issue at Tk10 for UCB in July 2026, which takes its paid-up capital from Tk1,550 crore to about Tk2,326 crore; The Business Standard reported it as meant to clear the Tk2,000 crore threshold [s17; s18]. The Business Standard also reports that the DOS dividend circular of 13 March 2025 remains in effect alongside the new rule [15].

Our base case therefore pays no cash dividend in FY2026–28F. Profit is retained, so book and capital grow faster: CRAR rises from 18.07% at end-2025 to 18.7% in FY2028F, with BDT 23.2bn above 12.5%. The cost is value: the retained equity earns roughly our 13.2% sustainable ROE, below the 16.7% cost of equity, so base fair value falls from 28.6 with the old 33–35% payout to 25.3. The cash dividend yield on the price falls from 8.1% (FY2025) to zero until the bank crosses the threshold.

There are two routes to Tk2,000 crore. Stock dividends would have to add 64% cumulatively; at 20%, 20% and 14% for FY2026–28 the bank reaches it with the FY2028 dividend, paid in 2029. A stock dividend moves no value, so our base value spread over 2.0bn shares is BDT 15.4 per post-bonus share, the same total for today's holder of one share. A rights issue of about 781mn shares at Tk10 par would raise BDT 7.8bn; the Tk10 price follows the UCB precedent above. We value the new equity at our justified 0.64x book, not at the cash raised, because it would earn below our cost of equity: base value per post-rights share is 17.9 against a theoretical ex-rights price of 21.8, and a holder of one share who subscribes is BDT 2.3 worse off than without the issue; one who does not subscribe is diluted further. The money would earn about the bond yield after tax, so FY2027F ROE falls to 13.7% from 14.9%, and CRAR rises to 20.8%. Cash dividends could then resume at up to half of the total: a 30% payout, half in cash, would be about BDT 0.63 a share, a 2.9% yield on the ex-rights price. In the terminal period we assume a 30% cash payout once the threshold is met; at 50% from FY2029 the base would be 25.8, and with no cash payout ever 25.3.

We forecast EPS of BDT 7.30 in FY2026F, easing to 6.86 in FY2027F as bond yields fall

Our FY2026F standalone profit is BDT 8.90bn, EPS 7.30. Nine months are reported: BDT 6.80bn, with Q3 at 2.47bn [2 p.9]. We add BDT 2.09bn for Q4, below Q3 and Q4 2025 (2.76bn), because we provide at 0.8% of loans in Q4 against 0.42% so far this year and Q4 2025's unusually low 0.11bn charge (FY 1.56bn less 9M 1.45bn [s1 p.88; s2 p.9]). This report uses data to 30 September 2026; the model will be updated when the FY2026 audited statements are filed.

The balance sheet drives the forecast. Loans grow 1% in Q4, 6% and 8% in FY2027–28F; deposits 2%, 11% and 10%. Surplus funding goes into government securities, so investments reach BDT 321bn by FY2028F. Profit falls 6.0% in FY2027F as the investment yield drops 0.4pp on a larger book and costs rise 11%, then recovers 7.4% in FY2028F as deposit costs fall faster than loan yields.

There is no consensus forecast for Bangladeshi banks, and management gives no numeric profit guidance we could test; we compare with the run-rate instead. Our FY2026F EPS is -2.0% against the 9M 2026 annualised run-rate and -0.1% against FY2025.

The full statements, quarterly split and every driver are in the model tabs below the article; the scenario selector on the Assumptions sheet switches all three cases.

Fair value BDT 7–39, base 25: a 13.2% sustainable ROE justifies 0.64x adjusted book

We value Prime Bank by residual income on adjusted book (75%), with a peer median P/B on the same standalone adjusted book (10%) and a P/E on normalised earnings (15%) as cross-checks. A sum of the parts does not apply: the subsidiaries earn about 2% of profit and are under 10% of book, so they stay in book. Our cost of equity is 16.7%: the 9.268% 10-year bond cut-off of 25-Oct-2026 [6] plus a beta of 0.99 times a 7.5% equity risk premium. We measured the beta on two years of weekly returns against the DSEX: 0.98 raw, 0.99 Blume-adjusted (our calculation from [5]).

Sustainable ROE is derived, not assumed. We take FY2028F, move the investment yield from 8.6% to the T-bond less 1pp (8.27%), let deposit costs follow 30% of that fall, and reset credit cost to the five-year average. Normalised ROE is 13.2%, against 13.8% in the FY2028F forecast and a reported 20.85% in FY2025 [1 p.89]. The pass-through matters less here than at banks with a richer bond book, because our FY2028F bond yield is already close to the normalised level: with no pass-through the base is BDT 24.4, with 50% 26.0 and with 70% 26.7.

