Dhaka, Bangladesh (BBN) – The amount of classified loans in the country’s banking sector jumped by more than 29 per cent or BDT 181.35 billion in the first nine months of the current calendar year despite close monitory by the central bank.

The volume of non-performing loans (NPLs) rose to BDT 803.07 billion as on September 30 last from BDT 621.72 billion as on December 2016, according to the central bank latest statistics.

It was BDT 657.31 billion a year ago.

On the other hand, the amount of classified loans increased by 8.30 per cent or BDT 61.59 billion during the third quarters (Q3) of the current calendar year from BDT 741.48 billion in the preceding quarter.

The share of classified loans also rose to 10.67 per cent of the total outstanding loans during the period under review from 9.23 per cent nine months before. It was 10.13 per cent in the Q2 of 2017.

“The amount NPLs normally rises during the Q1 and Q3 of each calendar year,” a senior official of the Bangladesh Bank (BB) told the BBN in Dhaka on Tuesday.

“We expect that the amount of NPLs may fall in the final quarter (Q4) of the current calendar year,” the central banker said while explaining the ongoing trend of NPLs.

The classified loans cover substandard, doubtful and bad/loss of total outstanding credits which stood at BDT 7527.30 billion as on September 30 last from BDT 6739.20 billion as on December 31 last calendar year. It was BDT 7316.26 billion as on June 30, 2017.

During the period, the total amount of NPLs with six state-owned commercial banks (SoCBs) rose to BDT 385.17 billion from BDT 310.26 billion as on December 31, 2016. It was BDT 345.81 billion in the Q2 of this calendar year.

On the other hand, the total amount of classified loans with 39 private commercial banks (PCBs) reached BDT 339.73 billion in the Q3 from BDT 230.57 billion in the final quarter of last year. It was BDT 317.29 billion as on June 30 last.

The NPLs from nine foreign commercial banks (FCBs) came down to BDT 22.98 billion during the period under review from BDT 24.05 billion in the Q4 of 2016. It was BDT 23.21 billion of the Q2 of this calendar year.

The classified loans with two development-finance institutions (DFIs) stood at BDT 55.18 billion in the Q3 of 2017 against BDT 56.84 billion six months before. It was BDT 55.18 billion in the Q2 of this calendar year.

The amount of classified loans increased significantly during the period under review because less rescheduling and relaxed trend of recovery, according to the bankers.

“A portion of special rescheduling loans has already turned into classified ones again mainly due to the lack of required repayment,” a senior executive of a leading PCB said while explaining the upturn in the NPLs.

He also believed that the amount of classified loans would decline in the final quarter of 2017 as the banks have already expedited efforts for recovering their NPLs.

BBN/SS/AD