Staff correspondent:

State-owned Sonali Bank Limited started recovering from the impact of the Hallmark Group loan scandal. Hallmark Group took away about Tk 35 billion from the bank in various ways between 2010 and 2012, stirring a nationwide outcry. The borrower finally landed in jail. After that, a restructuring began at the bank following the then-biggest loan scandal, thus, depositors’s confidence started to grow in the largest bank in the country once again.

According to data from the bank, deposits now rose to Tk 1.65 trillion from Tk 600 billion in 2012 and the amount of loans now increased to about Tk 1 trillion from Tk 340 billion in 2012. Currently, 33 per cent of the bank’s loans are in the public sector.

Following the Hallmark incident, Sonali Bank slowed its lending and changed its strategy. They continued investing in various government products instead of lending aggressively. The bank also lent to other banks and took interest income instead of providing big loans to large companies in the private sector, thus, the bank’s financial foundation became stronger. The number of clients also now increased to 20 million from 10 million a decade ago.

A dozen state-owned and private banks were hit by large-scale irregularities and fraudulences during the second and the third terms of the ousted Awami League government, but Sonali Bank was saved from the influential people. Several individuals close to the Awami League government tried to take loans but the bank managed to hold them back. Currently, the bank has the highest amount of deposits than any other banks. It also topped in the operating profits, also has the highest number of branches across the country. Yet, the bank still bears the liabilities of the several old defaulted clients and the Hallmark scandal.

Regarding the future plans, managing director Md Shawkat Ali Khan Sonali Bank made no big financing after the Hallmark Group scandal and lent more to small and medium businesses and export-oriented products. This initiative would continue in future, as well as all steps being taken to recover old defaulted loans.

Referring to Hallmark Group’s loans, he said the values of the collaterals are worth more than the loans to Hallmark Group and they have plans to sell collaterals in phases once they receive the final court order. Besides, the bank recovered Tk 60 million from the business group last year, he added.

GRADUAL PROGRESS

Deposit and lending stood at Tk 478.13 billion and Tk 286.10 billion respectively in 2010 while the client account were about 9.2 million. Defaulted loans were at Tk 68.32 billion, accounting for about 24 per cent of total loan outstanding. Sonali Bank incurred a net loss of Tk 9.8 million in 2010. Total loans rose to Tk 346 billion but defaulted loans decreased significantly, thus, the bank made Tk 9.96 billion in profit – the highest in the history of the bank.

Then in 2012, the loan fraudulence of Tk 35 billion by Hallmark Group was unearthed, thus, the bank incurred Tk 24.96 billion in loss. Actual interest income was negative in the bank from 2012 to 2021. So, the bank took strategies and increased investments in treasury, lending to the government and other sectors. Sonali Bank also took over some loans from other banks. Interests from lending increased to Tk 2.09 billion in 2022, Tk 4.76 in 2023 and lastly 14.52 billion in 2024.

Sonali Bank posted a net profit of Tk 6.52 billion in 2022 and Tk 6.52 billion in 2023, as well as made an operating profit of Tk 6.34 billion in 2024, which is the highest in the banking sector.

LOAN WRITE-OFF AND TOP DEFAULTERS

According to the bank’s documents, the bank owes Tk 50.80 billion in loans to the top ten defaulters and recovered only Tk 1.21 billion of it in 2024. Besides, loans of Tk 26.95 billion of the top 20 defaulters were written off and only Tk 20 million was recovered from them in the outgoing year.

The top 20 loan defaulters include Hallmark Group’s T & Brothers, Hallmark Group, Ruposhi Group, Modern Steel, Taipei Bangla Fabrics, Fair Trade Fabrics, Rahman Group, while other top defaulters are Alltex Industries, Munnu Fabrics, Leena Group, Ratanpur Steel, Magura Paper Mills, Apex Weaving, Biswas Garments, Reza Jute, Meghna Condensed Milk, Sonali Jute, Western Marine Shipyard, Supreme Jute and Knitex and Sharif Jute Trading.

Hallmark Group had Tk 12.27 billion in loans written off while the others are New Rakhi Textile, Jasmir Vegetable, Ferrar Expo, Alfa Tobacco, One Spinning Mills, Imperial Dyeing, Rokeya Textile, Sahil Fashion, Imam Traders, Sumir Sweater, Unity Knitwear, Siddique Traders, KPF Textile, Moon Knitwear, AR Khan Sizing, Sahil Knitwear, Mask Sweater and Jalalabad Pharmaceuticals.

According to the latest data, Sonali Bank saw a slight rise in loan defaults after the fall of the government in August 2024. The amount of loan default increased to Tk 166.24 billion – about 17 per cent of total loan outstanding, at the end of 2024 from Tk 133.41 billion – 13.23 per cent of total outstanding – in 2023.