Home ›› 04 May 2023 ›› Front
Most banks posted higher net profits in 2022 compared to the previous year despite increased non-performing loans (NPLs), a series of loan scams, and the economic crisis triggered by the Russia-Ukraine war.
There are 35 banks listed with the Dhaka Stock Exchange (DSE). Of them, 13 registered negative growth in their net profit in 2022 compared to the previous year. The 22 other banks (63 per cent) registered healthy profit growth.
Speaking to The Business Post, sector insiders said 63 per cent of banks posted higher profits mainly due to good earnings from import business and dollar trade amid a volatile currency market.
Significant gains from the treasury department, which deals with foreign exchange transactions in exports and imports, were the main driver of the profit growth, they said.
Though banks’ core business suffered in the sluggish economy, income from foreign exchange business rose due to the surge in the US dollar price against the taka, they added.
“Though profits rose in 2022 compared to 2021, it did not increase significantly as 2021 was the year of the pandemic. A bad year followed by slightly higher profit in another bad year – that was the situation,” Association of Bankers Bangladesh Chairman and Managing Director of BRAC Bank Selim RF Hussain told The Business Post.
M Reazul Karim, managing director of Premier Bank, told The Business Post banks’ profits slightly jumped last year, thanks to higher income from export and import business.
Also, the interest rate on loan disbursements was higher than that on deposits, he said.
The banking sector has long been facing a stressful situation, exacerbated by a series of loan scams, rising default loans, and the weak performance of bank stocks on the bourses.
Meanwhile, amid high pressure from the International Monetary Fund (IMF) to reduce bad loans to a minimal level, NPLs in the country’s banking sector hit Tk 1,20,656 crore at the end of December 2022.
Bad loans rose by Tk 17,383 crore in the past year as NPLs amounted to Tk 1,03,273.78 crore at the end of December 2021, as per the Bangladesh Bank data.
According to industry insiders and experts, this happened mainly due to the partial withdrawal of the relaxed loan repayment facilities.
Islami Bank’s profit jumped by 28 per cent year-on-year to Tk 616.62 crore in 2022. The country’s largest Shariah-based bank’s profit was Tk 481 crore in the previous year, as per its audited financial statement.
BRAC Bank reported a 32 per cent growth in its net profit last year. The private bank and its subsidiaries recorded a profit of Tk 612 crore in 2022, up from Tk 465 crore in 2021.
Its Managing Director said the bank’s growth in deposits and loans iswell above the industry average, which is a testament to customers’ trust and long-term sustainability.
Dutch-Bangla Bank’s net profit rose by 1.87 per cent year-on-year to Tk 566 crore in 2022. Eastern Bank’s profit increased to Tk 512 crore last year from Tk 480 crore in 2021.
Uttara Bank posted 21.92 per cent year-on-year growth in its net profit in 2022. The bank, along with its subsidiaries, generated Tk 270.6 crore in net profit after taxes in 2022, which was Tk 222 crore in the previous year.
Prominent economist and BRAC Bank Chairman Ahsan H Mansur said high NPLs and a liquidity crunch impacted banks last year.
The shortage of deposits in the banking sector mainly created the crisis, he said. “Besides, some banks managed to make good profits due to the appreciation of the USD.”
Union Bank made a Tk 162.69 crore profit in 2022, slightly up from a year earlier. The profit was Tk 161.66 crore in 2021.
Pubali Bank posted a Tk 564.53 crore profit in 2022, up nearly 30 per cent from a year earlier. The bank made a profit of Tk 434.97 crore in 2021.
Prime Bank posted a 23 per cent year-on-year increase in profit to Tk 399.7 crore last year, which was Tk 324.97 crore in 2021.
Premier Bank’s profit jumped by 19 per cent to Tk 392 crore last year compared to 2021. EXIM Bank’s profit soared by more than 72 per cent to Tk 372.02 crore in 2022 compared to the previous year.
In 2022, Shahjalal Islami Bank’s net profit increased by 38 per cent to Tk 357 crore compared to the previous year. IFIC Bank’s profit rose to Tk 344 crore in 2022 compared to the previous year.
United Commercial Bank reported a 32 per cent year-on-year increase in profit to Tk 330.47 crore in 2022. Bank Asia registered a 13 per cent year-on-year rise in profit to Tk 305 crore in 2022.
Social Islami Bank made Tk 206.83 crore profit in 2022, up more than 18 per cent compared to a year earlier.
Mutual Trust Bank made a Tk 236.84 crore profit in 2022, down more than 20 per cent compared to a year earlier. The profit was Tk 297.62 crore in 2021. SBAC Bank clocked a 9 per cent year-on-year increase in profit to Tk 59.34 crore in 2022.
Dhaka Bank’s profit dropped by 22 per cent in 2022 compared to the previous year. According to the bank’s price sensitive statement, its consolidated net profit was Tk 167 crore last year, which was Tk 213 crore the year before.
Trust Bank’s profit rose by 6.5 per cent year-on-year to Tk 291.89 crore in 2022. The profit was Tk 273.99 crore in 2021. Mercantile Bank’s net profit dropped by 34 per cent to Tk 235 crore in 2022 compared to the previous year.
City Bank posted a 13 per cent decrease in profits in 2022 compared to the previous year. First Security Islami Bank’s profit declined by 12.18 per cent year-on-year to Tk 293.93 crore in 2022. Rupali Bank’s profit fell by 43.51 per cent in 2022 year-on-year.
National Bank incurred a huge loss of Tk 3,260 crore in 2022 as its borrowers could not repay instalments on time, causing the loans to become classified. Due to the high loss, the bank failed to recommend any dividend to its shareholders for the year 2022. Earlier, in 2021, it did not pay any dividends to the shareholders.
NRB Commercial Bank posted a 14.35 per cent year-on-year decline in profit to Tk 193.48 crore in 2022. Its earnings decreased because of additional provisions and an extra tax burden, said the bank in a filing on the Dhaka Stock Exchange.
