Most banks’ operating profits rise

HM Murtuza | Published: 01:30, Jul 02,2019


Operating profits of most of the banks rose in January-June of this year as they opted to diversify business amid growing public spending.

The net profits of the banks, however, would be affected because of the rising non-performing loans, bankers said.

Data available from 22 banks on Monday showed that operating profits of 21 banks rose in January-June of 2019 compared with that in the same period of 2018.

The other banks were still calculating their finances on the day, which was a holiday for banks.

Mutual Trust Bank managing director and chief executive officer Anis A Khan told New Age, ‘It’s the economic growth of the country that helped banks attain huge business during the period.’

As the government has been carrying out huge development works, private entities are getting different types of works thereby creating huge business scope for the banks as well, he said.

Despite the high operating profits in January-June of 2019, the banks’ net profits might be impacted by high non-performing loans, he said.

Speaking about the business of MTB, Anis said that they had managed to attain growth in operating profits in the way of diversifying business.

‘We have expanded out agent banking service along with strengthening remittance collection efforts, among others,’ he said, adding that those altogether helped MTB achieve high operating profits.

Of the banks, Islami Bank Bangladesh made highest —Tk 1,223 crore — operating profits in January-June this year against Tk 1,020 crore in the same period of the previous year.

The bank witnessed a 13.9-per cent or Tk 203 crore increase in operating profits.

Pubali Bank made the second highest — Tk 540 crore — operating profits in the first half of this year with an 18.16-per cent or Tk 83 crore increase.

Operating profits of Dutch-Bangla Bank were the third highest, Tk 510 crore, in the first half of this calendar year.

In term of growth, First Security Islami Bank’s operating profits grew highest — 77.34 per cent — to stand at Tk 227 crore in January-June this year against Tk 128 crore in the same period last year.

DBBL posted the second highest (72.88 per cent) growth in operating profits, while the growth in operating profits of Al-Arafah Islami Bank was 55.76 per cent and Shahjalal Islami Bank posted 48.83 per cent growth.

Although the banks managed to attain high operating profits in the first half of the current year, the growth in private sector credit, a major income source for the banks, slowed down significantly in recent times.

As per the Bangladesh Bank data, private sector credit growth hit a 57-month low in April this year amid rising liquidity crisis in the country’s banking sector.

As per the latest BB data, the growth dropped to 12.07 per cent in April amid poor growth in bank deposits.

Central bank officials and bankers, however, said that the banks might face fall in net profits due to a sharp increase in non-performing loans in the country’s banking sector.

In January-March of the year, the amount of classified loans in Bangladesh’s banking sector soared by 18.06 per cent or Tk 16,962.14 crore in the first quarter of the calendar year 2019.

The volume of non-performing loans increased to Tk 1,10,873.54 crore at the end of March this year from Tk 93,911.4 crore at the end of December, 2018.

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