State banks better off
Four state-owned banks performed better than before by realising around 50 percent of their default loans from top 20 defaulters and pulled off 94 percent of their targets from other defaulters in 2008, according to a central bank review released yesterday.
The four state banks had the target of realising Tk194 crore from top 20 loan defaulters last year but they could realise Tk98 crore, while the banks' target from other defaulters was Tk1,039 crore but they could realise Tk980 crore.
The Bangladesh Bank (BB) not only evaluated their cash recovery, it also reviewed their achievements in operating expenses, costs of deposit, manpower rationalisation, and reducing classified loans against the target fixed for them in 2008.
BB officials said the banks succeeded in reaching the targets in some areas but failed in others.
Sonali Bank had the target of retrieving Tk100 crore from top 20 defaulters but could realise only around Tk21 crore, while its cash recovery target from other defaulters was Tk484 crore but its realisation was Tk474 crore or 98 percent of the target.
In 2008 the bank's target of reducing operating costs over 2007 was 5 percent, but instead the expenditure increased by 20 percent to Tk649 crore.
Also the cost of deposit of the bank went up from 4.80 percent in 2007 to 5.04 percent in 2008.
Classified loan decreased by percentage but increased by gross amount from Tk6,859 crore in 2007 to Tk7,217 crore in 2008. However the growth in percentage went down by 2.08 percentage points to stand at 33.28 percent last year.
The bank reduced the number of cases with Artha Rin Adalat (loan court) from 7,141 in 2007 to 5,727 in 2008, and also cut manpower by 1,994 and the total number of staff stood at 20,548 in 2008. The BB said all these were positive signs.
Janata Bank though could not achieve success in realising loans from the top 20 defaulters, it exceeded the target in retrieving loans from other defaulters. Its target of realisation from top 20 was Tk30.25 crore, but the recovery was Tk20.17 crore or 66 percent of its target.
The bank's recovery target from other defaulters was Tk181.504 crore, but the realistaion was Tk258.54 crore or 142 percent of the target. It also succeeded in lowering the costs of deposit and the number of manpower. Cost of deposit was 4.79 percent in 2007 that came down to 4.53 percent in 2008.
The bank failed to reduce its operating expenses against its target of 5 percent as the expenditure increased around 15 percent to stand at Tk461 crore in 2008.
However its number of cases with the loan court decreased but the amount against the cases increased compared to December 2007. The number of cases dropped from 5,728 in 2007 to 4,720 in 2008, but the amount went up from Tk2,725 crore to Tk2,755 crore.
Agrani Bank though succeeded in realising loans from top 20 defaulters, it failed to reach the target for other defaulters. Its recovery target from the top 20 was Tk21.78 crore but the realisation was Tk37.34 crore or 171 percent of the target. However its target from other defaulters was Tk302 crore but it recovered Tk209 crore or 69 percent of the target.
The bank could lower its cost of deposit from 3.74 percent in 2007 to 3.44 percent in 2008. It reduced manpower by 357 and its total staff stood at 2,988 in 2008. However it failed to cut operating expenses that rose by 14 percent to Tk343 crore.
Its classified loan was Tk3,178 crore or 28 percent of its outstanding loan in 2007, which came down to Tk2,548 crore or 24 percent in 2008.
The bank's number of cases with the loan court remained almost unchanged at 7,462 in 2008. But the amount against the cases increased from Tk3,166 crore in 2007 to Tk3,630 crore in 2008.
Rupali Bank failed to reach its recovery target from all the defaulters.
The bank's target from the top 20 defaulters was around Tk42 crore but the recovery was around Tk20 crore. From other defaulters its loan recovery target was Tk72 crore, whereas it retrieved around Tk38 crore in 2008.