Sixteen scheduled banks posted a negative credit growth as of the middle of June 2013 on year-on-year basis due to a stagnant situation in the business sector, said officials of Bangladesh Bank.
According to BB data released on Tuesday, the overall credit growth of the scheduled banks also decreased significantly against the deposit growth as of June 13.The deposit growth and the credit growth of the banking sector stood at 17.74 per cent and 9.41 per cent respectively as of June 2013 on year-on-year basis.
The BB officials told New Age on Tuesday that the advance-deposit ratio had declined gradually in the last few months as the businesspeople were now reluctant to expand their investment by taking loan from the banks amid political unrest.
The 16 banks which posted a negative credit growth are: Islamic wing of AB Bank (-6.01 per cent), Islamic wing of The City Bank (-58.61 per cent), ICB Islamic Bank (-28.13 per cent), Islamic wing of Prime Bank (-12.32 per cent), Islamic wing of Dhaka Bank (-22.02 per cent), Islamic wing of Standard Bank (-27.59 per cent), Premier Bank (-1.52 per cent) and its Islamic wing (-16.47 per cent), Islamic wing of Bank Asia (-2.11 per cent), Shahjalal Islami Bank (-18.55 per cent), Islamic wing of Jamuna Bank (-25.90 per cent), Habib Bank (-4.98 per cent), State Bank of India (-27.92 per cent), Citibank NA (-14.48 per cent), HSBC (-7.05 per cent) and Bank Alfalah (-17.95 per cent).
The lower credit growth by the banks meant that majority of the scheduled banks are now sitting on the excess fund, a BB official told New Age.
The businessmen have adopted a ‘wait and see’ approach to expand their business due to the recent spates of political uncertainty ahead of the national elections resulting that the credit growth by the banks declined, he said.
The excess liquidity in the banking sector increased by 57 per cent to a record amount of Tk 71,660 crore on May 30, 2013 from June 30, 2012, the BB data showed. The excess liquidity in the banking sector was Tk 44,562 crore on June 30, 2012.
In the first 11 months of the financial year 2012–13, the private commercial banks held excess cash of Tk 43,791 crore, while it increased by 83 per cent to Tk 7,918 crore for the foreign commercial banks.
The excess liquidity increased by 19 per cent to Tk 19,162 crore at state-owned banks in the period.
The BB official said that the operating profit of the banking sector had declined significantly in the first half of 2013 compared with that of the corresponding period in 2012 as the loan disbursement was a pivotal business for the banks.
Due to lower credit demand from the businesspeople, the ADR in the banking declined massively in the last few months.
The ADR stood at 74.01 per cent as of June 13 which was 74.90 per cent as of May 2, 76.59 per cent as of December 31, 2012, and 80.33 per cent as of June 7, 2012.
The ADR ratio in the state-owned commercial banks dropped to 65.37 per cent as of June 13, 2013 from 68.95 per cent as of Decem
ber 31, 2012 and that of the local private commercial banks to 77.81 per cent from 79.65 per cent.
The ADR ratio in the foreign commercial banks decreased to 67.86
per cent from 72.15 per cent, and that of the Islamic banks to 83.43 per cent from 86.89 per cent, showed the BB data.
Under the circumstances, the credit growth in the private sector decreased to 11.43 per cent in May
2013 compared with that of an 18.40 per cent growth in the corresponding month
of 2012.
-With New Age input
