Dhaka, Bangladesh (BBN) – The amount of classified loans in Bangladesh’s banking sector jumped by 21.02 per cent or BDT 108.01 billion in 2016 despite close monitoring by the central bank.
The volume of non-performing loans (NPLs) rose to BDT 621.72 billion as on December 31 from BDT 513.71 billion on the same day of 2016, according to the latest statistics of Bangladesh Bank (BB), the country’s central bank.
However, stronger recovery drives by the commercial banks and the rescheduling of loans pushed down the volume of NPLs in the final quarter of the last calendar year, according to officials.
During the October-December period of 2016, the NPLs dropped by 5.41 per cent or BDT 35.59 billion to BDT 621.72 billion from BDT 657.31 billion in the third quarter (Q3). It was BDT 633.65 billion in the Q2.
The share of NPLs also came down to 9. 23 per cent during the period under review from 10.34 per cent three months back. It was 8.79 per cent as on December 31, 2015.
Talking to BBN, a BB senior official expressed concern that the amount of NPLs might rise in the first quarter of this year due to slow pace of recovery by the commercial banks.
The volume of classified loans normally falls during the final quarter of each calendar year, the central banker explained.
The classified loans covered substandard, doubtful and bad/loss of total outstanding credits, which stood at BDT 6,739.20 billion as on December 31 last. It was BDT 5,846.15 billion a year ago, the BB data showed.