Explicit residual income over FY2026–28F has a present value of BDT 0.06bn: the bank earns about its cost of equity in FY2026F and less after. Beyond FY2028F a 13.2% ROE against a 16.7% cost of equity justifies 0.64x book, so the terminal term subtracts BDT 15.8bn. Residual income gives BDT 25.4 a share.

The peer cross-check is a plain median. A P/B-ROE regression across eight profitable DSE banks explains almost nothing (R² 0.07) and its fitted value at Prime's ROE equals the median, so we use the median P/B of 0.78x and give it only 10%. We apply it to the same standalone adjusted book as the residual-income leg (BDT 40.23 a share at September 2026, after the NPL haircut; standalone NAV 41.00 and consolidated 41.09 differ immaterially [2 p.34]), giving 31.2. The P/E leg applies 4.0x, Prime's five-year median year-end P/E (7.83x, 5.46x, 4.00x, 3.56x, 3.74x for FY2021–25 [1 p.89]), to normalised EPS of BDT 5.33. At base value the stock would trade on 0.62x September 2026 book and 3.5x FY2026F EPS. The price of 29.4 implies a sustainable ROE of about 14.5% at our cost of equity, essentially our own estimate.

The bear case is a stacked stress: investment yields fall to 7.8% by FY2028F while deposit costs only follow the base path to 6.0%, deposits grow 6%, credit cost is 1.2%, NPL rises to 7% and the Islamic window loses another BDT 0.75bn; FY2027F EPS falls to BDT 3.76 and sustainable ROE to 6.3%, with a cost of equity 1pp higher. Residual income is then small (BDT 4.4) because the bank earns far below its cost of equity; terminal growth is capped at ROE times retention (in the bear case we assume a terminal cash payout of 50% of profit once the threshold is met; because the rule caps cash at half the declared dividend, that means declaring 100% of profit, half of it in stock; at a 30% payout the bear would be BDT 5.6, by model recalculation), so a low-return bank is not assumed to compound book at 6%. The range is wide because lending NII after funding cost is thin relative to equity, so bond yields drive returns. The bull case is a plausible upside, not a best case: it changes only two drivers from the base, loan growth of 9–10% (deposits 11–12%) and an Islamic window loss that narrows by BDT 0.5bn and 1.0bn, with the cost of equity 1pp lower. Bond yields, deposit costs, credit cost and costs stay on the base path, and sustainable ROE is 15.3%, below the reported 20.6% and 20.85% of FY2024–25 and close to the FY2021–25 average of 16.4% (11.2%, 13.6%, 15.0%, 20.6%, 20.9% [1 p.89]).

Falling treasury yields are the largest risk: 60% off base fair value and 39% off FY2027F EPS

Each risk below is a workbook recalculation with one input changed from the base case. Bond-yield and deposit-cost shocks carry fully into normalised ROE; half of a credit-cost shock carries into the long run, and higher NPL raises the book haircut, so asset-quality damage lowers value as well as EPS. Zero loan growth costs little because new loans earn only slightly more than bonds after credit cost.

The Islamic window has its own driver. Its BDT 2.30bn FY2025 pre-tax loss came from paying 3.9bn on mudaraba deposits against 2.7bn of financing income, plus 1.4bn of provisions [1 p.332]. The base case keeps that loss; widening on the bear path costs 18.6% of fair value and breaking even by FY2028F adds 29.5%.

Governance and other items: the auditors gave an unmodified opinion on FY2025 with an emphasis of matter on note 2.1, preparation under Bangladesh Bank rules on loan classification and provisioning [1 p.236]. CRAB rates the bank AAA long term and ST-1 short term, after an upgrade in 2025 [s1 p.28, p.71, p.134], and the shares are in the DSE A category [1 p.24]; sponsors-directors hold 38.35%, above the 30% minimum [1 p.121]. Leadership changed in 2026: chief executive Hassan O. Rashid resigned in February to join Eastern Bank, additional managing director Faisal Rahman became acting CEO from 1 April, and he was confirmed as CEO from 24 May [s8; s9; s10; s11]. He previously led wholesale banking, the bank's core business, so we see no change in strategy yet. The Business Standard alone reported that nine directors declared plans to buy about Tk31 crore of shares in 2026 [12]. In September the bank joined Bangladesh Bank refinance schemes for green industry and ICT lending [s13; s14], which adds cheap refinance funding but at a small scale against BDT 488bn of deposits. None of the news we found addresses the Islamic window's loss or the reliance on treasury income, so our drivers are unchanged; we found no regulatory action against Prime Bank in these outlets.

