BoB makes profit of over Nu 1.25bn in 2019

BoB makes profit of over Nu 1.25bn in 2019

Bank of Bhutan (BoB) made a net profit after tax (PAT) of over Nu 1.25bn last year. The bank’s profit has been increasing over the year.

In 2017, they made net profit of Nu 790mn and in 2018 they made profit of Nu 1.04bn.

According to the annual report 2019 of BoB, there is an increase of 20.78% in net profit compared to 2018.

The report states that the year 2019 was an excellent year for the bank even though the Bhutanese financial market in general did not perform well.

The media focal person of BoB, Passang Norbu said that the profit is attributed to due to increase in loans and advances from Nu 35.51bn in 2018 to Nu 43.79bn in 2019.

Financial performance

The total loan portfolio has increased by 23.30% from 36.43bn in 2018 to 44.69bn in 2019. The non-performing loan (NPL) asset was at 3.61%. The increase in credit is mainly attributed to reduced lending rates and aggressive marketing.

According to the report, the housing sector has the highest loan disbursement with Nu 14.22bn followed by service sector with Nu 12.19bn and consumer loan with Nu 4.6bn in 2019.

The NPL has decreased in the year 2019 as compared to previous year. In 2019 the total NPL stands at Nu 1.89bn and in 2018 the total NPL was Nu 2.32bn.

Similarly, the housing sector has the highest NPL with Nu 6.68bn followed by transport sector with Nu 4.54bn.

Deposits from customers continued to grow and have increased from Nu 46.53bn in 2018 to 59.26bn in 2019. The higher deposits increased interest expenses from Nu 1.4bn in 2018 to Nu 1.7bn in 2019.

The total capital reserves of the bank increased by 11.81% in 2019, an increase from Nu 7.07bn in 2018 to Nu 7.9bn in 2019 before declaring dividend and the revenue increased with Nu 4.02bn in 2018 from Nu 4.51bn in 2019.

In 2019, the board has approved a dividend of Nu 21.25 per share amounting to Nu 637.37mn to its share holders.

However, it states that with the bank’s plan to establish its Wholly Owned Subsidiary (WOS) office in India in 2020, the board recommends retaining all the profit of the year in order to build a reserve for opening and implementation of the WOS office in India. This will reduce the burden on the shareholders of injecting Nu 5bn, which is the estimated capital fund requirement for opening the WOS in India.


Some of the challenges that the bank faced in 2019 were managing the expected growth in profit due to slowdown in the economy. The country’s Gross Domestic Product (GDP) didn’t grow as expected and it was one of the lowest at around 3.03%.

In addition, national credit growth was only 13.09%. The bank also had to manage its liquidity by increasing its deposit interest rates which increased the cost of fund.

Operational highlights

The report states that the year 2019 was an eventful year for bank marking the end of Golden Jubilee celebration. BoB launched the dzongkha version of the mBoB application and website besides launching the keyboard banking services.

In order to improve the internal process and risk management, BoB implemented a credit scoring system and anti-money laundering or countering financial terrorism system. 

Dechen Dolkar from Thimphu