Dhaka, Bangladesh (BBN)– Operating profits of the private commercial banks (PCBs) showed an upturn in the first half (H1) of 2019 although the volume of classified loans is on the rise, bankers said.
Of 40 PCBs, 19 marked an upward trend in operating profits, while no bank witnessed downturn, according to provisional data for the six-month period from this January to June.
The data of the rest were not immediately available.
Un-audited operating profits, however, do not indicate the actual financial position of the banks, as they have to leave aside funds for provisioning bad debts and taxes payable to the government.
The rising trend in the volume of credit, particularly in the private sector, has helped the banks pick up their operating profits in H1 of 2019 compared to the same period last year, according to the senior bankers.
Meanwhile, the total outstanding loans with the private sector rose to BDT 9879.29 billion in April 2019 from BDT 8,815.11 billion a year ago, according to the central bank’s latest statistics.
Besides, some banks, having offshore banking unit (OBU) operations, earned a notable amount through providing foreign currency loans to their customers.
Currently, 35 commercial banks, out of 58, are running their OBUs across the country, they added.
Talking to the BBN, a senior executive of a leading PCB said interest rate on London Inter-Bank Offered Rate (LIBOR), particularly for 182-day, dropped to 2.32 per cent on June 28 from around 3.0 per cent a month ago.
The private bankers also said some banks have already been able to earn a significant amount from their treasury operations.
However, some banks could not perform in H1 of 2019 as per expectation mainly due to an increase in their volume of non-performing loans (NPLs).
The volume of classified loans increased by more than 18 per cent to BDT 1,108.73 billion in the first quarter of 2019 from BDT 939.11 billion in the previous quarter, according to the central bank.
The private bankers opined that the operating profits may rise in the second half (H2) of this year, if the banks are able to reduce the amount of their NPLs by gearing up recovery drives across the country.
Among the PCBs, the operating profit of Islami Bank Bangladesh Ltd rose to BDT 12.23 billion in the January-June period of 2019 from BDT 10.21 billion in the same period of 2018.
The operating profit of Pubali Bank Ltd rose to BDT 5.40 billion in the first six months of this year from BDT 4.47 billion in the same period of 2018.
Southeast Bank Ltd earned BDT 5.05 billion as operating profit during the period under review against BDT 4.56 billion in the first-half of last year.
The operating profit of Dutch-Bangla Bank Ltd rose to BDT 5.10 billion in H1 of 2019 from BDT 4.18 billion in the same period of 2018. The profit of NCC Bank Ltd reached BDT 3.60 billion from BDT 2.97 billion.
Bank Asia Ltd and Mercantile Bank Ltd made BDT 4.65 billion and BDT 3.31 billion as operating profit against BDT 4.17 billion and BDT 3.25 billion respectively.
Al-Arafah Islami Bank Ltd earned BDT 4.05 billion as operating profit against BDT 2.60 billion, while operating profit of First Security Islami Bank Ltd rose to BDT 2.81 billion from BDT 1.28 billion.
The operating profit of EXIM Bank Ltd rose to BDT 3.30 billion in the period under review from BDT 3.25 billion in the same period of last year.
The operating profit of Shahjalal Islami Bank Ltd rose to BDT 3.20 billion in H1 of 2019 against BDT 2.10 billion in the same period of 2018, while the profit of Social Islami Bank Ltd reached BDT 2.94 billion from BDT 2.75 billion.
The operating profit of Mutual Trust Bank Ltd rose to BDT 2.73 billion during the period under review from BDT 2.29 billion in the same period of last year.
Premier Bank Ltd made operating profit worth BDT 2.54 billion in H1 of 2019 against BDT 2.12 billion in the same period of 2018.
Meghna Bank Ltd made operating profit worth BDT 450 million in H1 of 2019 against BDT 350 million in the corresponding period, while South Bangla Agriculture and Commerce Bank Ltd earned BDT 900 million against BDT 880 million.
Modhumoti Bank Ltd earned BDT 960 million as operating profit in Jan-June period of this year compared to BDT 880 million in the same period of 2018, while the profit of NRB Bank rose to BDT 390 million from BDT 270 million.
NRBC Bank Ltd made operating profit amounting to BDT 900 million in H1 of 2019 against BDT 770 million in the same period of 2018.