ISLAM SIDDIQUE |
Aug 20, 2021 8:07:01 AM
Aug 20, 2021 9:51:11 AM
Classified loans in the banking sector have exploded in the first half (S1) of the current calendar year despite the central bank’s political advantages to stem the rot.
The volume of non-performing loans (NPL) increased by nearly 12% or Tk 104.71 billion to Tk 992.05 billion as of June 30 against Tk 887.34 billion six months earlier, according to the latest Bank statistics of Bangladesh (BB).
BB officials, however, said the amount of NPLs increased slightly in the second quarter (T2) compared to the first quarter (Q1) of this year due to the “smooth repayment policy” and the reduction. rescheduling during the period under review.
The volume of NPLs increased by more than 4.0% or Tk 41.20 billion to Tk 992.05 billion as of June 30 from Tk 950.85 billion three months earlier, according to BB data.
Some of the large restructured loans have already become NPL, which has also increased the overall volume of classified loans in the banking system, they explained.
In 2015, the central bank approved the proposals of 11 groups of companies for the restructuring of their large loans worth around Tk 153.26 billion for the reorganization of their accounts.
Speaking to FE, central bank spokesperson Md Serajul Islam said the amount of non-performing loans increased slightly in the second quarter of 2021, mainly due to the higher volume of total outstanding loans. in the banking sector.
The amount of outstanding loans increased by more than 3.0% to reach Tk 12,131.64 billion as of June 30 from Tk 11,776.59 billion three months ago, according to central bank statistics.
“The implementation of the stimulus plans resulted in an increase in the amount of outstanding loans in the country’s banking system during the period under review,” explained Mr. Islam, also executive director of BB.
The share of non-performing loans also increased to 8.18% of total outstanding loans in the first half of 2021, compared to 7.66% as at December 31, 2020 – according to the consolidated statement of classified loans covering both units national and offshore banking. It was 8.07% as of March 31, 2021.
The classified loans cover the substandard, doubtful and uncollectible portions of the total outstanding loans, which reached Tk 12,131.64 billion as of June 30 on a consolidated basis. It was Tk 11,587.75 billion six months earlier.
The central bank has started preparing the statement since the last quarter of the last calendar year. Previously, the BB had prepared two loan statements classified separately for domestic banking units and offshore banking units.
Senior bankers, however, said most borrowers benefited from a repayment facility in the period following BB’s easing of loan repayment policy.
As part of the easing of the BB policy, borrowers were entitled to an additional three months to repay their loan maturities due on the basis of the banker-client relationship due to the second wave of the Covid-19 pandemic.
Borrowers were allowed to clear their payments on continuing, demand and term loans by June 2021, instead of March 2021, based on the bank-client relationship, according to a notification issued by the central bank on March 24, 2021.
In addition, the BB has offered a facility for deferral of loan classification from January 2020 to December 2020, given the negative impact of the Covid-19 pandemic on life and business.
“This is expected due to the ongoing Covid-19 pandemic,” said former Bangladesh Bankers Association (ABB) president Syed Mahbubur Rahman, while explaining the upward trend in classified loans in Bangladesh.
Mr Rahman, also Managing Director (MD) and Chairman and CEO (CEO) of Mutual Trust Bank Limited, said: “It is likely to increase further in the coming quarters.
During the first half of 2021, the total amount of non-performing loans with six state-owned commercial banks (SoCBs) rose to Tk 438.36 billion compared to Tk 422.73 billion as of December 31. It was Tk 434.50 billion in the first quarter of 2021.
On the other hand, the total amount of loans classified with 42 private commercial banks (BPCs) reached Tk 491.91 billion as of June 30, compared to Tk 403.61 billion in the last quarter of last year. It was Tk 450.90 billion as of March 31. The bad debts of nine foreign commercial banks (FCBs) reached Tk 24.92 billion during the period under review, compared to Tk 20.38 billion in the fourth quarter of 2020. They were Tk 24.58 billion in the period under review. first quarter of 2021.
Loans classified with two development finance institutions (DFIs) also fell to 36.85 billion tk as of June 30, compared to 40.61 billion tk six months earlier. It was Tk 40.86 in the first quarter of this calendar year.