Most pvt banks’ operating profits rise in H1

Most private commercial banks’ (PCBs) operating profits increased in the first half of this year, thanks to higher commissions from the export-import trade and rising private sector credit growth.

Out of the 42 PCBs, The Business Post obtained provisional data of eight that recorded increased operating profits. The data of the other banks was not available.

Bank officials said profit figures might fluctuate slightly in the final count.

Bankers said the rising private sector credit growth after the two-year coronavirus pandemic fallout and higher commissions from the export-import business were the main reasons behind the increase in operating profits.

Dhaka Bank’s operating profits stood at Tk 375crore in the first half of 2022, which was Tk 309 crore in the same period last year.

Its Managing Director and Chief Executive Officer (CEO) Emranul Huq told The Business Post his bank’s loan recovery from borrowers during the six months was better than the pandemic period. He said a major portion of the bank’s income came from the non-funded segment.

Most of the banks earned by selling foreign currency to other banks as the forex market is now very unstable due to US dollar shortages, he noted.

“But the profitability of banks will be impacted negatively in the coming days due to the lending rate cap, which should be revised now as the deposit interest rates are growing to cope with soaring inflation.”

In May, private sector credit growth accelerated to 12.94 per cent, the highest since January 2019 when it was 13.2 per cent, as per the central bank data.

On the other hand, growing imports in recent times helped banks boost their operating profits, according to industry insiders.

During 10 months of FY22, imports rose by 42 per cent to $68 billion while export earnings grew by 34 per cent to $41 billion, the central bank data shows.

Pubali Bank’s operating profits stood at Tk 650 crore in the first half of 2022, up from Tk 503 crore in the same period last year.

Its Managing Director and CEO Saiful Alam Khan Chowdhury told The Business Post his bank’s deposits had increased during these six months.

He said their profits had increased due to growing credit demand after the Covid-19 pandemic subsided.

Besides, the growing export-import business had helped boost operating profits, he added.

Southeast Bank’s operating profits stood at Tk 534 crore in the said period, up from Tk 472 crore in the same period of the previous year.

“The economy and businesses have fully recovered from the two-year Covid-19 shocks,” said the bank’s Managing Director M Kamal Hossain.

He said this helped raise credit demand, which then played a role in increasing operating profits.

The operating profits of NRB Commercial Bank, SBAC Bank, Mercantile Bank, and Premier Bank rose by 20-25 per cent during the said period.

The un-audited operating profits generally do not reflect the actual financial position of the banks as the lenders will have to keep provisions against bad loans and pay taxes.