Twelve banks suffered Tk 9,469.03 crore in provision shortfall in the July-September quarter even after the issuance of a host of policy relaxations by the Bangladesh Bank following the outbreak of coronavirus in the country.
At the end of the April-June quarter, 11 banks suffered provision shortfall of Tk 10,177.48 crore while the figure was Tk 8,632 crore at the end of March quarter.
Though the number of banks suffering with provision shortfall increased to 12, the volume of provision shortfall dropped by Tk 710.5 crore in July-September quarter, according the latest BB data.
The banks which suffered provision shortfall are:
BASIC Bank, National Bank, AB Bank, Agrani Bank, Rupali Bank, Bangladesh Commerce Bank, Sonali Bank, Dhaka Bank, Mutual Trust Bank, Social Islami Bank, Trust Bank and Bank Asia.
The country’s banking sector, which has been going through various pressures due to lack of good governance and high amount of defaulted loans, witnessed an unprecedented fall in loan recovery with the majority of the loans becoming irregular after the outbreak of coronavirus.
Economists and researchers said that the financial strength of the banks had fallen into a deeper crisis after the outbreak of coronavirus.
The real financial status of the banks would become visible once the regulatory relaxations are withdrawn, they said.
Agrani Bank’s provision shortfall increased to Tk 1,087.71 crore at the end of September from Tk 885.71 crore at the end of June. Provision shortfall of Sonali Bank declined to Tk 369.58 crore from Tk 892.65 crore.
Bangladesh Commerce Bank’s provision shortfall decreased to Tk 551.74 crore from Tk 565.61 crore.
MTB’s shortfall dropped to Tk 205.11 crore at the end of September against Tk 244.02 crore three months ago.
Social Islami Bank’s provision shortfall dropped to Tk 185 crore from Tk 198 crore. Trust Bank managed to bring down its provision shortfall to Tk 25.67 crore from Tk 41.76 crore.
Dhaka Bank’s provision shortfall increased to Tk 226.69 crore at the end of September this year from Tk 203.36 crore in the previous quarter.
BASIC Bank, suffering with the highest provision shortfall in the banking sector, cut its provision shortfall by Tk 80.94 crore in July-September to Tk 3,233.23 crore from Tk 3,314.17 in the previous quarter.
The provision shortfall of Rupali Bank dropped to Tk 859.89 crore from Tk 920.5 crore, that of AB Bank fell to Tk 1,104.55 crore from Tk 1,216.83 crore and that of National Bank decreased to Tk 1,620.81 crore from Tk 1,696.87 crore.
Bank Asia, which had Tk 4.94 crore in provision surplus in the previous quarter, suffered Tk 0.05 crore in provision shortfall in the July-September quarter.
The amount of non-performing loans in the country’s banking sector stood at Tk 94,440.47 crore at the end of September, according to BB estimates.
A 2019 International Monetary Fund estimation said that the problem assets in Bangladesh’s banking sector as of June 2019 stood at Tk 2,40,167.17 crore.
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