Operating profits of most of the scheduled banks increased significantly in the just-concluded year of 2017 amid rampant credit disbursements by the banks, said senior bank officials.
Out of 28 banks, data of which were available till Sunday, operating profits of 27 banks rose in the year.
Relatively calm political situation, moderate rise in export earnings and significant rise in import payments in 2017 compared with those in the previous year also put a positive impact on the banks’ financial estimates, the officials said.
They said that as banks were grappling with excess liquidity in 2006,
most of the banks went for aggressive lending in 2017, resulting in a
rise in their operating profits.
Bangladesh Bank officials said that due to aggressive lending the domestic credit disbursement by banks rose over 13 per cent in 2017 compared with that in the previous year.
‘Some of the banks were so aggressive in 2017 that the private sector credit growth hit 19 per cent year-on-year in
November of the year, which is more than five and a half years high,’ said an official.
The central bank recently fined three banks for aggressive lending while warned a number of other banks.
Besides, the defaulted loans of the banks hit Tk 80,000 crore as of September 30, 2017.
BB officials said that if the banks had not
brought down their defaulted loans, their net profit would take a hit in final count as they
would have to keep provisions against the defaulted loans.
Islami Bank Bangladesh posted the highest operating profit — Tk 2,250 crore — among the scheduled banks in 2017. The bank’s operating profit was Tk 1,546 in 2016.
The operating profit of Agrani Bank increased to Tk 950 crore in the year 2017 from Tk 589 crore in the previous year while that of Pubali Bank rose to Tk 915 crore from Tk 702 crore.
Al-Arafah Islami Bank made Tk 809 crore in operating profit in 2017 against Tk 675 crore in the previous year.
Dutch-Bangla Bank’s operating profit in 2017 stood at Tk 750 crore while the figure was Tk 552 crore a year ago.
Operating profit of Eastern Bank rose to Tk 750 crore from Tk 641 crore, EXIM Bank Tk 711 crore from Tk 600 crore, Marcentile Bank Tk 711 crore from Tk 439 crore, Bank Asia Tk 670 crore from Tk 593 crore and Social Islami Bank Tk 660 crore from Tk 580 crore.
Rupali Bank made Tk 511 crore in operating profit in 2017 against its losses of Tk 87 crore in the previous year.
Scam-hit Farmers Bank was the lone bank that witnessed a profit fall of Tk 66 crore as its operating profit declined to Tk 26 crore in the year 2017 from Tk 92 crore a year ago.
Former Association of Bankers Bangladesh president Nurul Amin told New Age that the all the major issues were favourable for the banking sector during the year.
The private sector credit grew by around
20 per cent during the year, while export and import also grew notably that contributed to the banks making improved operating profits, said
Amin, who recently went to retirement after
serving Meghna Bank as its MD.
Asked whether the banks would be able to sustain the growth in its net profits in the context of increasing amount of defaulted loans in the banking sector, he said that (sustainability) would vary bank to bank.
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