Bangladesh Bank Headquarters

Dhaka, Bangladesh (BBN)– The amount of classified loans in the country’s banking system jumped by 19.23 per cent or BDT 142.86 billion in the first quarter (Q1) of 2018 despite the central bank’s close monitoring.

The volume of non-performing loans (NPLs) rose to BDT 885.89 billion during the January-March period of this calendar year from BDT 743.03 billion in the preceding quarter, according to official figures.

The share of NPLs also rose to 10.78 per cent of the total outstanding loans in the Q1 of 2018 from 9.31 per cent in the previous quarter.

On the other hand, the amount of classified loans swelled up by nearly 21 per cent or BDT 151.80 billion in the Q1 of 2018 compared to the same period of the previous year.

The amount of NPLs was BDT 734.09 billion as on March 31, 2017.

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

He also expects that the amount of NPLs will decline in the second quarter (Q2) of the current calendar year.

The classified loans cover substandard, doubtful and bad/loss of total outstanding credits, which stood at BDT 8,221.37 billion as on March 31 last. It was BDT 7,981.96 billion three months before.

During the January-March period of 2018, the total amount of NPLs with the six state-owned commercial banks (SoCBs) rose to BDT 436.85 billion from BDT 373.26 billion in the previous quarter.

On the other hand, the total amount of classified loans with the 40 private commercial banks (PCBs) reached BDT 372.89 billion in the Q1 of 2018 from BDT 293.96 billion three months ago.

The NPLs of the nine foreign commercial banks (FCBs) rose to BDT 21.88 billion during the Q1 of 2018 from BDT 21.54 billion of the previous quarter.

The classified loans with the two development-finance institutions (DFIs) remained unchanged at BDT 54.26 billion in the Q1, the BB data showed.

The amount of NPLs increased significantly during the period under review due to low rescheduling and a relaxed trend of recovery, according to senior officials.

They also said most of the banks usually remain less serious in recovering their NPLs during the first three months of the calendar year.