• FY2026 annual results (expected by April 2027): standalone EPS near BDT 7.3, and the first 2026 classification data (NPL above 4% would point to the bear case).
• Quarterly investment income: below BDT 4.5bn (Q3 2026: 5.2bn) would mean yields are falling faster than our base.
• Interest expense on deposits: Q3 2026 ran at 6.5% annualised; above 7% again would mean deposit pricing is not easing.
• Islamic window FY2026 result: a second large loss supports the bear case.
• FY2026 dividend: any rights issue, authorised-capital change or large stock dividend aimed at the Tk2,000 crore threshold; our base case has no cash dividend.
• Prime Bank Fintech: first-year MFS customer numbers and losses.

FAQ

What is Prime Bank's fair value?

We estimate BDT 7–39 a share, base 25 and probability-weighted 24, against 29.4 on 29-Oct-2026. It blends residual income on adjusted book (75%), a peer median P/B on the same book (10%) and a P/E on normalised earnings (15%).

Why did Prime Bank's net interest income fall?

Deposits grew far faster than loans and became more expensive: interest expense rose 33% in FY2025 while interest income rose 6%, so net interest income fell from BDT 9.2bn to 3.8bn. The extra deposits went into government securities, whose income is reported separately as investment income (BDT 17.3bn).

How dependent is Prime Bank on treasury income?

Investment income was 34% of gross interest and investment income in FY2025, up from 25%; net of the cost of funding the bond book, treasury earned about 21% of operating income and lending about BDT 15.6bn. A 2pp fall in bond yields from FY2027 cuts our FY2027F EPS to BDT 4.15 from 6.86.

How good is Prime Bank's asset quality?

Gross NPL was 2.73% at end-2025, down from 4.22%, mainly after BDT 6.8bn of write-offs; bad loans are fully provided and provisions exceed the requirement by BDT 0.94bn. The 2026 interims do not disclose classification.

Can Prime Bank keep paying cash dividends?

Not under the Bangladesh Bank circular of 23 May 2026 as reported: banks with paid-up capital below Tk2,000 crore may not pay cash dividends from FY2026, and Prime's is Tk1,219 crore. It would need about 64% of stock dividends or a rights issue of about 781mn shares to qualify; we model no cash dividend in FY2026–28F.

Sources

1. Prime Bank PLC Annual Report 2025 (year to 31-Dec-2025), standalone and consolidated; page numbers are PDF pages (printed page = PDF page - 2) · link · accessed 2026-10-30
2. Prime Bank PLC condensed interim financial statements, nine months to 30-Sep-2026 (unaudited) · link · accessed 2026-10-30
3. Prime Bank PLC condensed interim financial statements, half year to 30-Jun-2025 (unaudited) · link · accessed 2026-10-31
4. Prime Bank PLC condensed interim financial statements, half year to 30-Jun-2026 (unaudited) · link · accessed 2026-10-31
5. AnalystBro market data: DSE prices (PRIMEBANK, DSEX) and bank screener, 29-Oct-2026 · link · accessed 2026-10-30
6. Bangladesh Bank call money and treasury auction pages, 29 Oct 2026 (10-year bond cut-off 9.2680% on 25-Oct-2026) · link · accessed 2026-10-30
7. Bangladesh Bank, Scheduled Banks Statistics Apr–Jun 2026 (Tables 2, 6, 39, 102) · link · accessed 2026-10-30
8. The Business Standard, 'Prime Bank CEO resigns, set to join Eastern Bank as MD', Feb 2026 · link · accessed 2026-10-30
9. The Financial Express, 'Prime Bank CEO Hassan O. Rashid resigns', Feb 2026 · link · accessed 2026-10-30
10. The Business Standard, 'Prime Bank appoints Faisal Rahman to lead as CEO', May 2026 · link · accessed 2026-10-30
11. The Daily Star, 'Faisal Rahman appointed as CEO of Prime Bank', May 2026 · link · accessed 2026-10-30
12. The Business Standard, 'Nine Prime Bank directors to buy Tk31cr worth of shares', 2026 · link · accessed 2026-10-30
13. The Business Standard, 'Prime Bank joins Bangladesh Bank refinance schemes for green industry, ICT', Sep 2026 · link · accessed 2026-10-30
14. The Daily Star, 'Prime Bank joins BB schemes for green, ICT financing', 2026 · link · accessed 2026-10-30
15. The Business Standard, 'BB bars banks with under Tk2000cr paid-up capital from declaring cash dividends', 23 May 2026 · link · accessed 2026-10-31
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