Home ›› 18 Apr 2022 ›› Stock
BRAC Bank, one of Bangladesh’s most notable banks for small and medium-sized businesses, witnessed a sharp rise in non-performing loans in the last year, forcing it to set aside more money to cover the risk of default.
Its NPLs stood at Tk 1,252 crore in 2021, the sharpest rise of 56 per cent from Tk 800 crore seen a year earlier and making up 3.90 per cent of the total outstanding loans recorded in the last year, according to the bank’s latest annual report.
The bank’s bad loan was Tk 70 crore, up from Tk 63 crore during the period.
To offset the risk against the NPL, it kept Tk 321 crore in 2021, up 71 per cent from Tk 187 crore in 2020.
Of the total NPLs in 2021, trade services accounted for 26 per cent, followed by RMG 18 per cent, SMEs 10 per cent, manufacturing industry 8 per cent, consumer credit 10.83 per cent, textile 6 per cent, shipbuilders 0.57 per cent, agriculture 0.25 per cent, real estate 0.01 per cent and other sectors 16 per cent.
Its NPLs rose 92 per cent in the agriculture sector, which is the highest of any other sector.
BRAC Bank Company Secretary Mohammad Mahbubur Rahman said, “Our bank’s NPLs are much lower than the industry average. Yet, the effort is on to bring it down.”
BRAC Bank had fully followed Bangladesh Bank’s guidelines and granted forbearance such as moratorium to loan repayment and loans backed by government refinance schemes, said the bank in the annual report.
The bank also heightened its risk assessment standards by proactively reviewing risk thresholds keeping the pandemic impacts in mind, and these are the reasons behind the rise in NPLs, it added.
The bank’s written-off loans stood at Tk 150 core last year, up from around Tk 105 crore seen in 2020.
During the period, recovery of bad debt was around Tk 71 crore, up from Tk 63 crore.
In 2021, the bank disbursed Tk 6,822 crore to 19 organisations. Of the amount, some Tk 873 crore was sanctioned to City Group, followed by Tk 856 crore to Meghna Group, Tk 699 crore to Abul Khair Group, Tk 433 crore to BSRM and Tk 393 crore to Square Group.
The bank had earned an interest income of Tk 2,158 crore in 2021, down from Tk 2,470 crore recorded in 2020. This means that the bank income from lending fell during the period.
During the period, its net profit stood around Tk 554 crore, which was Tk 454 crore.
The total number of agent banking accounts is around 14.2 crore, and total deposits stood at Tk 765 crore until 2021.
In the first round of the stimulus package (April 2020-June 2021), BRAC Bank disbursed Tk 1,500 crore to the Covid-hit entrepreneurs and in the second round (July 2021-June 2022), it has already disbursed Tk 893 crore against the target of Tk 1,400 crore.
