Private banks book hefty net profits | The Daily Star
12:00 AM, March 14, 2017 / LAST MODIFIED: 12:05 PM, March 14, 2017

Private banks book hefty net profits

Share this with

Copy this link

Private commercial banks saw 17.2 percent growth in net profit last year -- a development that will bring cheer for stockmarket investors.

In 2016, private banks, most of which are listed on the stockmarket, counted Tk 7,806 crore in net profit -- eclipsing the overall banking sector's performance.

The overall banking sector's profit grew 4.9 percent year-on-year to Tk 8,306 crore in 2016, according to the central bank's provisional statistics.

The banks last year made operational profit of Tk 21,567 crore from which Tk 6,050 crore was deducted as tax and Tk 7,210 crore as provisioning against bad loans.

A rise in private banks' net profits is always good news for the stockmarket, said Helal Ahmed Chowdhury, former managing director of Pubali Bank and presently an independent director of Islami Bank.

“The private banks will be able to give good dividends to their shareholders this year.”

The reason for the big rise in profits of private banks is that they have taken a good number of steps to cut down their non-performing loans.

“As a result, their bad loans did not increase much and they had to keep less provisioning -- this contributed to their big net profit figures,” he added.

Since the banks were track to logging in good profits this year, the stockmarket has been bullish in recent times, said a private bank official.

“If people invest evaluating the financial condition of companies, they will not lose money. The market will also remain stable,” he added.

Another official said the financial condition of most of the banks listed on the stockmarket is good. “That's why bank shares are good investment now.”

The foreign banks though did not share the private banks' good stroke of fortune last year: their net profits dropped 7.74 percent to Tk 1,430 crore.

The 48 local banks' operational profit rose 11 percent to Tk 17,520 crore, while that of foreign banks declined 15 percent to Tk 2,455 crore.

Of the total 57 banks in the country, Islami Bank Bangladesh recorded the highest operating profit of Tk 1,546 crore last year, followed by Standard Chartered at Tk 1,386 crore and National Bank at Tk 1,085 crore.

Janata Bank logged in Tk 1,010 crore of operating profit -- the fourth highest of the year.

Six state banks altogether logged in operating profits of Tk 2,010 crore, down 37 percent year-on-year.

After accounting for provisioning and tax payment, state banks registered net loss for the year: Tk 511 crore. In 2015, their net loss was Tk 125 crore.

Two other state-owned specialised banks -- Krishi Bank and Rajshahi Krishi Unnayan Bank -- last year counted losses of Tk 418 crore in contrast to Tk 167 crore in 2015.

Stay updated on the go with The Daily Star News App. Click here to download it for your device.

Grameenphone and Robi:
Type START <space> BR and send SMS it to 2222

Banglalink:
Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Share this with

Copy this link

Top News

Top