Dhaka, Bangladesh (BBN)- The volume of classified loans in the Bangladesh's banking system jumped by over 18 per cent or BDT 112.37 billion in the first quarter (Q1) of the current calendar year.
The amount of non-performing loans (NPLs) bloated into BDT 734.09 billion during the January-March period from BDT 621.72 billion in the preceding quarter, according to the central bank’s latest statistics,
The share of NPLs also rose to 10.53 per cent of total outstanding loans during the period under review from 9.23 per cent three months back.
The classified loans cover substandard, doubtful and bad/loss of total outstanding credits which stood at BDT 6970 billion as on March 31 last. It was BDT 5986 billion a year ago.
“It’s a seasonal effect,” a senior official of the Bangladesh Bank (BB) told BBN in Dhaka, adding that the amount NPLs normally rises during the Q1 and Q3 of each calendar year.
The central banker expects that the amount of NPLs may fall in the second quarter (Q2) of the current calendar year.
During the January-March 2017 period, the total amount of NPLs with six state-owned commercial banks rose to BDT 357.17 billion from BDT 310.26 billion in the previous quarter.
On the other hand, the total amount of classified loans with 39 private commercial banks (PCBs) amounted to BDT 297.27 billion in the Q1 of 2017 from BDT 230.57 billion three months before.
The NPLs of nine foreign commercial banks (FCBs) came down to 22.82 billion during the period under review from BDT 24.05 billion of the previous quarter.
The classified loans with two development-finance institutions (DFIs) remained unchanged at BDT 56.84 billion in the Q1, the BB data showed.
Senior bankers, however, said the amount of classified loans increased significantly during the period under review because of less rescheduling and relaxed trend in recovery.
They also said most of the bankers normally remain less serious in the first three months of a calendar year for recovering their NPLs.
BBN/SSR/AD