State banks' loss-making branches shrink | The Daily Star
12:00 AM, July 15, 2018 / LAST MODIFIED: 12:00 AM, July 15, 2018

State banks' loss-making branches shrink

State-run banks saw a significant decline in the number of loss-making branches last year as Bangladesh Bank's plan to reinvigorate the institutions is at long last bearing fruit.

At the end of December last year, the total number of loss-making branches of Sonali, Janata, Agrani, Rupali and BASIC banks stood at 335, down from 474 a year earlier, according to data from the BB.

Save for Janata, all state banks have managed to reduce the number of loss-making branches last year by way of expanding their business activities, said Mohammad Shams-Ul Islam, Agrani's managing director and chief executive officer.

Earlier, branches outside of Dhaka would try to make profit through deposit collection. But last year, those were allowed to lend, which enabled them to log in profits, he said.

“This is why the state banks' loan-deposit ratio increased last year,” he added.

Sonali, Bangladesh's largest bank, cut down its loss-making branches by 52 last year to 181. Its loan-deposit ratio crept up to 35.78 percent last year from 33.22 percent a year earlier.

During the course of 2017, Agrani's loss-making branches shrunk to 43 from 78. Its loan-deposit ratio rose to 54 percent last year from 48 percent.

Rupali brought down the number of loss-making branches to 33 from 87, with its loan-deposit ratio crawling up 1.52 percent to 62 percent last year. Scam-hit BASIC Bank too cut down its loss-making branches in 2017 to 21 from 28.

Last year, the bank lent aggressively exceeding the 85 percent ceiling for loan-deposit ratio set by the BB. The ratio surged to 98.27 percent last year from 83.62 percent a year earlier.

Janata though saw its loss-making branches increase to 57 from 48. 

At the end of December last year, the total number of branches of the five banks stood at 3,695.

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