• Friday, October 24, 2014

Listed banks count higher profits

Sarwar A Chowdhury

Most listed banks saw an upward trend in net profits during January-March, as economic indicators improved on the back of a relatively stable political situation following the national polls.
Of the 30 banks in the stockmarket, the net profits of 25 banks rose in the first quarter, compared to the same period last year.
Two banks suffered a net loss, while two others posted a fall in their net profits between January and March, according to the banks' first quarterly disclosures made public recently.
Last year was a tough year for banks as business was ravaged by political unrest in the run-up to the January 5 polls. Since then, the political situation was moving towards stability.
Political calm also helped private sector credit growth, imports, remittance and exports improve in the first quarter.

Private sector credit growth at the end of March was 11.46 percent, compared to the same period last year, while overall import growth was 54.47 percent, remittance 3.58 percent and exports 4.79 percent, according to central bank data.
In addition, the central bank's move to relax the loan provisioning rules at the end of last year helped banks generate more income, a banker said.
A provision, essentially, is an expense for banks to account for future losses on loan defaults. Bangladesh Bank had asked lenders to reconsider loan rescheduling and down payments until June on a case-by-case basis for borrowers in all sectors affected by political instability.
With the BB move, banks saw a big jump in their earnings in the fourth quarter of last year and first quarter of this year compared to the previous three quarters.
“All economic indicators are moving in a positive direction,” said Muhammed Ali, managing director of United Commercial Bank.“The business community has regained confidence.”
Banking shares were unable to draw investors' attention in the past few months, as corporate declarations from the sector failed to cheer retail investors.
Banking shares declined yesterday. Concern over reducing banks' exposure in the capital market, following the central bank's pressure, pulled the banking shares down, LankaBangla Securities said in its analysis.

Published: 12:00 am Tuesday, May 20, 2014

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