The Chittagong Stock Exchange (CSE) has continued to face losses from its core operations while generating profits mainly from interest earned on shareholders’ funds invested in fixed deposits, treasury bills and bonds, raising questions over its dividend policy and employee benefit allocations.

The exchange recorded operating revenue of Tk24.48 crore in FY2024-25 against operating expenses of Tk39.08 crore, resulting in an operating loss of Tk14.60 crore, according to its annual report.

In contrast, CSE earned Tk49.10 crore in net interest income from investments worth Tk400.36 crore in fixed deposits and treasury bills and bonds. Of this income, Tk2.09 crore was allocated to the Workers’ Profit Participation Fund (WPPF) and welfare fund, compared with Tk2.12 crore in the previous financial year.

Despite its operating losses, the exchange’s board recommended a 3.50% cash dividend for shareholders for FY25, down from 5% in the previous year.

CSE Managing Director Saifur Rahman Mazumder said lower trading activity had been causing operating losses for several years. He maintained that the allocation to the WPPF had been made in compliance with the law, adding that CSE had not received any exemption of the kind granted to certain banks and insurance companies.

The exchange’s operating loss increased by 37.67% year-on-year to Tk14.60 crore in FY25 from Tk10.61 crore in the previous year.

Meanwhile, human resource expenses remained almost unchanged at Tk17.49 crore, compared with Tk17.47 crore a year earlier. This included Tk1.22 crore in remuneration for the managing director and Tk45.91 lakh for the chief regulatory officer.

The exchange also spent Tk15.60 crore on salaries, bonuses, gratuity, provident fund, medical facilities and other benefits for management-level employees and staff. Directors’ honorariums and other expenses amounted to Tk21.08 lakh.

Investment income remained the exchange’s primary source of profit. During FY25, CSE earned Tk50.14 crore in interest income against interest expenses of Tk1.04 crore, resulting in net interest income of Tk49.10 crore.

Treasury bills generated the largest share of interest income at Tk25.18 crore, followed by fixed deposits at Tk12.75 crore. Interest from short-term deposit accounts amounted to Tk7.66 crore, while zero-coupon bonds contributed Tk4.55 crore.

The annual report also highlighted concerns over the recovery of matured fixed deposits held with several financially troubled institutions.

According to the auditors, CSE had invested Tk12 crore in International Leasing and Financial Services, Tk10 crore in Phoenix Finance, Tk9 crore in Bangladesh Finance and Investment, Tk6.77 crore in Union Capital and Tk1.71 crore in Prime Finance and Investment.

Although these deposits matured by 2020, the full amounts had not been recovered by June 30, 2025.

The auditors reported that CSE had recovered Tk1.88 crore from Union Capital, Tk84 lakh from Prime Finance and Tk2 crore from International Leasing. However, approximately Tk34.76 crore in principal remained unrealised, alongside accumulated interest of Tk2.85 crore.

Despite earning substantial interest income from investments, CSE’s overall financial performance weakened during the year.

Its net profit declined 9.35% to Tk28.74 crore in FY25 from Tk31.71 crore in the previous financial year. Earnings per share (EPS) also fell to Tk0.45 from Tk0.50.

CSE has a paid-up capital of Tk634.52 crore. Its retained earnings stood at Tk47.68 crore at the end of FY25, down from Tk52.75 crore a year earlier.