Eight private banks’ operating profits rise

The operating profits of most of the private commercial banks (PCBs) increased in 2022 compared to the previous year, thanks to higher commissions from the export-import business and the growing private sector credit.

Of the total 42 PCBs in the country, the Business Post obtained provisional data of nine PCBs, and eight of them recorded increased operating profits.

However, the data of the other banks were not available. Half a dozen private bank officials said that they were instructed by their high-ups not to share the operating profit data saying that the profit figures might fluctuate in the final count.

Bankers said that the higher commissions from the export-import business were the main reasons behind the increase in operating profits.

On the other hand, the rising private sector credit growths following the two-year coronavirus pandemic fallout were among the reasons behind the growth.

Islami Bank Bangladesh Limited’s operating profits stood at Tk2,646 crore in 2022, up from Tk2,430 crore in the previous year.

However, the bank is now facing various challenges due to loan irregularities.

The operating profits of Southeast Bank stood at Tk1,135 crore at the end of last year, up from TK1,016 crore a year ago.

A high official of the bank told this correspondent that the bank’s loan recovery from the borrowers during last year was better than the previous year. He said a major portion of the bank’s income came from the non-funded segment. Private sector credit growth played a big role in the rising trend of operating profits.

The private credit growth was the highest – 14.07 per cent – in August this year. However, October’s figure is still higher than the target for December.

In its monetary policy statement for FY 2022-23, the central bank had set the private sector credit growth target at 13.60 per cent till December, and 14.10 per cent till next June of this fiscal year.

However, a recent central bank report said that the significant depreciation of the local currency against the USD in recent months has positively impacted private sector credit growth.

The operating profit of Jamuna Bank stood at Tk 830 crore in the last year, up from Tk 750 crore in the previous year.

Industry insiders said that 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. On the other hand, growing imports also helped banks boost their operating profits.

The latest data from the Bangladesh Bank shows that LC settlements from July to October this FY stood at $27.94 billion, up from $20.20 billion in the same period of last FY. LC settlements grew by 65.96 per cent year-on-year in October.

The operating profits of NRB Commercial Bank, Mercantile Bank, Union Bank, Al Arafah Bank, Southeast Bank, SIBL, Rupali Bank rose by 5 per cent to 20 per cent during last year.

The unaudited 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.