Operating profits of state banks rise

State-owned banks logged a 24 percent rise in operating profit during the first six months of the year on the back of cuts in the cost of funds.

In January-June, Sonali, Agrani, Janata and Rupali registered Tk 1,550 crore in profits, in contrast to Tk 1,250 crore a year earlier.

Individually, Janata's profits increased fourfold and Agrani's and Rupali's slightly. Sonali, the largest of the state banks, saw its profits fall about 25 percent year-on-year.

Janata logged in Tk 517 crore, in contrast to Tk 112 crore in the same period a year earlier. 

Md Abdus Salam, managing director of Janata Bank, credited the cut in the cost of funds by about one percentage point to 7.9 percent for the exponential rise in profits.

The bank has returned high-cost big deposits, which pushed down their cost of funds.

From the start of the year, Janata distributed more small loans throughout the country. The branches with more deposits and less loans have been made profitable by encouraging them to give out more loans, Salam said.

At the same time, a good number of big loans were restructured, which enhanced its income, he added.

Sonali logged in Tk 399 crore in operating profits for the period, down from Tk 533 crore a year earlier.

Pradip Kumar Dutta, MD of Sonali Bank, said the bank got around Tk 100 crore less profits from the Chittagong region.

Bangladesh Petroleum Corporation is mainly financed from Chittagong, and owing to low fuel price in the international market this year, there was no need for the state-owned organisation to borrow from Sonali.

Besides, a number of large borrowers have defaulted, according to Dutta. Rupali made Tk 137 crore profits in the first half of 2015, a slight increase from Tk 130 crore recorded a year earlier.

M Farid Uddin, MD of Rupali Bank, said he is not happy with the small increase in profits.

The bank has about Tk 11,000 crore in loans in their local offices, of which Tk 3,200 crore have been rescheduled.

However, the bank managed its funds efficiently this year, raking in about Tk 400 crore from it, which bumped up the profits slightly, the Rupali Bank MD added.

Agrani made Tk 497 crore profits during the period, up 3.11 percent year-on-year.

Meanwhile, BB from this year has started considering scam-hit BASIC as a state-owned commercial bank, and it counted a loss of Tk 169 crore in the first half. It logged in Tk 40 crore in profits a year earlier.

However, a BASIC Bank official said the previous board showed artificial profits.

There is no scope to make profits given the state of the bank's loans a year earlier, he added.