12:00 AM, February 25, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

11 lenders' credit growth negative

11 lenders' credit growth negative

Sajjadur Rahman

Eleven banks' lending registered negative growth, reflecting depressed demand for money, according to Bangladesh Bank data.
Of these banks, three are state-owned, four are private and four are foreign commercial banks, data released on January 16 showed.
Bankers, however, said demand for money started rising slowly, riding on hopes for political calm.
“Credit demand is slowly increasing, but it will take time to pick up,” said Anis A Khan, managing director of Mutual Trust Bank.
As of January 16, 56 banks operating in the country had deposits worth Tk 620,270 crore, of which, banks lent out Tk 460,882 crore or 71.55 percent.
Overall deposit in the banking sector grew 16.46 percent in the 12 months to January this year, and credit grew 7.73 percent in the same period.
Four state banks—Sonali, Agrani, Janata and Rupali—that witnessed deposit growth of 18.48 percent year-on-year, faced an aggregate of 4.44 percent negative credit growth.
Sonali Bank's credit growth went down 7.56 percent, which was 6.16 percent and 6.75 percent for Agrani and Janata. Rupali Bank was able to post nearly 21 percent growth in its lending rate during the period.
Among the local private commercial banks, Brac Bank, ICB Islamic, Prime and Shahjalal Islami banks registered negative growth in lending in January this year compared to the same time a year ago. Three of the banks (except Prime Bank) faced negative growth in deposits.
Of the foreign banks, Citibank, HSBC, State Bank of India and Bank of Ceylon also posted negative credit growth.
Lower credit growth by the banks meant that a majority of the scheduled banks are sitting on excess funds worth around Tk 90,000 crore.
“Some of our big loans for projects like power plants, were closed in recent months,” said Syed Mahbubur Rahman, managing director of Brac Bank, explaining why his bank's credit growth went down.
Brac Bank's credit growth fell 3.65 percent as of January 16, compared to the same period a year ago.
Rahman said Brac Bank that focuses on small and medium enterprise was affected by political unrest in 2013.
“Businesses were apprehensive last year. The situation has improved and we hope demand for credit will pick-up now.”
Helal Ahmed Chowdhury, managing director of Pubali Bank, said businesses were in grave uncertainty in the second half of last year and many clients were not taking their sanctioned loans.
“Some of those clients are coming back to the banks for money now.”


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