3:48 pm - Sunday August 20, 2017

Banks show mixed performance last year

The country’s scheduled banks in the just-concluded year showed a mixed performance as some banks posted healthy operating profit while other banks lost their profitability due to business stagnation amid political unrest.

A BB official said on the last day of 2013 that the banking sector had faced different types of crisis in the concluded year as the private sector plunged in a debacle due to the frequent violence amid political disputes ahead of the general elections.

Bangladesh-banking-sectorThe credit demand for the private sector declined significantly in the period as the businesspeople were reluctant to expand their enterprises by taking credit from the banks which ultimately put negative impact on the banks’ profit, he said.

According to him, the credit disbursement is the pivotal business for the banks and it mainly controls their profit, reports the New Age.

BB data showed that the credit growth in the private sector declined continuously in the last few months which stood at 11.04 per cent in October against 20.60 per cent in the corresponding month of 2012.

Due to a lower loan demand, majority number of the banks declined their interest rate on lending and deposit products, he said.

Islami Bank Bangladesh posted the highest Tk 1,600-crore profit in the banking sector in 2013 although its profit was Tk 1,830 crore in 2012.

Profit of Prime Bank declined to Tk 850 crore in the last year from Tk 976 crore in 2012 while Pubali Bank’s profit increased to Tk 815 crore from Tk 640 crore.

Profit of BASIC Bank declined to Tk 178 crore in 2013 from Tk 285 crore in 2012 and that of Standard Bank to Tk 330 crore from Tk 354 crore.

Helal Ahmed Chowdhury, managing director of Pubali Bank, told New Age that the political unrest had put an adverse impact on the banking sector as the entrepreneurs shrank their business.

The banks’ import business decreased significantly in 2013 as the import of capital machinery and the industrial materials declined, he said.

Banks usually earn a good amount of profit from the LC opening and settlement, Helal said.

Besides, the financial scams in the banking sector also hit the banks’ business in the last year, he said.

Helal said that the banks which were able to manage their treasury operation successfully in the last year had finally achieved profit.

The banks have earned significant amount of profit by investing government securities as the regular business faced a recession due to the unfriendly business environment, Helal said.


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