Loan repayment worsens in Q3
Classified or defaulted loans in the banking sector increased by Tk 13,994.59 crore in the first nine months of this year because of sluggish business sector amid political turmoil and bank scams.
According to the Bangladesh Bank data released on Thursday, the overall defaulted loans increased to Tk 56,720.10 crore as on September 30, 2013 from Tk 42,725.51 crore as on December 31, 2012.
BB officials told New Age that the existing sluggish business situation amid political unrest and the recent bank scams were the key reasons for the increase in the defaulted loans in the first nine months of this year.
The classified loans reached 12.79 per cent of the total outstanding loans of Tk 4,43,457.71 crore in the banking sector as of September 30, 2013. It was 10.03 per cent of the total outstanding loans of Tk 4,26,152.79 crore as on December 31, 2012.
Of the total classified loans, those of four state-owned banks increased by Tk 2,659.33 crore in the first nine months of this year. The classified loans in the SCBs increased to Tk 24,174.23 crore as on September 30, 2013 from Tk 21,514.90 crore as on December 31, 2012.
The classified loans in the private commercial banks rose by Tk 9,273.13 crore in the first nine months of this year. The total classified loans in the PCBs increased to Tk 22,307.98 crore as on September 30, 2013 from Tk 13,034.85 crore as on December 31, 2012.
The classified loans in the four specialised commercial banks rose by Tk 1,453.43 crore in the period. The total classified loans in the banks soared to Tk 8,783.88 crore as on September 30, 2013 from Tk 7,330.45 crore as on December 31, 2012.
The central bank data showed that nine foreign commercial banks registered an increase of Tk 608.70 crore in defaulted loans in the period. The total classified loans of the FCBs increased to Tk 1,454.02 crore as on September 30, 2013 from Tk 845.32 crore as on December 31, 2012.
BB officials told New Age that the classified loans in the banking sector rose by Tk 1,259 crore in the second quarter of this year as the defaulted loans stood at Tk 52,306.32 crore as on June 30, 2013 from Tk 51,019.91 crore as on March 31, 2013.
But the defaulted loans increased by Tk 4,410.78 crore in the third quarter as the classified loans stood at Tk 56,720.10 crore as on September 30, 2013.
BB officials said the unfriendly business environment amid political unrest put an adverse impact on the banks’ defaulted loan situation as a number of businesspeople had failed to repay their loans in due time.
Besides, the defaulted loans in BASIC Bank increased by 101.77 per cent in the third quarter as the bank had defaulted Tk 939.86 crore due to scams. The overall defaulted loans in BASIC Bank increased to Tk 1,863.33 crore as on September 30 from Tk 923.47 crore as on June 30 of this year.
The BB data showed that the defaulted loans in the four SCBs but Rupali Bank increased significantly in July to September of the year.
The defaulted loans in Sonali Bank increased to Tk 12,570.21 crore as on September 30, 2013 from Tk 12,460 crore as on June, 2013, those of Janata Bank to Tk 4,787.22 crore from Tk 4,213.55 crore, and those of Agrani Bank to Tk 5,119.36 crore from Tk 4,605.53 crore.
A number of private commercial banks registered significant amount of defaulted loans in the third quarter of this year. The classified
loans in National Bank increased to Tk 2,427.62 crore as on September 30 from Tk 1,931.20 crore as on June 30 of this year, those of United Commercial Bank to Tk 946.57 crore from Tk 871.41 crore, those of Premier Bank to Tk 723.41 crore from Tk 622.98 crore, those of Prime Bank to Tk 1,097.49 crore from Tk 1,006.99 crore, and those of Bank Asia Tk 899.01 crore from Tk 762.87 crore.
Former BB deputy governor Khondker Ibrahim Khaled told New Age on Thursday that the defaulted loans in the first nine months increased due to an absence of monitoring and supervision by the banks.
The SCBs sanctioned huge amount of loans without proper scrutiny which pushed up their defaulted loans, he said.
The state-run banks perpetrated corruption in sanctioning loans in the period, he said.
He said, ‘Political unrest was one of the major causes of the increase in the defaulted loans in the third quarter. The businesspeople failed to repay their loans in due time due to sluggish business in June to September.’
Under the circumstances, the defaulted loans increased by Tk 4,410.78 crore in the third quarter, he said.
-With New Age input
