Banks see operating profit
A number of state-owned and private banks have registered operating profit in 2022 thanks to Bangladesh Bank's relaxed policy that allowed the lenders to show unrealised interests as profits and a credit growth in the private sector.
An analysis of available operating profit figures of 11 banks shows that 10 banks registered a 10-25% year-on-year increase in operating profits while one posted a decrease.
Bankers say, after excluding the operating expense and provisioning of default loans, the net profit will be very low.
Recently the Bangladesh Bank has allowed banks to show the unrealised interests against the relaxed repayments of term loans in their profits.
"The facility has been given to enhance the banks' financial strength and shock absorbing capacity," said the Bangladesh Bank circular.
Islami Bank Bangladesh recorded the highest operating profit, at Tk2,640 crore compared to last year's Tk2,430 crore.
State-owned Sonali Bank made an operating profit of Tk2,520 crore in 2022 while their profit in 2021 was Tk2,100 crore – almost 20% increase compared to last year.
"Due to the Ukraine-Russia war since February this year, the price of goods in the international market was high. Loan burden on importers have increased," Mr Emranul Huq, managing director & CEO of Dhaka bank told The Business Standard.
"In addition, the price of dollars has increased by about 20%. In this volatile situation, the profits of several banks have increased from the dollar market," he added.
He also said that if the defaulted loans of the banks are reduced, then there is no need to make provisioning from the operating income. If default loans increase, the operating profit will decrease.
According to data from the Bangladesh Bank, total disbursed loans in the country stood at Tk14.36 lakh crore till September this year. Of this, defaulted loans are Tk1.34 lakh crore which at the end of June was Tk1.25 lakh crore.