Staff Correspondent:

Twenty-two private banks have disclosed their profits and losses in 2024 so far, with several banks seeing record net profits and several other accounting big losses. Profits rose in 13 of those banks and dropped in seven banks, while losses increased in two banks.

However, many of the banks where plundering was rampant during the past Awami League government seem to incur losses now.

Data from various banks shows profits soared in BRAC Bank and City Bank, and plummeted in Dutch-Bangla Bank and Shahjalal Islami Bank, while loss increased in National Bank and ICB Islamic Bank.

Bank’s net profit is calculated after deducting security provisions and corporate tax from operating profit. The corporate tax rate is 37.50 per cent for banks listed on the stock markets and 40 per cent for non-listed banks.

This time, Bangladesh Bank geared up monitoring on finalising the annual financial reports. Central bank officials inspected various loan projects of almost all banks and then instructed banks on how much non-performing loans (NPLs) they can show. Thus, most banks’ NPLs increased. Many banks took a hit on profits because of maintaining security provisions as per instructions.

People concerned said banks had the opportunity to increase lending rates last year and earned well. Besides, some banks earned well from investing in taka and dollars. Banks with a good reputation received huge deposits that became a major tool for increasing profits. On the other hand, banks that were engulfed in various controversies are operating on borrowed money and they faced pressure to pay interests. Overall, a handful of banks performed well last year while most banks ended the year under pressure and crisis.

BANKS WITH PROFITS

A review of the banks’ net profits shows that among private banks, BRAC Bank’s net profit rose to Tk 14.32 billion in 2024 from Tk 8.28 billion in 2023. Its managing director (MD) Selim RF Hossain recently “BRAC Bank leads in good governance and discipline among the banks in the country. That’s why we received many deposits last year. When many banks faced a crisis of confidence because of various irregularities, depositors chose BRAC Bank for reliability. We ensured maximum security to depositors’ money and invested in profitable sectors. As a result, we achieved record profits.”

City Bank’s profit increases to Tk 10.14 billion in 2024 from Tk 6.38 billion in 2023. Thus, these two banks entered the club of Tk 10 billion in net profit for the first time in the country.

City Bank MD Masrur Arefin said, “People had faith on us and deposited money. Last year, our CIR (cost to income ratio) dropped from 60 per cent to 42 per cent, soring profits.”

Besides, profits of Pubali, Eastern, and Prime Bank increased significantly. Pubali Bank’s profit increased from Tk 6.98 bilion to Tk 7.80 billion, Eastern Bank’s from Tk 6.11 billion to Tk 7.50 billion, and Prime Bank’s from Tk 4.84 billion to Tk 7.45 billion. Bengal Commercial Bank’s profit rose to Tk 630 million from Tk 110 million. Citizen Bank incurred a loss of Tk 15 million in 2023, but made a profit of Tk 40 million in 2024.

PROFITS PLUMMET

Net profits of several banks fell sharply in several banks. Dutch-Bangla Bank’s profit fell from Tk 8.02 billion in 2023 to Tk 4.73 billion in 2024, Trust Bank’s from Tk 4.27 billion to Tk 3.73 billion and Shahjalal Islami Bank’s from Tk 3.58 billion to Tk 1.69 billion. Meghna Bank’s profit dropped from Tk 680 million to Tk 460 million and Community Bank’s from Tk 790 million to Tk 700 million. Although these four banks didn’t face major issues, their provision requirements increased compared to before, which hit profits. Four banks – Trust Bank, Shahjalal Islami Bank, Meghna Bank and Community Bank – faced no major problems, but their profits declined because of a rise in security provisions.

Dutch-Bangla Bank margining director Abul Kashem Md Shirin security provisions were maintained as per demand and additionally even though operating profit was high this time. This measure was taken to strengthen the bank’s foundation considering future risks.

Shahjalal Islami Bank MD Mosleh Uddin Ahmed  they maintained an additional Tk 4.30 billion in provisions compared to demand. More provision might be necessary next year because trade and commerce are facing instability and slump. That’s why their profits fell.

Besides, National Bank and ICB Islamic Bank saw a rise in losses. National Bank’s loss increased from Tk 14.97 billion to Tk 17.06 billion, and ICB Islamic Bank’s loss from Tk 560 million to Tk 940 million.

Meanwhile, more than half of the private sector banks’ annual financial reports are stuck. So, they can neither finalise financial reports nor declare dividends.

Bank officials said that banks are preparing financial reports this time based on reality, thus, there is nothing to hide. Whether the situation gets worse or better in the coming days will be reflected in the report.